In general, a lowball offer is anything 15% or more of the seller’s asking price. However, this depends on the seller’s perceptions. If a price is at the low end of what a seller hopes for, just about anything could be thought of as low.
That said, making a lowball offer isn’t the end. It’s always better to try!
Talking to a seller’s agent early on can clue you in that a lowball offer is worth making:
- The property is inherited and the seller wants to move fast to avoid upkeep costs.
- The listing price for the home is already higher than the local market will bear.
- The house is old or inspection discloses that it is need of substantial repairs.
Even if none of these situations apply, that doesn’t mean it’s time to give up. Several techniques make buying a house with a modest offer easier. Here’s how you can get it done right:
- Choose an Agent Who Knows How to Negotiate
Not everyone is a born negotiator. Even those who have the iron nerves and proactive temperament often have to spend years developing the right skills. That goes double in real estate, where both the stakes and emotions can be high. Choose an agent who has a proven record getting the best deal in challenging situations and you’ll get better results. - Don’t Neglect the Seller’s Agent
The seller isn’t the only person on the other side of the negotiating table: The seller’s agent is a key figure. He or she will decide how to frame an offer when discussing it with the seller, which can make or break your deal. If the seller’s agent is convinced that the offer meets the seller’s needs, you’ve just won an important ally. - Pay Attention to the Listing’s History
Ideally, a home should be sold within 30 days of the initial listing. For most properties, 31 to 60 days isn’t a crisis – but every day after that raises red flags. Homes that last 90 days or longer have a greatly reduced chance to sell. Tune in to the signals the listing sends you, in terms of price changes, date, and updates, to find ways to sweeten your offer. - Keep the Seller’s Motivation in Mind
Depending on the time of year and the state of the market, time or flexibility can be just as vital to a seller’s interests as a handsome payday. Explore the seller’s other needs and motivations for listing at a certain time. This can provide you negotiating leverage at no cost to you if, to give one example, you’re able to help sellers out by closing on the timeline they need. - Be Sure the Offer Really is Low
It might sound strange, but it is possible to overestimate how well the local housing market is doing. If your agent is on the ball, he or she knows what amount similar local properties have sold for recently. Market trends can quickly change what counts as a high or low offer. Regional background can give people varying perspectives on different figures, too.
Consider a lowball offer a golden opportunity: If you move forward with confidence, you might just save yourself tens of thousands of dollars when buying a house. Remember: The worst they can do is say no.
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