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Unless you can justify a lowball offer, it's just a lose/lose to everyone.
My customer just learned this lesson to the tune of $10,000 because she listened to her well meaning friends who consider themselves real estate experts, as opposed to me, someone who assists folks in buying and selling homes 24/7.
Beautiful home with a great addition, priced a bit high but not by much. On the market about 30 days. Her friends insist we start exceptionally low for that house. I suggested higher and explain how a lowball offer can jeopardize negotiations.
I present the offer. The homeowners are lovely but reasonably put off. Move forward a very sloooow week and we arrive at a price and go into attorney review; at one point we were at a stalemate over $5,000.
ANOTHER OFFER COMES IN $10,000 HIGHER, JUST AS WE WRAP UP AND GO INTO ATTORNEY REVIEW. No lowball, no nonsense. The other party wanted this house and provided excellent terms as well. Now my client has a decision to make. Come up or walk away.
She has decided to come up. BUT...HAD SHE COME IN AT A REASONABLE NUMBER TO START, SHE COULD HAVE WRAPPED HER DEAL UP MUCH LOWER.
What have your experiences been with lowball offers, either writing them or making them as a buyer? The tactic would work well undoubtedly when pursuing an investment property, as even the market for investors may be slightly smaller than your single family home buyer. If you're not living there, it's easy to walk away.
So when will a lowball offer work?
When it's obvious the home is overpriced. Your real estate agent should provide comps on recent sales going back six months. The real estate agent you're working with SHOULD BE familiar enough with the area and the inventory to make that determination also.
When the home has been on the market at least 60 days. Don't bother lowballing a home that's just been listed. The possibilities are strong in everyone's mind (and rightfully so) that someone else will offer more money. Don't just go by the days on the market listed; a real estate agent should search the MLS by ADDRESS to see if the home has been listed before or not.
When you're offering CASH. No mortgage contingencies can be a very strong motivator these days. Let the home sit a bit if days on the market haven't accumulated sufficiently, but a cash offer is hard to turn down these days.
The feedback would be interesting; please share how your "lowballs" have panned out.
"Antoinette" Scognamiglio (licensed as Maria), Sales Associate, Re/Max Superior Homes, 333 Route 46W, Suite 104, Mountain Lakes, NJ 07046. Cell Phone: 201.240.8699. Email: AntoinetteS@remax.net
Are you considering purchasing or selling a home in Morris, Sussex, Passaic or Northern Bergen County? I specialize in those territories, with expertise in Lakefront property. As a relocation specialist, I take exceptional care in assisting my clients in finding their new home and community. Certified as an Accredited Staging Professional, I work with my home seller clients to ensure their home offers the highest level of appeal to buyers (and Realtors®!). Please visit my website to learn more about my philosophy in conducting real estate business. I believe "The title of REALTOR® should be held with great care or not held at all." Put your real estate transaction in careful hands.
(C) Antoinette Scognamiglio, 2012. All Rights Reserved.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.