{"id":942,"date":"2015-10-15T19:30:24","date_gmt":"2015-10-15T19:30:24","guid":{"rendered":"https:\/\/www.realty.com\/blog\/?p=942"},"modified":"2018-01-20T23:11:30","modified_gmt":"2018-01-20T23:11:30","slug":"six-mistakes-to-avoid-when-lowballing-a-home-seller","status":"publish","type":"post","link":"https:\/\/www.realty.com\/blog\/consumer-guides\/six-mistakes-to-avoid-when-lowballing-a-home-seller\/","title":{"rendered":"Six Mistakes to Avoid When Lowballing a Home Seller"},"content":{"rendered":"<ul>\n<li><strong>Lowballing is Seasonal<\/strong><\/li>\n<li><strong>#1 \u2013 Lack of Knowledge<\/strong><\/li>\n<li><strong>#2 \u2013 Poor Selection of Real Estate Agent<\/strong><\/li>\n<li><strong>#3 \u2013 Failure to Provide Evidence<\/strong><\/li>\n<li><strong>#4 \u2013 Unsureness About Your Price Limit<\/strong><\/li>\n<li><strong>#5 \u2013 Obtuseness or Difficulty of Offer<\/strong><\/li>\n<li><strong>#6 \u2013 Disregard for the Supremacy of Cash<\/strong><\/li>\n<li><strong>Top Mistake when\u00a0Searching<\/strong><\/li>\n<\/ul>\n<h3><strong>Lowballing is Seasonal<\/strong><\/h3>\n<p>The Lake Tahoe community in California is heavily dependent upon skiing. In fact, the winter sport <a href=\"http:\/\/news.sfsu.edu\/ski-industry-lifts-tahoe-economy-564-million-study-finds\" target=\"_blank\" rel=\"noopener\">boosts the local economy there $564 million<\/a>, according\u00a0to Patrick Tierney, a professor at San Francisco State University.<\/p>\n<p>Just like in Lake Tahoe, different elements of the economy change with the seasons. You may know that nationwide car sales tend to follow a seasonal pattern, and that\u2019s the case with the housing market too. One of the best examples is that homebuyers are more likely to be successful with lowball offers in the fall. People often want to sell during the summer; once the fall hits and the holidays start to approach, sellers become more eager to close a deal.<\/p>\n<p>Some even decided that they will wait for the market to get hot again, pausing promotion of their house until the new year. Even those people are often willing to take a lowball offer just to get the house out of their hair.<\/p>\n<p>Going low with an offer will often prove successful when a home has failed to sell \u2013 so you will see many situations in which it works. However, it can also backfire. Here are a few mistakes to avoid.<\/p>\n<h3><strong>#1 \u2013 Lack of Knowledge<\/strong><\/h3>\n<p>You really want to have as much information as possible. Specifically, you want a market analysis comparing the property to sale prices of similar properties nearby to figure out a reasonable value.<\/p>\n<p>Obviously, the farther you are below fair market value, the less likely that your lowball effort will work.<\/p>\n<p>Also keep in mind that lowballing is <em>highly<\/em> location-specific. Anywhere that the market is skyrocketing, such as Northern Virginia or San Diego, you will have difficulty playing homebuyer limbo even in the fall.<\/p>\n<h3><strong>#2 \u2013 Poor Selection of Real Estate Agent<\/strong><\/h3>\n<p>Real estate agents will often be overly cautious about lowballing, says California real estate analyst Patrick Carlisle. Realtors who are new or otherwise desperate are more likely to move quickly toward a sale that gives them a strong commission. Some agents also just aren\u2019t very good at negotiating.<\/p>\n<p>\u201cIf it\u2019s an appealing, well-priced property that has five or six offers on it, well, going in 10% or 20% under asking isn\u2019t going to get you anywhere,\u201d <a href=\"http:\/\/www.marketwatch.com\/story\/six-lowball-offer-mistakes-buyers-often-make-2011-10-10\" target=\"_blank\" rel=\"noopener\">says\u00a0Carlisle<\/a>. \u201cBut on a property that has been overlooked by the market and doesn\u2019t have multiple bidders, it often doesn\u2019t hurt to go in low.\u201d<\/p>\n<h3><strong>#3 \u2013 Failure to Provide Evidence<\/strong><\/h3>\n<p>It\u2019s unwise to just throw a lowball at the seller without providing fair justification. You should be able to tell the seller exactly why your offer is what it is, advises Atlanta Re\/Max agent Bill Golden.<\/p>\n<p>\u201cSellers want to know why you\u2019re coming in so low,\u201d says Golden. \u201cInclude recent [nearby sale prices] or issues with the property that validate why your offer is so low.