Are we scared or shy to make low ball offers?

[farbet]

http://efinancedirectory.com/articles/Lowballing_Your_California_Home_Purchase_Offer.html
Lowballing Your California Home Purchase Offer
Homebuyers have a bit more power in a buyers market. Lowballing is the idea of suckering a seller into the cheapest price possible. Here is what you need to know and where you’ll have the best luck in California.

Lowballing a home offer can be considered mean, ruthless, and cutthroat. It can also be considered smart, effective, and cheap. The last ten years has seen huge home price gains. The last one year has seen a drop in those gains. As a result, some sellers may be willing to take a little less for their home than they could have got just a few years back. Many California markets such as San Diego, San Jose, and Sacramento have seen modest price drops. Here is what you need to do to take advantage.

Learn the Motive for Selling

Some sellers must urgently get rid of their home. Employment, school, financial hardship are all reasons for unloading real estate. These sellers are the easiest to lowball. They are under pressure to close a deal.

Other sellers are downsizing their lifestyle. Reasons from children moving out to approaching retirement cause a downsize. These homeowners likely have lived in their home for years and have seen huge appreciation gains. It is unlikely they will stop a deal because they aren’t getting top dollar for their home. Bring to attention the decrease in home prices the last few months.

The other type of seller is the recent homebuyer. This person purchased a home the last year or two and is reluctant to take a loss. This person is the hardest to lowball.

Be Careful Not to Insult

Many buyers attempting to lowball a bid can come off insulting and ridiculous. A home carries a lot of emotional attachment for some people. An unbelievably low offer can seem disrespectful. It can also make a seller give the cold shoulder to any negotiations.

Quick tip: Have a maximum bid price and stick to it. Anything below is a gift.

For more information visit http://www.bankrate.com or http://www.realestatejurnal.com.

Recommended Services for Users Who Read

[NotCranky]

Be Careful Not to Insult

“Many buyers attempting to lowball a bid can come off insulting and ridiculous. A home carries a lot of emotional attachment for some people. An unbelievably low offer can seem disrespectful. It can also make a seller give the cold shoulder to any negotiations.”

The offer goes to the listing agent who doesn’t have to present it if they feel it is “Frivolous” If it gets presented then it wasn’t. Nobody comes to your birthday party to tell you what schmuck you are for low-balling their property. Low-balling works best when trying to get a deal, not a house that you are attached to, but the two aren’t necessarily completely mutually exclusive.
Common sense should be the only limitation on the offer. If the owner owes more than the offer,and it is not a short sale, or if the neighborhood is “on fire” as far as sales go it isn’t likely to work. Properties with market time,especially short sales and REO’s should be easier candidates. So should fixers with lots of time on the market.I don’t know what the rest of you think an extreme low-ball is but I don’t think 20% is out of the question for something that meets some of the good candidate criteria,. Just don’t expect to get the first one and there will probably be a counter offer if any response at all(hopefully). The odds of getting the entire low-ball are not always good but it is better than paying anywhere near list and nothing is binding on the counter. 1 page non-binding letter of intent is a good way to start. Some lenders require a “in house” proceedure for offering on Reo or Shortsales so it might be better just to make verbal offers to the listing agent and tell that person to talk to the lenders rep. If they won’t it wasn’t likely to be worth going through the procedure. Its like going fishing.
Disclaimer: It is probably better to wait until the market corrects more first.

[NotCranky]

Be Careful Not to Insult

“Many buyers attempting to lowball a bid can come off insulting and ridiculous. A home carries a lot of emotional attachment for some people. An unbelievably low offer can seem disrespectful. It can also make a seller give the cold shoulder to any negotiations.”

