How low is the least acceptable lowball offer?

[SD Realtor]

One last thing, I did not say there was no harm, I did say it was effortless…

Remember that real estate is an emotion based game. It is about as orthogonal to engineering as you can get and as my background was engineering prior to RE I was always amazed at how illogical people can get in transactions.

There are some sellers who will act AGAINST better financial judgement when they feel they have been slighted or insulted. Don’t ask me why but there are. So one of the tactics you should be aware of is to revisit rejected attempts you have made. You submit an offer, they snub you, you go back 2 months later.

However you may find that some seller may just flat out reject dealing with you due to your first lowball offer regardless of where they are at financially. Does this make sense? No it doesn’t. Have I seen it happen? Yes I have, not alot but there are some curious cases out there. I am not saying alter your strategy because if you play the odds, these are outliers BUT they are not impossibilities.

[sreeb]

[quote=kev374]What I am saying is that I believe personally with 100% certainty that prices will decline AT LEAST 10% and I think there is a good possibility of a total 20% decline, therefore a 10% below asking is a safe bet. I personally do not think prices will decline further than 20% hence even an offer at 10% below is a gamble in my opinion but i’m willing to be upside down 10% for a bit if it means I can get into a home now.

However, I will NOT get into a home at asking prices because I do not want to expose myself to a 20% decline which I think is just way to steep to recover from without waiting a very long time.[/quote]

If the market isn’t very liquid, then 20 or 30% isn’t too low to offer. If there are good comps and they do sell when priced right, you are just wasting your, and your Realtors time.

You want to make clean offers so the seller has no concerns but the price.

If you are looking at a condo where the units are pretty much equivalent, you can start sequentially making offers on all off them.

You do need to have a heart to heart with your Realtor to see if he is happy making lots of low balls. If not, find another one.

You can either get the exact house of your dreams or a really good deal on your 15th choice. You probably won’t get both.

[sreeb]

[quote=kev374]What I am saying is that I believe personally with 100% certainty that prices will decline AT LEAST 10% and I think there is a good possibility of a total 20% decline, therefore a 10% below asking is a safe bet. I personally do not think prices will decline further than 20% hence even an offer at 10% below is a gamble in my opinion but i’m willing to be upside down 10% for a bit if it means I can get into a home now.

However, I will NOT get into a home at asking prices because I do not want to expose myself to a 20% decline which I think is just way to steep to recover from without waiting a very long time.[/quote]

If the market isn’t very liquid, then 20 or 30% isn’t too low to offer. If there are good comps and they do sell when priced right, you are just wasting your, and your Realtors time.

You want to make clean offers so the seller has no concerns but the price.

If you are looking at a condo where the units are pretty much equivalent, you can start sequentially making offers on all off them.

You do need to have a heart to heart with your Realtor to see if he is happy making lots of low balls. If not, find another one.

You can either get the exact house of your dreams or a really good deal on your 15th choice. You probably won’t get both.

[sreeb]

[quote=kev374]What I am saying is that I believe personally with 100% certainty that prices will decline AT LEAST 10% and I think there is a good possibility of a total 20% decline, therefore a 10% below asking is a safe bet. I personally do not think prices will decline further than 20% hence even an offer at 10% below is a gamble in my opinion but i’m willing to be upside down 10% for a bit if it means I can get into a home now.

However, I will NOT get into a home at asking prices because I do not want to expose myself to a 20% decline which I think is just way to steep to recover from without waiting a very long time.[/quote]

If the market isn’t very liquid, then 20 or 30% isn’t too low to offer. If there are good comps and they do sell when priced right, you are just wasting your, and your Realtors time.

You want to make clean offers so the seller has no concerns but the price.

If you are looking at a condo where the units are pretty much equivalent, you can start sequentially making offers on all off them.

You do need to have a heart to heart with your Realtor to see if he is happy making lots of low balls. If not, find another one.

You can either get the exact house of your dreams or a really good deal on your 15th choice. You probably won’t get both.

