As to negatives to alow ball offer, there are several: (a) you might miss out on buying a house that you truly would enjoy because your offer makes you look like you're not really interested. The seller might not even bother responding to your offer, (b) you waste your time and (c) a real estate agent will start thinking you're not serious and will start acting accordingly.
You should either accept the fact that MDR real estate is expensive or start looking for a home in your financial comfort zone (even though you said you have the means).
Some owners will not consider a low offer..other's might. I have seen owners throw an offer in the trash and refuse to work with that buyer, because they felt they were insulted by the offer.
A good agent will be able to present your offer in a way that shows the offer in it's best light..and it's not all about the amount either. It has something to do with the motivation of the seller as well.
Regardless of what the media,or the situation some homeowners might be in, you can lose the chance to purchase a home you really love if you do not have the right tools to negotiate that sale.
Only with an agents help, would I approach this strategy, and would do so cautiously. The ultimate question you have to ask yourself is whether or not you are willing to walk away if they don't meet your price. Most buyers underestimate the amount of emotional attachment they have to real estate when they buy. With this in mind be honest with yourself on this point.
You need the agent for many reasons, but ultimately in these sorts of transactions there is a buffer that they provide that will be necessary to get this deal done. It is very difficult to present your own offer and to come in low. Good luck
I recently had to become transaction broker and the buyer wanted to offer at least $50k below asking. The seller was so offended by the offer they didn't even want to consider the offer from the buyer anymore because they were so upset. It really depends on the seller and how they feel about the house. You should consult with an agent to find out what the best offer price would be based on comps. It's always worth a shot to offer lower than comps, but beware you may make the seller mad as well.
This question was asked in 2008 which was a different real estate market. The current housing market is different in Marina del Rey. In 2013 mortgage interest rates are slightly above 04%, reos and short sales have diminished with standard sales majority of inventory, scarcity of active listings on the market. Currently, there is more demand than supply. Listings are seeing multiple offers. The result is that prices have increased with many properties going over asking price. In this market it is not wise to make an offer below asking price unless, the property have been on the market a long time with no price reductions. In my opinion, a long time in this market would be 30-45 days. If property has been on market along time then it is overpriced and realistic sellers have to consider lower bids.
Gail Mercedes Cole
Gail Mercedes Cole
That doesn't necessarily mean the seller won't still attempt to counter anyway... or even reject the offer out-of-hand... but at least they'll know what they're dealing with at the outset.
btw... in order to make your 93% offer as palatable as possible, try to make sure that every other aspect of the offer is as clean as possible. A closing date that the sellers like, substantial earnest money, very short mortgage commitment with a decent down-payment(or cash), short inspection period, short attorney review, (if you use attorneys in your area). There's a lot more to a good offer than just the purchase price, that makes it attractive.
A 93% purchase price, at least in our area, is not an outrageously low offer. I don't know how that holds up in Culver City.
I would definetly submit an offer on the property, you have nothing to lose. But I would encourage your agent to present the offer. It seems that most agents in my area just get an offer in and just fax it to the listing agent, which is fine but I have seen that when I have a buyer that is wanting to submit an offer below listing price I can useally get a better response from the sellers by presenting the offer to them in person. Besides I know why my buyers are submiting the offer in the first place. Hope this is helpful!
Then go for it. You have nothing to lose. To have a reasonable hope of getting the house your first offer cannot offend the seller. Unfortunately what offends a seller is different in every transaction so you will need to lean on your agent to get his/her professional impression.