5 Simple Tips for a Successful Lowball Offer on a Home
Buyers are often looking for a hidden gem when they are busy house hunting.
A house listed at a low price is a catch for any property investor.
And it wouldn't be the first time for interested buyers to make a lowball offer on a house, in the hopes of scoring a discount!
When making a lower offer, the homeowner can either accept it or be pulled into a negotiation, in which case, things might work out great.
However, homeowners can also be offended that the buyer disregards the suggested property value and reject the offer completely. Then what?
Here are some tips on how to lowball and negotiate like a pro to avoid any detrimental consequences:
1 - Stay aware of current market conditions
You should work with your real estate agent and discuss the current market conditions as that will help you recognise the value of a house.
If you are buying in a seller's market and there is more competition, the seller is more likely to accept your lowball offer than if the buyer has the upper hand.
A house that has been on the market for a while will have owners that are more willing to negotiate a lower price. And of course, if there are multiple offers on the house, make sure that you don't spend too much time counteroffering. They might just sell it from under your nose to other interested buyers.
2 - Be respectful of sellers
Even if you think that the property is overpriced, make sure that you are mindful of the sellers and respect their home.
They may be selling because they are desperate and they do not necessarily want to leave the memories they have created there.
If you offer a lowball offer with an appreciation of the property, they might be more willing to accept.
Have you ever contemplated adding a personal letter to your offer addressed to the sellers as to why your family (and your offer) should be the chosen one?
3 - Have your financing in order
It is natural for sellers to be concerned about offers they're looking to accept - so why not put their minds at ease by accompanying the offer with a pre-approval letter from the financial institution or bond originator? And perhaps a deposit as well?
The higher you deposit, the more serious the seller will take you. Having your finances in order also means that you have made the right decisions regarding your bank account.
4 - Eliminate any contingencies
If you are making a lowball offer, you need to keep in mind that you are offering less than they expect.
So keep the extra demands about repairs and additional treatments to yourself.
Why try to get a lowball offer accepted if you have it linked to a bunch of additional contingencies?
5 - Let your agent contact the listing agent
Let your (buying) agent contact the listing agent with your offer and let them take it from there. It is better to depersonalise the negotiations as much as possible.
Your agent can do more by talking to the listing agent and they might even get you a lower offer. Also, let them find out as much as they can about the owners like the reason for selling and whether they have turned down other offers. This will put you in a better position when making an offer.
Bottom line: if you do decide to make a lower offer than expected, bear in mind that you might potentially lose out on the house. And yes, it's those times when the market is in your favour that you might buy the house of your dreams.