How To Successfully Lowball A Homebuying Offer
Buying a home is a big investment, and for those who are always looking for a good deal or trying to get the most for their money, securing a great price on that home is a must. Once you find a home you want to buy, it's up to you to write up an offer — with your real estate agent's help if you are using one — that will fit the seller's needs. Ultimately, you want to ensure the seller agrees to sell to you and not someone else.
You may think you need to bid at or above the listing price to get a home, and in some markets that may be necessary, according to Nolo. Yet, it's also wise to know all of your options in bidding strategies and then define what the home is worth to you, personally, before making your offer. For some, bidding under list price, or lowballing the offer, could work.
Is the home overpriced?
Home value is sometimes subjective, based on what you perceive it to be worth, but remember, the home seller has their own expectations. To lowball a home and get the property, you'll have to show the property is overpriced in some way. A home is only worth what a buyer will pay for it, but that doesn't mean a seller that's emotionally attached to the home is willing (or sometimes able) to accept a much lower offer on a home.
Why do sellers overprice their homes? According to Realtor.com, there are many reasons for this, including not paying attention to changing market conditions or believing their home is the best in the neighborhood. The real estate market can change, and as it does, home prices could be much lower than what the seller recognizes. Working with a real estate agent to do a cost comparison of the market could provide more insight into its current worth, according to Investopedia.
Show the seller what its really worth
That analysis report is a good starting point when it comes to showing the seller what the home is worth, but it's sometimes necessary to dig a bit deeper, too. Realtor.com states there are a few things to look at to determine why the property is overpriced. For example, you can tell it may be valued too high if it has been on the market for a long time or there's a need for extensive repairs. You may also want to consider the location, layout, and even the current neighborhood to determine the true value.
Orchard offers some tips for offering below the list price, including aiming for 5% to 10% lower if you can show the home needs repairs or is lacking compared to the rest of the neighborhood. If the home has been on the market for more than six months, it may be possible to offer 20% or more below asking off the original list price.