The offer goes to the listing agent who doesn’t have to present it if they feel it is “Frivolous” If it gets presented then it wasn’t. Nobody comes to your birthday party to tell you what schmuck you are for low-balling their property. Low-balling works best when trying to get a deal, not a house that you are attached to, but the two aren’t necessarily completely mutually exclusive.
Common sense should be the only limitation on the offer. If the owner owes more than the offer,and it is not a short sale, or if the neighborhood is “on fire” as far as sales go it isn’t likely to work. Properties with market time,especially short sales and REO’s should be easier candidates. So should fixers with lots of time on the market.I don’t know what the rest of you think an extreme low-ball is but I don’t think 20% is out of the question for something that meets some of the good candidate criteria,. Just don’t expect to get the first one and there will probably be a counter offer if any response at all(hopefully). The odds of getting the entire low-ball are not always good but it is better than paying anywhere near list and nothing is binding on the counter. 1 page non-binding letter of intent is a good way to start. Some lenders require a “in house” proceedure for offering on Reo or Shortsales so it might be better just to make verbal offers to the listing agent and tell that person to talk to the lenders rep. If they won’t it wasn’t likely to be worth going through the procedure. Its like going fishing.
Disclaimer: It is probably better to wait until the market corrects more first.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Unless you desperately need a home to live in (NOW), IMO you would be an idiot to offer more for a house than you think you could sell it for next year (or next month for that matter).

IMO It’s like going to the store hungry, your not going to make the best choices for food purchases. You got to be willing to walk away if the price is not where you will be able to resell it and get you money back.

(this includes all other costs, so you will need at least a 10% – 15% cushion in most cases IMO).

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Unless you desperately need a home to live in (NOW), IMO you would be an idiot to offer more for a house than you think you could sell it for next year (or next month for that matter).

IMO It’s like going to the store hungry, your not going to make the best choices for food purchases. You got to be willing to walk away if the price is not where you will be able to resell it and get you money back.

(this includes all other costs, so you will need at least a 10% – 15% cushion in most cases IMO).

[Chris Scoreboard Johnston]

Who cares if you hurt someones feelings? When I bought my place, I offered what I felt it was worth give or take 50k. You are not going to break bread with the sellers, toughen up! My offer represented a 150k drop from the asking price, and 700k form the original asking price. The counter was only 50k above my offer, so we split the difference and the deal went down.

Do you want to make friends, or get a good deal?

[Chris Scoreboard Johnston]

Who cares if you hurt someones feelings? When I bought my place, I offered what I felt it was worth give or take 50k. You are not going to break bread with the sellers, toughen up! My offer represented a 150k drop from the asking price, and 700k form the original asking price. The counter was only 50k above my offer, so we split the difference and the deal went down.

Do you want to make friends, or get a good deal?

[Reality]

Home prices are still so far above what they should be (e.g. what someone with a normal income can afford with normal financing) that there’s no point. I’d need to offer half the asking price for it to make sense to me. Sellers can do better than that because a few idiots are still out there buying in today’s market.

Maybe in a few years.

[Reality]

Home prices are still so far above what they should be (e.g. what someone with a normal income can afford with normal financing) that there’s no point. I’d need to offer half the asking price for it to make sense to me. Sellers can do better than that because a few idiots are still out there buying in today’s market.

Maybe in a few years.

[justme]

This whole idea about “not insulting the sellers” is pure hogwash. Absolute drivel. WTF, nobody seems to care about whether sellers are insulting the buyers with their price-hyping mania and inflation-mongering greed.

Agents that advice their clients “not to insult the seller” really are saying “I think you should offer full list so that I can get my fat commission right now without doing any real work”.

If a seller wants to be insulted by whatever, I personally do not care. What makes them so holy? I’m supposed to spend 100k more so that the seller can feel good? Dream on.

[justme]

This whole idea about “not insulting the sellers” is pure hogwash. Absolute drivel. WTF, nobody seems to care about whether sellers are insulting the buyers with their price-hyping mania and inflation-mongering greed.

Agents that advice their clients “not to insult the seller” really are saying “I think you should offer full list so that I can get my fat commission right now without doing any real work”.

