Percentages are difficult to assign as this is more art than science. Fifty percent is a definite low-ball offer and completely useless. Do you want to know where in that 1-10% range isn't low-ball? It will depend. The price of the property comes into play because a seller has more wiggle room the higher the price.
Are you insulting or offending the seller, well it just depends. Investors who make offers on ten properties to get one are secure in their business model and the seller or seller's agent knows this is a business decision and nothing personal. Typically they are taking blighted properties and improving the locality. It becomes offensive when the offer is out of line with previously settled properties in the same neighborhood, same condition. It's offensive when the buyer has no understanding of, or wish to understand, the mechanics of maintenance, improvement by a homeowner or the right to a profit by anyone.
I'm not suggesting that everyone's listing price is valid but there are aids to help you get a feel for what should be valid. If you're getting a mortgage, your lender will not be allowing wild speculation. You'll have one or even two appraisals. Your agent will have comps for list and sold prices in the area you're considering so you can see the spreads and concessions. No good buyer's agent wants his/her client to pay too much but neither does he/she want to share an ego trip. The best negotiation is when neither buyer nor seller is completely happy.
One reason a home seller hires a professional is to be the shock absorber between them and the buyer. It is our task to neutralize the emotions. We have prepared the seller to expect low-ball offers and even 'dirt-ball' offers. The seller has been preconditioned to the buyer 'fishing' expedition and the clinical approach of investors. Be aware, it is highly likely that the seller and agent have an agreed upon, automatic 'curb-kicker' in place.
An offensive, disrespectful offer often receives no response (my preference) or an unofficial 'get real' response that is $100 below list price. What the buyer does next could very well be the tree falling in the forest. The conversation was opened, and if disrespect and offensive behavior persist, this dance is over. The 'token' response was courteous recognition of the fishing expedition.
In direct response to your question, the seller is expecting and anticipating a low-ball (Not dirt-ball) offer. They actually already know what your offer will be. You should image the agent and seller exchanging the 'high five' when the scripted story unfolds.(we know where buyers are getting their decision making data) The seller understands that as a buyer you are obligated to come in low. As an agent, I want the seller to have more than one offer from which to choose. You would be well advised to recognize this structure when low-balling a new listing that you actually want to buy. You may end up watching the home disappear in the vapors of what could have been.
I hear the DC market is HOT! In a hot market, desirable homes in desirable communities do not have down trend lines. The real estate professional working with a buyer really needs to assess if their buyer is serious or not. A buyer defying reality is a waste of everyone's time. A reality may be that desirable homes are selling at 99% of list or ABOVE list price. A buyer, wanting to 'low-ball' in such a hot market is in denial.
Best of success in buying your home.,
Annette Lawrence, Broker/Associate
Reamx Realtec Group
Palm Harbor, FL
202 552 5624
Of course in practice, deals like that are incredibly rare these days. (The best time to low ball was during 2009-2010.) If you can even manage to find a decent deal that has fewer than 5 offers, then count yourself lucky to buy it at the list price. Once in a while, you might come across a deal where you can swing a 10% discount if you buy it with cash on the spot.
You really have to know the market conditions and where you stand to know when and how much to low ball. If you low ball at the wrong time and place, you'll likely just waste time with your offers and maybe provide the sellers with a good laugh. Sellers won't feel insulted when they have dozens of better offers.