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Making "low ball" or under asking offers

by sfishome on June 6, 2006

With a slower market more and more buyers are making low offers. The last few years nearly every property sold well above the Listing price. These days, Buyers are hearing that the market has slowed and often making below-asking offers within a few days of a property being put on the market. Even though virtually none of these offers are being accepted, you see buyers persist for months making offer, after offer wasting everyone’s time. Instead, that Buyer (and his or her Buyer’s Agent) ought to ask what they can do differently to get a “low-ball”, or at least a lower than Asking offer accepted.

I have several suggestions:

1. expect most of these offers never to be accepted. If you find your dream home and really want the property, make a “serious” offer that the Seller will actually consider

2. do your homework on the property’s value, and be prepared to defend your offer with the Seller and/or Listing Agent. Most Sellers find low offers insulting, so do what you can to soften the blow. Come prepared with market stats and comparable properties that sold close to your offer. If you don’t have a ryhme or reason, they’ll likely toss your offer in the circular file and not return your phone calls.

3. you should probably hold off making a low offer until the property has been on the market for at least 3 weeks. At about the 3rd week (at least in the fast moving San Francisco market) Sellers start to get anxious. If they have not received any offers, and your offer comes in $100,000 below their asking price, which might be $150,000 below what they had hoped to get, this is probably the first time during the listing period where they’d take your offer seriously.

4. be professional and be nice – don’t fax over a sloppy offer with no prior contact, no evidence that you’ve ever visited the property, and without some of the essentials that go with offers like a pre-approval letter for any loan you may be getting and a copy of your “earnest money” check. And you or your Agent ought to drop the offer off in-person in a professional looking package. Low offers are usually not taken seriously, so make it a serious looking offer at the very least.

Before writing a “low ball” offer put yourself in the shoes of the Seller and try to figure out when, how and why they might consider your offer. One last piece of advice is to call the Listing Agent and ask about the activity of the listing. Just making this connection with the Listing Agent will help any offer you might make down the road, and the information can’t hurt. I’m continuously amazed when Buyers fax over sloppy offers, like throwing a piece of bread on a hook into the ocean, and wondering why they can’t catch a fish or a house.

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