If a seller wants to be insulted by whatever, I personally do not care. What makes them so holy? I’m supposed to spend 100k more so that the seller can feel good? Dream on.

[Chris Scoreboard Johnston]

The take that anyone who is buying is an idiot just cracks me up. Someone who cannot even generate enough income to buy a 600k house is supposedly smarter than someone who has made millions due to their intelligence or skill in something ( inheritance aside ). There may be some exceptions to this, but in general I doubt very seriously that median income people have more intelligence than above median income folks do.

I will say this, I would rather be a millionaire and be an “idiot”, than be a genuis and be poor.

[Chris Scoreboard Johnston]

The take that anyone who is buying is an idiot just cracks me up. Someone who cannot even generate enough income to buy a 600k house is supposedly smarter than someone who has made millions due to their intelligence or skill in something ( inheritance aside ). There may be some exceptions to this, but in general I doubt very seriously that median income people have more intelligence than above median income folks do.

I will say this, I would rather be a millionaire and be an “idiot”, than be a genuis and be poor.

[BuyerWillEPB]

Be Careful Not to Insult

Many buyers attempting to lowball a bid can come off insulting and ridiculous. A home carries a lot of emotional attachment for some people. An unbelievably low offer can seem disrespectful. It can also make a seller give the cold shoulder to any negotiations.
——————————————————–

I call Bullshit on this one!

These sellers… actually the entire real estate industry, have colluded together and used fraud, deception, even outright theft to illegally boost house prices up to insane highs.

Now they must find the next greater fools in order to keep their Ponzi scheme going. They have declared war on my family to achieve this. They want to destroy my family financially so they can escape the scam market with fat profits stolen off the backs of the average young working families.

And I am supposed to be afraid of insulting the seller?!

No, it’s the exact opposite. They are already insulting me by trying to steal my money, and my entire financial future. I have no sympathy for every rat bastard seller who has their house priced above early 2003 levels.

Finally, the illegal market has caught up to these scammers. Now, there are more than enough foreclosures already on the market for me to ignore any individual sellers in the first place. So if you are insulted by my offer, then get your piece of shit house off the market. I will only be dealing with the most desperate of foreclosure homes sold by desperate banks going into bankruptcy. The number of those foreclosures will be increasing exponentially for the next several years. So once again, if the banks don’t want to accept a Jan 2003 price then get the f@ck out of the market.

Insult the sellers? Ha! This is financial warfare now.

And remember… you MUST sell all those foreclosures, but I don’t have to buy.

[BuyerWillEPB]

Be Careful Not to Insult

Many buyers attempting to lowball a bid can come off insulting and ridiculous. A home carries a lot of emotional attachment for some people. An unbelievably low offer can seem disrespectful. It can also make a seller give the cold shoulder to any negotiations.
——————————————————–

I call Bullshit on this one!

These sellers… actually the entire real estate industry, have colluded together and used fraud, deception, even outright theft to illegally boost house prices up to insane highs.

Now they must find the next greater fools in order to keep their Ponzi scheme going. They have declared war on my family to achieve this. They want to destroy my family financially so they can escape the scam market with fat profits stolen off the backs of the average young working families.

And I am supposed to be afraid of insulting the seller?!

No, it’s the exact opposite. They are already insulting me by trying to steal my money, and my entire financial future. I have no sympathy for every rat bastard seller who has their house priced above early 2003 levels.

Finally, the illegal market has caught up to these scammers. Now, there are more than enough foreclosures already on the market for me to ignore any individual sellers in the first place. So if you are insulted by my offer, then get your piece of shit house off the market. I will only be dealing with the most desperate of foreclosure homes sold by desperate banks going into bankruptcy. The number of those foreclosures will be increasing exponentially for the next several years. So once again, if the banks don’t want to accept a Jan 2003 price then get the f@ck out of the market.

Insult the sellers? Ha! This is financial warfare now.

And remember… you MUST sell all those foreclosures, but I don’t have to buy.

[Author]

Posts