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Would you (or have you) ever lowball on a home offer?

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TravelingGal

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And what actually constitutes a lowball? 10 percent off asking? 20?

From a realtor''s perspective (for you realtors out there), is it even worth it to lowball?
 

TravelingGal

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TravelingGal

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neatfreak

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If I wasn't afraid to lose it-I sure would. Why not is my thought process on it. Especially if it's been sitting for awhile and I know the sellers need to sell it.

But I wouldn't do it just for fun. I would only do it if I really felt that it was what the home was worth and that the sellers were just WAY overpriced.
 

lyra

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It's not an option where I live.
Real estate moves too quickly and the most you can expect to get is a 3% reduction from the price if you are willing to risk it. This is assuming the house is priced competitively to begin with, which is usually the case as the realtors want quick sales, quick commissions. An overpriced house will sit there and generally means the vendor is not willing to come down in price for whatever stupid reason. Or sometimes people put their houses for sale high just to test the market, and don't even intend to accept *any* offers. Bleah. I hate the whole stressful process actually, although I would very much like to move soon.
 

Burk

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Sure would if you''re not afraid to lose the property. We just low-balled for a lot and got if for almost 20% off the asking price. My Realtor''s advice was "you never know unless you try."

Have you found a house worthy of an offer?
 

purrfectpear

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Short sales or REO in Los Angeles can take months for the banks to respond to offers, especially if they haven''t done a BPO yet (even full price offers). It sounds good in theory, but in practice it''s been a fairly lengthy process for buyers.

Nothing to lose by trying
 

phoenixgirl

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We bought our house over Christmas 2006. We offered almost 10% under asking, which had already been reduced 10% from the original listing. We settled at 6.7% under listing. But we had just decided to start looking two days earlier and had a "what the heck" attitude. If we''d known how attached we''d get to our house, I don''t know if we would have risked it.

The market was stronger back then, and we thought we got the most amazing deal. Now I think we''d expect to start low and have the seller come down a lot. I think we''d have a hard time getting what we paid for our house now, although I might be wrong. The good thing is that we didn''t pay asking; then we''d definitely be in the red.
 

TravelingGal

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Thanks ladies!

Burk, that''s right...you did get a great deal. I read in another article that 25% might be considered lowballing.

PP, we have all the time in the world, so short sale is a possibility for us. I''ve been looking for SS that are interesting, but nothing yet. If I could get in now at about 15% lower than market value, it would be OK by us as we need to buy something in about a year or so if we want to expand our family. If not, Amelia will be an only child.
 

KimberlyH

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DH and I would bid under asking, as long as it fell in line with comps and wasn''t ridiculously low. We wouldn''t offer an amount that we know would be so low it would insult the owners into not countering.
 

TravelingGal

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Date: 4/21/2009 11:28:26 PM
Author: KimberlyH
DH and I would bid under asking, as long as it fell in line with comps and wasn''t ridiculously low. We wouldn''t offer an amount that we know would be so low it would insult the owners into not countering.
That makes sense Kimberly. How''s the market in SD these days? It was falling faster than LA at first...

Here''s an interesting article about lowballing in the NY times.

http://www.nytimes.com/2008/03/16/realestate/16cov.html?ex=1363233600&en=e70b374ef54cc8d3&ei=5124&partner=permalink&exprod=permalink
 

Haven

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If you have the time and the faith that you''ll find another place if this one doesn''t work out, go for it. We did, and we got the house after some tense negotiations.
 

movie zombie

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yes, and i didn''t get the houses.....i did it more than once. then the right house came along and i went in low but not lowball [so the owner wasn''t insulted] and the owner countered ....and we had a deal. however, that was years ago and times are different now.

lowball only if you can stand to walk away from the property.

unasked for advice: don''t become attached to a property. no one property is THE ONE. they all have positives and negatives. every real estate course i''ve ever taken said the biggest mistake a buyer makes is getting attached to a property and thinking they must have that one and only that one....which of course means you end up overpaying.

