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After all of this discussion, what actually constitutes a lowball offer? I offered 90 percent of ask and thought I was going quite low, but I see people talking about 60 percent (40 percent off). At what point does an offer actually become a lowball? I ended up paying 95 percent of the reduced list price, but that was 90 percent of their original list. At what point does an offer become a lowball and would you treat an offer of 80% of list different than one of 60%, 75%, etc.?
There is actually no such thing as, so no possible definition of, a "lowball offer." "Lowball offer" is an emotional device for sellers who are more interested in keeping their property than doing the work to sell it.
There is actually no such thing as, so no possible definition of, a "lowball offer." "Lowball offer" is an emotional device for sellers who are more interested in keeping their property than doing the work to sell it.
So it's not an emotional device for buyers who aren't serious about buying, and are just going around kicking tires?
We offered cash 15% below asking on a house in 2008; the sellers were offended by our "lowball" offer and countered at full asking. We went to their open house the next day. Ironically, the seller, who didn't know me, complained that you needed a cash offer to sell a house in that market.
We decided the house wasn't right for us, and declined the deal.
Three days later, the stock market crashed, and the sellers offered us a 5% reduction. We declined, and bought a house a few miles away.
I ran into the seller a couple of years later; she recognized me and complained about how little they got for the house: less than what we had offered.
The lesson is, don't get offended, you might be shooting yourself in the foot.
I live in a high price COL area, and I’ve known a few people who try and try and try to get a house doing this. They feel — and yes, it’s feeling not based on facts or research — the market is too high, and it’s in a bubble that’s going to pop, or some other way to rationalize the fact they are offering 600K on million dollar properties for no other reason than they “feel” they have a right to.
And the one I knew personally that did this over and over never bought a house.
I’ve also seen the seller side of it — there was a house that the buyer adored, put a lot of money and love into and it was a historical property. He decided to sell it for a million long before the market could command it. He waited for many years before the market caught up to his price. Then he got it.
But insulted? Hey, you never know until you ask, I guess, is the attitude of the lowballer...but I have yet to see someone buy a home that way. And if someone did it to me, I’d counter at full asking. To my thinking — countering at full asking means bring me a real offer. Of course — I intend to price my house properly, not at some pie in the sky I want to get this number price.
Depends a lot on whether it is is in a depreciating area or appreciating area. An old neighbor paid 152k in 2008. I paid 22k for a better unit in 2009. North Central Phoenix.
Real world example: I have a closing this week on a high six figure property. The buyer's first offer was 45% less than asking. Seller did not want to respond. I advised treating it as if it were a reasonably-close-to asking offer and he agreed and countered with $5000 below asking. After a few back and forth counters we reached agreement at 95% of asking.
Some buyers, no matter how serious they are about buying, just can't help themselves and have to try a crazy low initial offer. In my world every offer, no matter how ridiculous, gets a response.
"You miss 100% of the shots you never take." Gretsky
Real world example: I have a closing this week on a high six figure property. The buyer's first offer was 45% less than asking. Seller did not want to respond. I advised treating it as if it were a reasonably-close-to asking offer and he agreed and countered with $5000 below asking. After a few back and forth counters we reached agreement at 95% of asking.
Some buyers, no matter how serious they are about buying, just can't help themselves and have to try a crazy low initial offer. In my world every offer, no matter how ridiculous, gets a response.
"You miss 100% of the shots you never take." Gretsky
We have a calling and duty to teach you to be immaturely miffed.
When we sold our last house, we got an offer within an hour of listing, for 15% below asking, sight unseen.
We were disappointed but not insulted, and countered at 2.5%.
The buyer toured the property, and we hit it off. He kept asking if we could go lower, and I kept saying "It's the first day." Next day, he agreed to our slightly discounted price, and we closed two weeks later.
I don't understand why people get so emotional about selling real estate. It is a NEGOTIATION.
Because they are poor negotiators.
A seasoned negotiator would have no problem with continuing the negotiation in a business-like way.
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