Are lowball offers common? Depends on how you define "lowball." Some sellers already think they're giving their homes away, so any offer below the listing price is considered "lowball" and insulting. Tough. Other sellers are motivated, and are delighted with offers of 10%, 15%, even 20% below their initial asking price.
So that brings us to: "How do I make a lowball offer without 'insulting' the seller?" As we've discussed, it's not your concern whether the seller is insulted or not. And you're not a mindreader; you don't know what will, or won't, insult the seller. So, don't worry about it. And as we've discussed, there's no uniform definition of "lowball."
Look, Sonia. You figure out how much the property is really worth. Have a Realtor run a CMA (competitive market analysis) for you. Second, how much are you prequalified for? Third, how much are you comfortable spending? You take the LOWEST of those three numbers (real value, prequalified, and comfort level). That's the most you should spend for the house.
Notice we haven't even looked at the listing price. Why not? Because it has absolutely no bearing on the property's value...on what you're prequalified for...or what your comfort level is.
Now we've got our first number: The lowest of: (1) value, (2) prequalification, and (3) comfort level. At this point, take a look at the listing price. If the listing price is lower than your first number, your offer should be at or below the listing price. If the listing price is higher than your first number, your offer should be at or below your first number.
Example: House's value is $300,000. You're prequalified to $350,000. Your comfort level is $325,000. In this case, you select the lowest number--house value of $300,000--and that's your "first number."
Then look at the listing price. If it's $325,000, but your "first number" is $300,000, then the lower of the two--$300,000--is your maximum offer. If the listing price is $290,000 and your "first number" is $300,000, then the lower of the two--$290,000--is your maximum offer. Use the listing price only if it'll lower your offer.
Remember: We're identifying the most you will spend. Your initial offer should be less. How much less? That depends on your strategy. Let's say your maximum offer number is $300,000. The listing price is $310,000. Using the "split the difference" strategy, you'd offer about $290,000. With counters and back-and-forth, you'll end up around $300,000. Useful negotiating tip: Don't use round numbers. Your offer shouldn't be $290,000. It should be $289,755...or $291,050...something like that.
Or you can do a "best and final" strategy. Your maximum number is $300,000. They're asking $310,000. You offer $298,500 and it's "best and final." It's as strong as you can make it. And it's "take it or leave it." Your agent makes clear to the listing agent that this is a one-time offer. There will be no counters. And your offer expires soon. They either take it as is, or they lose out.
Or, of course, you can actually lowball...however you define that term. The numbers above aren't lowballs. But if the house is listed at $360,000 and your maximum number is $300,000, then you have to come in fairly low--say $297,000. Maybe that's a lowball. Maybe it isn't. If they counter, you know you've got a live one.
Or maybe your maximum number is $300,000 and there's a property listed for $300,000. But you want a real bargain. Maybe your agent's informed you that there's a lot of equity in the property. Or maybe the owners are really motivated. Whatever. You offer substantially less. Maybe $250,000. Your odds of getting the offer accepted are less, but if it is accepted, you've got a nice deal.
Final time: Don't worry about insulting the seller.
If it's a standard sale, look at how long the house has been on the market. Have your agent tell you how much is currently owed on the mortage and if the house is vacant. All these are factors in you final offer.
One of your Realtor's job is to negotiate a great deal for you and how they handle the situation can help soften the blow to the seller.
However, the bottom line is it all depends on how much you want the house.
If your goal is to get the lowest possible price and not care about whether you get the house or not, then go ahead and make a low ball offer. .
However, if you do really want the house, then make a low, but still reasonalbe offer. Yes, a seller can be offended, especially if it's not handled right, and you might lose the house. Make sure you do not regret if you do lose the house.
if you will be using a lender than you should consider a reasonable offer instead and negotiate with the seller any repairs you would like to have them fix or ask them to come down on the price as is....
lowball offers may insult the seller so it's best to put yourself in their place when making an offer.
check with your lender to see if you can ask for a seller assit 3% or 6% of the sale price, this will help you to pay for closing cost.... ask any Realtor/Agent or Lender and they will explain seller assit to you...
If your research determines the asking price is way too high then don't worry about offending the seller, you are not there to make them happy. If you determine the asking price is way too low then don't worry about offering lower, you may consider offering high. In other words the asking price can be insignificant to actual "value" and a buyer determines value not a seller.