i still think there is a lot to come on the market this year and you''ll do well if you take your time and look at whatever shows up on the market. you''ll get a feel for what properties are listed for and what they actually sell for before you''re ready to make your move. in this county here in california...and i assume its true for every california county....you can find out the purchase price online by accessing the county tax database. all property is increased in tax value at the time of sale at the sale price. its easy also to look up what the other properties sold for in a particular neighborhood.

good luck.

mz
 

julabean

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I''m not sure what is considered a "lowball" offer, but we just bought our house 2 weeks ago. We offered 10% less than the asking price for several reasons.

First, the market is slow. Houses aren''t moving. To get an offer these days is good news, so we knew that they''d at least look at our offer. We figured we might as well try low if they were serious about selling the house.

Second, we liked the house, but we didn''t absolutely have to have it. If they didn''t like our offer, we''d go elsewhere.

Third, we liked the house as I said, but we liked it more 35k less than the asking price!

Fourth, we offered low because we had an idea of what number we''d settle on. If they had come back and said they''d only lower their price 5k, we weren''t interested. But they came back and offered 1k over our number. So we went for it.

Ultimately, we offered 10% less and met them at 6% less.

Funny enough, they got a back up offer after we reached mutual acceptance for only 5k less than the asking price. Thankfully our first hunch (slow market, any offer is worth considering) paid off because it was too late by then.

Considering the strength the real estate market had in my area over the last several years, I didn''t really feel bad about lowballing. If anything, it was kind of nice to be in a position of power (we had just sold our condo, so it was nice to be on the other side!). If I had been completely in love with the house, obviously I would have tried harder and maybe offered more, but thankfully the the house simply grew on me over the process of our closing. I love it now, but love it for the price we got it for, not the price it was listed.
 

TravelingGal

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Thanks again ladies for your input.

MZ, yes, I''ve been on a casual hunt long enough now to know that there is no such thing as THE house. Lots of good houses come and go.

julabean, that is great! To me, 10% doesn''t seem that low around here, but to the seller, I am sure it is!

Here''s kind of an amusing article about low ball offers. It''s written from an agent/seller perspective, but still an interesting read.

http://johnfyten.com/articleslowball.html
 

makemepretty

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My mothers old farm house is for sale and she just had an offer of 50%. That was down right insulting. Plus they wanted the items in the barn. I guess people figure it doesn''t hurt to ask and they can only go up from there, but honestly, when it''s that low you don''t want to sell to them at all.
 

fisherofmengirly

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We''ve low-balled before, and they came back with a counter and we went back and forth like that for a while. As long as you don''t go TOO low, they''ll play back with you, especially in this market.

Especially in Cali, which is where I believe you are.

Good luck in the house hunt!!
 

fisherofmengirly

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Our realtor told us (and this was over a year ago now, so I would imagine it would be a little more now) that it's totally fine and should not be seen as an insult to offer 10-15 percent under asking price, as it's usually something that will be countered.

However, we did low ball on one house, (about 20-25%) because it was over priced and didn't match up with the comps in the area. At all. It was a lovely house, but we walked because it wasn't a good market value at the time and the owners didn't seem to think their home should fit into the comps in the area.

The way the market is now, though, you have WAY more options... so one house that doesn't snap your offer up isn't that big of a deal... another will come along, and they'll snap.
 

Clairitek

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When FI and I bought our house a year ago he wanted to lowball. I was horrified but he talked me into it eventually. I suppose by industry standards we didn''t technically lowball then with an initial offer of 12.5% under asking price but compared to where the listing started it was a huge drop.

Lucky for us the house had been on the market for almost 9 months and the owners were renting elsewhere. We knew they were desperate. We ended up getting them to knock 7.5% off of their final asking price (and it was an overall 22% savings from their initial listing price).

