Home Sellers Make 'Reverse Offers' to Prospective Buyers

VALPARAISO, Ind., March 11, 2009— -- Homeowners Pat and Steve Christoff are eager to sell.

They originally listed their tidy tri-level home with a wooded back yard in Valparaiso, Ind., for $225,000. But, after 14 months on the market, and $40,000 in price reductions, they admit it's time to try something new.

"You have to think outside the box," said Pat Christoff, who has grown weary of waiting for a buyer. She and her husband have brought in real estate agents Jeff and Grace Safrin, who are about to try something radical.

"There are certain circumstances where we will utilize what is called a reverse offer," explained Jeff Safrin.

'It's a 50-50 Shot'

Instead of waiting for an offer, the sellers pounce -- and present prospective buyers with an offer they, it's hoped, can't refuse.

"It's like a marriage proposal," explained Grace Safrin. "In a traditional marriage proposal, the man proposes. Well, this is untraditional. The woman proposes. The seller writes a proposal to the buyers, inviting them to buy their home."

The Safrins have used this tactic six times in the past few months, making three sales as a result.

"It's a 50-50 shot," explained Jeff Safrin.

That offer usually includes a lower price, and other incentives such as appliances and closing costs.

Pat Christoff had never heard of a "reverse offer" before. "I was like, 'wait ... aren't they supposed to offer us money?'"

"It's a new approach. We'll give it a try," said her husband, Steve. "If it works, fantastic. It only takes one buyer."

'You Have To Do Something Different'

Enter the Brouwer family. The young couple has three children, and after years in a rental home, they seem ready to buy.

"It's a beautiful house," said Candace Brouwer, inspecting the living room, "and it's in a nice neighborhood. Good school districts over here."

This is the Brouwer's second look at the Christoff's home in two days, but they have yet to make an offer.

"It's a strong market out there," Candace Brouwer explained. "There's a lot of houses right in the same price range. You have to do something different if you want your house to sell."

Reverse Offers: A Risk That Can Pay Off

In the Christoff's subdivision alone, there are 11 similar homes for sale.

The Brouwers have also asked for a second showing at another house down the street. It's slightly bigger and has a pool. Candace Brouwer knows that she is the kind of buyer that hungry sellers like the Christoffs are after.

After the Brouwers leave, real estate agent Jeff Safran explains the situation to his clients.

"It's between your home and another home, and our goal today is to take advantage of a buyer who is really interested in this property."

How can he get the Brouwers off the fence? The strategy session begins at the Christoff's kitchen table. They and the Safrins come up with the reverse offer -- shaving $5,000 off their asking price of $187,000.

In addition, the Christoffs agree to pay $2,300 toward the Brouwer's closing costs, and they will also throw in the washer, drier and kitchen appliances. This reverse offer expires in two days.

The Safrins have received a lot of attention for resurrecting the reverse offer, which was last used in the '80s when interest rates soared into the double digits.

"It's a new approach," Steve Christoff said. "We'll give it a try. If it works, fantastic. It only takes one buyer."

The approach does have risks. Some real estate agents believe that having the seller act first makes them appear desperate.

Jeff Safrin disagrees. "I tell my client, we're not looking desperate. We're not going to come down $60,000 or $70,000 off a $150,000 home. We are showing them we are motivated."

Breaking the Bad News

The Safrins drive the offer over to the Brouwer's real estate agent, who then presents it to his clients. They are not impressed.

"If they're coming to me, they are obviously motivated sellers," explained Candace Brouwer. "They should be coming in a little more aggressively than that."

The Brouwers decide they will hold on to the offer as a backup, and make an offer of their own on the bigger house down the street. They got the price they wanted and decided to buy that home instead.

For the Brouwers, it was simply a better deal: more square footage, a bigger basement, a fence, a yard and even a pool, all for about $1,000 more than the Christoffs had offered.

"It's a no-brainer," the Brouwer's real estate agent Jason Moon said. "I mean, it's an absolute no-brainer."

Still, Moon admits the reverse offer did keep his clients interested.

Now, it's up to Jeff and Grace Safrin to break the bad news to the Christoffs.

When they heard about the deal the Brouwers chose instead, Pat Christoff wasn't surprised.

"I don't blame them on that one," she said. "Now we know they're not interested. So fine, we move on."

The reverse offer didn't work this time, but the Christoffs and the Safrins are determined to try again.

"If the same circumstances come up and the same opportunity comes up, we're going to write this reverse offer," Jeff Safrin said. "Because it is going to work."