It does not matter how many days a home is on the market. What is key is what you think the house is worth and what the comparable properties have recently sold for. Remember you as a buyer should be interested in the estimated market value. Sometimes homes are listed far above the estimated market value, so a low offer is nothing that should insult a reasonable seller.
An insider hint - the best buys usually do not stay on the market for many days. Target a neighborhood and watch the listings come on the market and go for what appears in your eyes to be a home you like as well as being priced very close or below market.

Tue May 13 2008, 16:00

I'd like to thank all of you who've responded to my question! I never expected such excellent and informative responses. Thank you. We put our "lowball" offer in...the house has been on the market since June 2007, btw. They've already countered (a lot higher than our offer)...to which we'll have to counter their counter. :) But at least we are now talking, right? Anyway, thanks to all of you. Keeping my fingers crossed!

Wed Feb 20 2008, 18:23

To echo what others have said here, don't worry about offending the seller. Your maximum offer (I know we're talking lowball...I'll get to that in a moment) should be the lesser of: (1) what the house is worth, as determined by comps, or (2) what you can comfortably afford to pay. That's the maximum you, or anyone, should ever pay.

So, how much below that should you go? Well, one variable is your sense of their motivation. And days on market is one measure of that. All things being equal, the longer a property is on the market, the more motivated a seller is likely to be. Not always (sometimes it's been on the market a long time because the seller is absolutely convinced it's worth top dollar), but often. Look for other signs of motivation: Is the house vacant? Have the sellers bought a new house? Are they moving due to a job relocation? Are they getting a divorce? The more motivated the sellers, the more likely they'll be to take a low offer.

Then figure out how much they paid for the house. If it's listed for $300,000 and they paid $100,000, there may be ample room for you to negotiate. On the other hand, if they paid $275,000, they may not be able to accept a lowball offer...at least not without doing a short sale.

So, what's a lowball offer? It's all in the mind of the seller (and buyer, too). Some sellers consider an offer 5% below list to be low. Generally, it's not; in many areas of the country now, houses are selling for 93%-95% of list.

Is 10% a lowball offer? In today's market, I'd say no.

20%? Maybe. But, again, keep your eye on the comps and what you can afford. If the comps show similar houses selling for 20% less, then it's still not a lowball.

30%? Maybe. Real estate investors typically make offers at 70% or less of what comps suggest. They're not successful with most of their offers, but there are enough motivated sellers who sell at 70% or less to keep a lot of real estate investors very happy.

So, using those guidelines, make an offer. One of three things will happen: (1) Your offer will be accepted (in which case you'll kick yourself because you could have offered even less, but you'll have gotten a good deal); (2) Your offer will be countered, which is good news because it means your offer is being taken seriously and you're in the ballpark; and (3) Your offer will be rejected. That's OK; just move on to the next one.

Good luck.

Wed Feb 20 2008, 18:04

It doesn't matter how many days a property has been on the market, you should make an offer for what the property is worth to you.

Obviously many people don't realize the severity of this housing market. It is not uncommon or unreasonable in this market for offers to come in at $100K+ less than listing price. Sadly, most listings are overpriced for this market, and the market has not bottomed out yet. It will not bottom out for several years, and that is a hard thing for sellers to understand and to accept.

$500K homes are now commonly selling for $100K to $200K less than listing price. Builders are offering hundreds of thousands of dollars in incentives, because they are realizing the severity of the market.

Allegedly "lowball" offers should not insult anyone. They are a product of this market, and rightfully so. A property is worth ONLY what someone is willing to pay. If a property has been on the market for months to years, then it definitely is priced too high and requires steep price reductions. The longer properties linger on the market, the more the sellers will lose.

Buyers should not feel ashamed to make offers substantially less than asking price -- tens of thousands less. Many sellers have an overinflated perception of the worth of their property, and they find it hard to come to terms with the fact that they just won't make that killing they had hoped for.

This housing market is BAD. Most listing prices are too HIGH. Offers substantially less than asking price SHOULD be considered if the seller really expects to sell the property within the next several years. Yes years. Selles should not expect a 'fly off the market' deal near listing price.

Many properties are now selling for much less than appraised tax value and/or mortgage value. That's the sad truth about this housing market. Many realtors and sellers are in denial, thinking the worst is over. Not true. Things will be much worse before they get better. So if someone want to sell now, they must slash prices now.

Wed Feb 20 2008, 17:16

Evie,
Make the offer you think is fair and see what happens. If the sellers are offended that's their issue. After 30 days on ther market most sellers start to get anxious and are ready for an offer.
Michael Doyle Realtor

Mon Feb 18 2008, 12:24

I wouldn't worry, too much, about offending the seller. Make the offer that you think is a reasonable offer, based on what you'd be willing to pay for the property.

I have often counseled sellers who were "offended" by a low offer, that they shouldn't be offended by the offer that came in low... at least the offer came in. This "low ball" buyer likes your home enough that they're willing to offer Hundreds of thousands of dollars to have it. They like your home.

The other people who came and viewed your home, not one of them liked your home well enough to even bother to write an offer. Be offended by them... open a dialog with THIS buyer, by responding to their lowball offer.. who knows... it might work?

Mon Feb 18 2008, 12:16

Evie,
I'm not from your area but I would suggest making your offer. Don't worry about insulting the Seller. The best that could happen is the Agent representing the Seller can present the offer and they will counter you or the Seller if representing themselves can say no or counter you. Remember the more days a property stays on the market--you should be doing more homework to determine why it hasn't sold. i.e., location, price, and or condition. You should have a good agent working in your corner that you like and trust. Good Luck

Mon Feb 18 2008, 11:50

Tough question, i've made lowball offers on the first day a property listed. Sometimes sellers just over-value their home. Make an offer that is appropriate to the property. Remember DON'T GET ATTACHED TO THE HOME!!! There are literally tons of properties out there right now. Especially with the market being a little slower right now, you have more control as a buyer.

Including a letter of pre-approval from your bank to let the buyer know you are serious really makes a big impact too. If you know there are potentially multiple buyers, include a cover letter to the sellers letting them know why you like the property and that you are serious about the home. This goes a LONG way to make yourself standout.

When i bought my condo i did both of these along with an offer that was $3000 lower than two other bids (as i found out later), and they chose me above the rest. I also ensured them that i could guarentee a smooth and speedy closing. I'm sure that helped.

Mon Feb 18 2008, 11:40