So in the end it paid off even though I was way too worried about the owners just telling us to bugger off.
 

mrssalvo

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we had our house on the market 3 different times over 3 years. We were not over-priced and even priced at the lowest price per square foot in our area. anyway, we would have been happy with ANY offer to at least be able to counter. If someone would have low balled us, i would not have been offended just countered. We had enough equity that we did have some room and eventually accepted a low end offer. we were moving and didn''t want to carry to mortgages so we took it. the buyer got a great deal b/c if we didn''t have to move would probably wouldn''t have sold it at that price. All that to say, I don''t think it hurts to offer low but like others have said, be prepared for a counter offer or to walk away.
 

KimberlyH

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Date: 4/21/2009 11:32:00 PM
Author: TravelingGal

Date: 4/21/2009 11:28:26 PM
Author: KimberlyH
DH and I would bid under asking, as long as it fell in line with comps and wasn''t ridiculously low. We wouldn''t offer an amount that we know would be so low it would insult the owners into not countering.
That makes sense Kimberly. How''s the market in SD these days? It was falling faster than LA at first...

Here''s an interesting article about lowballing in the NY times.

http://www.nytimes.com/2008/03/16/realestate/16cov.html?ex=1363233600&en=e70b374ef54cc8d3&ei=5124&partner=permalink&exprod=permalink
It''s still most definitely a buyers market but we''re seeing the very beginning of signs that things are going to turn around. Good houses in desireable neighborhoods are selling, and every agent my husband and I have talked to have said buyers are starting to come out again (he''s in real estate, not an agent, so we spend a fair amount of time looking at houses, watching the market, etc.). These houses have definitely fallen in price, but nothing like houses that are either in terrible shape or have strange layouts, are in odd locations, etc. Houses that have been damaged/destroyed (people mad over forclosure who rip out everything down to the copper piping, for example) are sitting, but that''s not suprising, who''s going to buy a house that''s been torn apart when they can go down the street and purchase another at a markedly reduced amount than they would have 2 years ago and not have to do work on it.

The struggle is the same here as it is for everyone, loans. If you don''t recieve a W2 you''re between a rock and a hard place, meaning you might have the money and ability to buy, but are unable to get funding.

We hope to sell in the next year or two, we both want a change in lifestyle, and we''ll definitely take a loss on our house, barring a miracle, but we''ll also be buying at a lower price.

This has been quite an interesting ride.
 

Tacori E-ring

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Our situation is different b/c DH only buys distressed/foreclosed/bank owned homes but he told me if he isn''t embarrassed by his first offer, it''s too high.
 

ladypirate

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When we offered on our home, we did 15% off asking price (265K vs. 310K). We ended up getting it for 9% off asking (282.5K). Assuming the inspection and everything goes well, we should be moving in at the end of May.

Now, granted, the house had been on the market for a year and a half, but it had dropped 17% off its asking price (370K) in that time anyhow. So if you look at what we got it for versus the original asking price, we got almost 25% (and 90K) off.
 

butterfly 17

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My mom did this and I guess I did as well, but the price of my house was already lowered when I made my offer.

My mom found a house that she really loved and at that time in 1992/3 they were asking $595K. She really loved the house but knew it needed a lot of work and her real estate agent asked her if she wanted to make an offer and my dad said to offer $400K .

My mom knew that was kind of low, but she didn''t want to start an argument with my dad if she offered more, so she called her re agent and told him the offer over the phone. He said to her that the offer was a bit low and they had already gotten an offer of $550K, but as her re agent he was obligated to make the offer. So she said, okay, offer them $420k. She also asked if she could make an appointment to see the house once more.

So, the re agent made the offer and she went to look at the house again.

It was snowing outside and my mom and the owner, a older man in his 70''s, went for a walk in the yard and he stumbled and almost fell and my mom helped him and as he was getting up, he said to my mom, I heard you made an offer on the house, you know we have a higher offer and my mom said something like, I know, but that''s really all I have.

And he looked at my mom and said Gloria, you want the house for $420, you got it. I am calling my son to let him know.

So, she got $175k off the asking price of the house. Now that same house is in the range of $1.8 mil.


