25950 Acero, Ste 100
Mission Viejo, CA 92691
24851 Del Prado
Dana Point, CA 92629
Coming in with a lowball offer without insulting the sellers is a fine line to walk. However it can be done, as long as you’re careful and do a little homework first. If you’re interested in snagging a bargain and are less invested in the specific property you buy, a lowball offer just might work.
How you work with a lowball offer can make all the difference between getting your dream home and being shut down by the sellers.
Respect the Sellers
First and foremost, you need to be respectful of the sellers. After all, we’re talking about their home. It’s probably where they’ve raised their family, or have built many fond memories. You don’t want to blatantly devalue the property, which will do little to win any points from them.
Even if you think the property is way overpriced, it’s still important to maintain a certain level of respect through the offer process. Make sure you follow the advice of your real estate agent very closely in order to avoid making any mistakes. A lowball offer could upset the sellers, but if you and your real estate agent present the offer with an expressed appreciation for the home, the sellers will be more likely to entertain the offer.
Keep on Top of Current Market Conditions
No offer should ever be made on a property without a thorough evaluation of the current market conditions in the area. Luckily, your real estate agent will have access to such pertinent informant. Knowing what the current market conditions are will help you recognize the value of every property you visit, which will give you a clear indication whether or not a home is priced fairly.
If it’s a seller’s market in your area with tight competition for properties, you’ll be less likely to be successful with a lowball offer. Sellers will just move on knowing that another offer will come along. On the other hand, a buyer’s market might allow you to have the upper hand in offer negotiations. Regardless, sellers with a home that’s been sitting on the market for weeks or months – in any kind of market – will be more likely to negotiate a lower offer.
Find Out the Seller’s Motivation
Perhaps the seller is letting go of the home because of financial reasons, or maybe they’re selling because they need to relocate quickly as a result of a new job. No matter what the reason, if you don’t find out what it is, you can’t realistically meet the seller’s needs.
This is where the expertise of a real estate agent comes into play. By speaking with the listing agent, your agent can find out as much as possible about why the sellers are selling, and if they’ve turned down other offers. By finding out what the motivation is behind the “For Sale” sign, you’ll have a better chance at structuring your offer more strategically to meet both parties’ needs.
Make a Clean Offer
The fewer the contingencies on the offer, the better, especially if your offer price isn’t what the sellers would have hoped. If you’re coming in with a lowball offer, don’t expect the sellers to negotiate leaving any items behind, such as window treatments. Nor should you expect them to make any minor repairs before they vacate.
In addition, your finances should be in order, and your offer should be accompanied by a mortgage pre-approval letter and a sizable deposit. The higher the deposit, down payment, and close period the more likely the sellers may be to accept your lowball offer.
Give a Solid Reason Why Your Lowball Offer is Fair
Show the sellers that you’ve done your research. Show them a few other comparable sales, and make notes on each that compare closely to the property you’re interested in buying. Perhaps the homes that sold for higher prices had completely renovated kitchens, or added bathrooms. If the property you’re putting a lowball offer on is not updated, you can realistically shave off a reasonable amount to more accurately reflect the cost of the work to get it up to par with other comparable homes in the neighborhood.
Lowball offers are not always the right choice, but under the ideal circumstances, they just might work. In most cases, you’ll need to be prepared to lose out on the home if the sellers feel that your offer is way too low. On the other hand, being respectful of the sellers while making the lowball offer in the context of your current market could lead to a fruitful purchase and great investment.