Making a lowball offer can be quite tricky. There can be many considerations that are important to ensure that your lowball offer is not completely unrealistic. Here are some factors you need to consider:
1. Market knowledge
Depending on whether it is a buyer’s market or the seller’s market, you may or may not have competition or negotiating power. Generally, in a seller’s market, homes are in demand, and you are less likely to win a lower negotiation bid. In the buyer’s market, your chances of winning a lower bid are much higher. It is necessary to account market conditions when trying to anticipate a winning bid. Have your agent do a comparative analysis to get an insight into what other homes have been sold in that area and for what price.
2. Duration of listing
It is important to consider how long has the home been listed in the market. Keep an eye out on the listings, and you may notice that a particular listing keeps appearing on your feed for a long time, chances are that the owner may get desperate to get rid of the property quickly even at a lower price. Of course, before finalizing an offer make sure to get the home inspected to rule out any damages or problems.
3. Lucrative clean offer in lieu of a low bid
If you have a reason to believe that a seller may be quite eager to sell quickly, consider making a clean offer. Although the seller most likely feels that their home is getting sold for too less of a price, removing conditions like financing clauses will help you gain mileage.
Having a pre-approved mortgage in place before you start shopping can establish a cleaner and easier transaction from many perspectives. For starters, you may already know what your financial capability is and can bid accordingly without looking for a property that is too low or too high on the price. As a seller, it will be quite easy in making a decision if your buyer has a pre-approved mortgage that establishes their buying prowess.
4. Understanding the seller
Knowing a seller’s perspective goes a long way in buying the right property. Understand the seller’s reasons for listing their home. This can help you to formulate a strategy when placing an offer. For instance, if the owner is selling the property to move to a bigger place due to a job change or addition to the family, they may be quite eager to get the property out of their way and can be lured through a clean offer rather than just a low bid.
5. Be fair
As a buyer, it is important for you to know the lower limits for a property. You may want to avoid offending the seller or the listing agent by proposing a totally unreasonable offer. Bear in mind that every seller wants a fair earning, just like every buyer wants a great deal on the home. Be professional and conscious about it and avoid wasting everyone’s time with an unrealistic offer that can’t be accepted. Always regard the market conditions, seller’s situation, home condition and the length of time the home has been on the market, along with other related aspects to come up with a reasonable and tenable price offer.
Knowing exactly what offer is tenable and what is not can be quite tricky. Real estate experts like Cherry Yeung can help you to come up with a realistic offer and give you a chance to find your dream home at a great price.