When I bought my house in 2007 I got about 14% off the original asking price and about 8% off the lowered price.
 

absolut_blonde

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Having worked with sale data, I think it's worth a shot - large discrepancies between asking and sale price are not that uncommon.

I don't know that I would do it if I found "THE ONE" and it was absolutely not replaceable in terms of size, location, important details. But if you're talking about something that you are moderately keen on, yet has lots of available substitutes on the market, why not?

Asking prices aren't always realistic for the market... for our next house, I will probably want to lowball an offer because I know what's out there (LOTS of competition), I know the market (slow as heck right now) and I have some appraisal background so I know what's reasonable. Lots of the prices I am seeing right now are not reasonable - and consequently, those properties aren't moving.

Sometimes it takes awhile for people (realtors, sellers) to catch up with the market. Some people where I live are stuck in 2007-land it seems. You simply cannot command those prices today (here).
 

TravelingGal

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Wow, lots of input. Thanks for taking the time!

Yeah, I think 50% is a definite insult. I''m trying to figure if 25% is crazy insulting. It probably is. I think most would think in this market 10% is acceptable. There''s a home we do like, but it''s a corner house, near a railroad, and a house away (on the street behind) from a cemetery. They are asking 725 for 1600 sq feet. I think they are insane and 650 would have been a more sensible asking price (compared to comps and recent trends) with 600 being a fair price for the house and 550 being a lowball. Of course, 550 is a far stretch from 725!! No way I''d pay that price to live in the location, although the street itself and the suburb is nice.

Kimberly, I think a lot of people are thinking we''ve reached bottom. My opinion is that we have not. It''s spring, and we''re seeing activity...the true telling sign will be how the market does this autumn/winter. Then we''ll know if it was just a blip or the true beginning of recovery.

Coda, thanks for the article...interesting read!
 

KimberlyH

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TG, I would agree that fall/winter will be a good indication. I don''t think it''s going to get much worse, at least not here, but it certainly isn''t going to turn around over night, or even in 6 months or so. It took a long time to get into this mess and it will take a long time to dig out of it. The loan issue for no-docs will have to be resolved before we see major progress, and that''s going to take some time. Again, I just don''t think it''s going to get much worse than it is.
 

TravelingGal

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Date: 4/22/2009 6:58:29 PM
Author: KimberlyH
TG, I would agree that fall/winter will be a good indication. I don''t think it''s going to get much worse, at least not here, but it certainly isn''t going to turn around over night, or even in 6 months or so. It took a long time to get into this mess and it will take a long time to dig out of it. The loan issue for no-docs will have to be resolved before we see major progress, and that''s going to take some time. Again, I just don''t think it''s going to get much worse than it is.
I have no idea what the SD market is, but you may be right because SD started to take a nose dive first.

Here, I think we may be bottoming out for areas like the inland empire, but the affluent areas will still go down at least another 10 percent. Maybe more.
 

KimberlyH

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Date: 4/22/2009 7:00:18 PM
Author: TravelingGal

Date: 4/22/2009 6:58:29 PM
Author: KimberlyH
TG, I would agree that fall/winter will be a good indication. I don''t think it''s going to get much worse, at least not here, but it certainly isn''t going to turn around over night, or even in 6 months or so. It took a long time to get into this mess and it will take a long time to dig out of it. The loan issue for no-docs will have to be resolved before we see major progress, and that''s going to take some time. Again, I just don''t think it''s going to get much worse than it is.
I have no idea what the SD market is, but you may be right because SD started to take a nose dive first.

Here, I think we may be bottoming out for areas like the inland empire, but the affluent areas will still go down at least another 10 percent. Maybe more.
It''s all a guessing game at this point, and for people who are trying purchase/sell homes I hope they''re making educated guesses. It''s been a difficult time for many, to the say the least. I hope you, TGuy, and Amelia find the perfect house at the right price for you. You''ve worked so hard to get there and I think it''s admirable.
 
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