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There's a big difference between a thoughtfully prepared offer at the low end, or justifiably below, the comps and extreme lowballing just to see what happens. What happens usually is the seller doesn't consider you a serious buyer and makes an equally unrealistic counter, setting up a cumbersome negotiation that wastes a lot of people's time. Time is money, and agents soon tire of presenting go-nowhere offers from a serial lowballer. Extreme lowballing might work with desperate sellers who have equity to lose, but otherwise, not so much.
You acknowledge that it might work with desperate sellers who have equity to lose. That alone makes it a viable strategy, doesn't it?
I mean, I only need one house, so the strategy only needs to work once.
Some cultures love to negotiate. In my area, offers on $multi-million homes occasionally start at $100 and did so at the so-called market peak. All that matters is where it ends up. It's easy to flush out a whack job.
Right now however, it is more common for the buyer to have the fantasy of getting a $1million home for $275K and employ the "if you don't ask, you don't get" strategy.
It is really nothing more than "testing the waters", not too different from sellers with asking prices from la-la land.
Some agents will work with people with unrealistic expectations and some will not. People usually get the agent they deserve.
Contractor bids on a whole house renovation, including a high end kitchen and several baths. Owner is blown away by the cost and they talk.
Contractor's wife is a real estate agent who take the owner out to see some homes that are already " done". The guy buys one and gives the listing, for his current home, to the same agent. Someone comes along and low balls and the owner accepts. He is focused on where he wants to be and realized he already made up the difference on the buy side and in the end, cost him less than it would have to "do" his former home.
I would say really do your homework and investigate the comps. In both my areas-(SC and Oh) it is not unusual to be on the market at least 90 days. As a seller, we were priced according to the comps in our area and had a pending sale within 45 days -the buyers did ask for a longer closing date, however so it would show a longer amount of days on market. Our agent never changed our house to sale pending in case the contract did fall through ( which it did once already).
As the seller, we were low balled ( by 30,000) which is an enormous amount in our area. We negotiated for almost a week. The buyers ended up with ONLY 4,000 off....a waste of time negotiating. If you lowball, it could come back to bite you because you might have received a better deal if you would have been smart about the initial offer!
As a buyer, I want to be armed with the MOST recent comps and then go from there. Good luck.
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Expect a $100 Offer