\u201d He also notes that you should be tactful and phrase everything constructively.<\/p>\n<h3><strong>#4 \u2013 Unsureness About Your Price Limit<\/strong><\/h3>\n<p>Everyone wants to get a good price on a house. Actually, the funny thing is that the primary motivation is social. According to Arizona State University real estate professor Jay Butler, no one wants to hear that they made a poor home purchase.<\/p>\n<p>Obviously a sale is essentially a compromise: sellers are only willing to go so low. Usually that low threshold is determined by the seller\u2019s level of equity.<\/p>\n<p>If you want to submit an aggressive offer, you still want to know what you are really willing to pay, notes Carlisle. \u201cAt some price point, the deal is no longer worth doing, no matter how great the property.\u201d<\/p>\n<p>You certainly want to stick to any ceilings that you set \u2013 which typically means that it\u2019s not a good idea to express absolutes within an initial offer. You can often sour a deal by stating that something is a \u201cfinal offer\u201d and then circling back around with another $5000.<\/p>\n<h3><strong>#5 \u2013 Obtuseness or Difficulty of Offer<\/strong><\/h3>\n<p>If you are really lowballing, your offer needs to otherwise be impressive to the seller. Let them know that you are ready to close immediately.<\/p>\n<p>You don\u2019t want anything blocking your ability to buy. For instance, you don\u2019t want to have to sell your current house to free up the down payment for the new property.<\/p>\n<p>Get your paperwork together too, particularly the mortgage pre-approval letter.<\/p>\n<h3><strong>#6 \u2013 Disregard for the Supremacy of Cash<\/strong><\/h3>\n<p>Don\u2019t think that offering cash will always get you a deal because it won\u2019t. Certainly, though, it doesn\u2019t hurt to let the seller know that you are an all-cash buyer. People really do want cash in hand \u2013 although that doesn\u2019t mean they will go below their minimum limit.<\/p>\n<p>Cash is especially helpful if you are buying from a bank, as with a foreclosed property. A financial institution would prefer to get cash rather than wait for a mortgage to go through.<\/p>\n<h3><strong>Top Mistake When Searching<\/strong><\/h3>\n<p>As you can see, it\u2019s easy to make missteps when you start negotiating a house deal, especially if you are truly low-balling the seller. Hopefully being aware of those common issues will help you avoid them.<\/p>\n<p>In fact, the entire process of buying a home presents opportunities for errors. For instance, when searching for a home, many buyers fail to conduct their search using the quickest way to search real estate listings online, Realty.com. <strong><a href=\"https:\/\/www.realty.com\/\" target=\"_blank\" rel=\"noopener\">Find a new home now<\/a>!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lowballing is Seasonal #1 \u2013 Lack of Knowledge #2 \u2013 Poor Selection of Real Estate Agent #3 \u2013 Failure to Provide Evidence #4 \u2013 Unsureness About Your Price Limit #5 \u2013 Obtuseness or Difficulty of Offer #6 \u2013 Disregard for the Supremacy of Cash Top Mistake when\u00a0Searching Lowballing is Seasonal The Lake Tahoe community in &hellip;<\/p>\n","protected":false},"author":5,"featured_media":1194,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,39],"tags":[53,91,56,62,117,90],"class_list":["post-942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-consumer-guides","category-expert-advice","tag-buying-a-home","tag-home","tag-home-buying","tag-home-buying-tips","tag-making-offers","tag-real-estate"],"_links":{"self":[{"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/posts\/942","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/comments?post=942"}],"version-history":[{"count":3,"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/posts\/942\/revisions"}],"predecessor-version":[{"id":1195,"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/posts\/942\/revisions\/1195"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/media\/1194"}],"wp:attachment":[{"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/media?parent=942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/categories?post=942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.realty.com\/blog\/wp-json\/wp\/v2\/tags?post=942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}