[sreeb]

[quote=kev374]What I am saying is that I believe personally with 100% certainty that prices will decline AT LEAST 10% and I think there is a good possibility of a total 20% decline, therefore a 10% below asking is a safe bet. I personally do not think prices will decline further than 20% hence even an offer at 10% below is a gamble in my opinion but i’m willing to be upside down 10% for a bit if it means I can get into a home now.

However, I will NOT get into a home at asking prices because I do not want to expose myself to a 20% decline which I think is just way to steep to recover from without waiting a very long time.[/quote]

If the market isn’t very liquid, then 20 or 30% isn’t too low to offer. If there are good comps and they do sell when priced right, you are just wasting your, and your Realtors time.

You want to make clean offers so the seller has no concerns but the price.

If you are looking at a condo where the units are pretty much equivalent, you can start sequentially making offers on all off them.

You do need to have a heart to heart with your Realtor to see if he is happy making lots of low balls. If not, find another one.

You can either get the exact house of your dreams or a really good deal on your 15th choice. You probably won’t get both.

[sreeb]

[quote=kev374]What I am saying is that I believe personally with 100% certainty that prices will decline AT LEAST 10% and I think there is a good possibility of a total 20% decline, therefore a 10% below asking is a safe bet. I personally do not think prices will decline further than 20% hence even an offer at 10% below is a gamble in my opinion but i’m willing to be upside down 10% for a bit if it means I can get into a home now.

However, I will NOT get into a home at asking prices because I do not want to expose myself to a 20% decline which I think is just way to steep to recover from without waiting a very long time.[/quote]

If the market isn’t very liquid, then 20 or 30% isn’t too low to offer. If there are good comps and they do sell when priced right, you are just wasting your, and your Realtors time.

You want to make clean offers so the seller has no concerns but the price.

If you are looking at a condo where the units are pretty much equivalent, you can start sequentially making offers on all off them.

You do need to have a heart to heart with your Realtor to see if he is happy making lots of low balls. If not, find another one.

You can either get the exact house of your dreams or a really good deal on your 15th choice. You probably won’t get both.

[sdsurfer]

[quote=kev374]agreed, there is no harm in submitting an offer.

The prices right now are so varied, some people are still stuck with their bubble level prices.. even when there are identical homes selling for drastically less. Amusing.[/quote]

Well if you check the title report or ask your realtor to you might find that a lot of them are priced higher because that is the least they can sell them for. In that case they will most likely end up a short sale, but a lot of people avoid that realization. You might find it amusing, but the seller does not.

I would recommend not to go in low, “because you think prices are going down 10%” that is just going to piss alot of people off. Find a comp that justifies your price in the same area and submit it with your offer. That way the market can tell them that your offer is valid. If you cannot find a comp to justify they you are probably too low for the current market and need to wait until you have a comp or submit your offer and hope for the best.

[sdsurfer]

[quote=kev374]agreed, there is no harm in submitting an offer.

The prices right now are so varied, some people are still stuck with their bubble level prices.. even when there are identical homes selling for drastically less. Amusing.[/quote]

Well if you check the title report or ask your realtor to you might find that a lot of them are priced higher because that is the least they can sell them for. In that case they will most likely end up a short sale, but a lot of people avoid that realization. You might find it amusing, but the seller does not.

I would recommend not to go in low, “because you think prices are going down 10%” that is just going to piss alot of people off. Find a comp that justifies your price in the same area and submit it with your offer. That way the market can tell them that your offer is valid. If you cannot find a comp to justify they you are probably too low for the current market and need to wait until you have a comp or submit your offer and hope for the best.

[sdsurfer]

[quote=kev374]agreed, there is no harm in submitting an offer.

The prices right now are so varied, some people are still stuck with their bubble level prices.. even when there are identical homes selling for drastically less. Amusing.[/quote]

Well if you check the title report or ask your realtor to you might find that a lot of them are priced higher because that is the least they can sell them for. In that case they will most likely end up a short sale, but a lot of people avoid that realization. You might find it amusing, but the seller does not.

I would recommend not to go in low, “because you think prices are going down 10%” that is just going to piss alot of people off. Find a comp that justifies your price in the same area and submit it with your offer. That way the market can tell them that your offer is valid. If you cannot find a comp to justify they you are probably too low for the current market and need to wait until you have a comp or submit your offer and hope for the best.

[sdsurfer]

[quote=kev374]agreed, there is no harm in submitting an offer.

The prices right now are so varied, some people are still stuck with their bubble level prices.. even when there are identical homes selling for drastically less. Amusing.[/quote]

Well if you check the title report or ask your realtor to you might find that a lot of them are priced higher because that is the least they can sell them for. In that case they will most likely end up a short sale, but a lot of people avoid that realization. You might find it amusing, but the seller does not.

I would recommend not to go in low, “because you think prices are going down 10%” that is just going to piss alot of people off. Find a comp that justifies your price in the same area and submit it with your offer. That way the market can tell them that your offer is valid. If you cannot find a comp to justify they you are probably too low for the current market and need to wait until you have a comp or submit your offer and hope for the best.

[sdsurfer]

[quote=kev374]agreed, there is no harm in submitting an offer.

The prices right now are so varied, some people are still stuck with their bubble level prices.. even when there are identical homes selling for drastically less. Amusing.[/quote]

Well if you check the title report or ask your realtor to you might find that a lot of them are priced higher because that is the least they can sell them for. In that case they will most likely end up a short sale, but a lot of people avoid that realization. You might find it amusing, but the seller does not.

I would recommend not to go in low, “because you think prices are going down 10%” that is just going to piss alot of people off. Find a comp that justifies your price in the same area and submit it with your offer. That way the market can tell them that your offer is valid. If you cannot find a comp to justify they you are probably too low for the current market and need to wait until you have a comp or submit your offer and hope for the best.

[kev374]

I checked ZipRealty and according to them most transactions are going for 5% below asking right now. So, if a seller is really motivated to sell then 10% below asking shouldn’t be unrealistic I think…certainly not to the point of being insulting.

I have done my HW and I can see that the inventory is quite large in South OC and the DOMs for the listings seem quite high. Buyers are in a holding pattern right now which requires sellers to be more flexible in their prices. Just how the market works!

I am only talking about the South OC market, I have no clue about San Diego and other markets as I don’t monitor them 🙂

[kev374]

I checked ZipRealty and according to them most transactions are going for 5% below asking right now. So, if a seller is really motivated to sell then 10% below asking shouldn’t be unrealistic I think…certainly not to the point of being insulting.

I have done my HW and I can see that the inventory is quite large in South OC and the DOMs for the listings seem quite high. Buyers are in a holding pattern right now which requires sellers to be more flexible in their prices. Just how the market works!

I am only talking about the South OC market, I have no clue about San Diego and other markets as I don’t monitor them 🙂

[kev374]

I checked ZipRealty and according to them most transactions are going for 5% below asking right now. So, if a seller is really motivated to sell then 10% below asking shouldn’t be unrealistic I think…certainly not to the point of being insulting.

I have done my HW and I can see that the inventory is quite large in South OC and the DOMs for the listings seem quite high. Buyers are in a holding pattern right now which requires sellers to be more flexible in their prices. Just how the market works!

I am only talking about the South OC market, I have no clue about San Diego and other markets as I don’t monitor them 🙂

[kev374]

I checked ZipRealty and according to them most transactions are going for 5% below asking right now. So, if a seller is really motivated to sell then 10% below asking shouldn’t be unrealistic I think…certainly not to the point of being insulting.

I have done my HW and I can see that the inventory is quite large in South OC and the DOMs for the listings seem quite high. Buyers are in a holding pattern right now which requires sellers to be more flexible in their prices. Just how the market works!

I am only talking about the South OC market, I have no clue about San Diego and other markets as I don’t monitor them 🙂

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