We can all agree that we would love to find a good deal on a house. However, low ball offers aren’t always realistic, especially in the current real estate market.
Even though we are moving into the fall season, homes are still selling at a quick pace. Currently, we are still in a seller’s market in Louisville. It is very typical to see a home that is in good condition sell within a day and sometimes within a few hours. We anticipate seeing this trend continue on until November.
We are often asked by home buyers what is the lowest offer suggested to put in on a house. Typically, any offer that is $10,000 or more below the listing price would be classified as a low ball offer on a house.
In this market, if you choose to put in a low offer just because you want to get a good deal, you will likely not get the home. However, if there is a good reason behind putting in a low offer, you may have a chance at getting the house. In this blog, I will explain what you should do to increase the chances of your low ball offer being accepted.
Here are a few pointers for putting in a low ball offer on a home:
1.) Research Market Conditions- Since the real estate market is very hot right now, you have to take that into consideration when submitting an offer on a house. Sellers may not consider a low ball offer because homes are selling so quickly right now. We see changes in the market often. If we switch to a buyer’s market, you may have a better chance at buying a house for a lower price. Bottom line, you have to thoroughly understand your real estate market.
2.) Do Your Homework- How many days has the home been on the market? How much do houses in the neighborhood sell for? What condition is the house in? How well do houses in the neighborhood appreciate? These are all questions you need answers to before you put in an offer.
3.) Respect the Sellers- Low ball offers can offend sellers. It is best to be as respectful as possible when submitting your offer. I would recommend requesting that your REALTOR writes an email along with the offer or make a phone call to the listing agent that explains your rationale behind your offer. The homework you have done on the house will come in handy when explaining your rationale. Were you unable to find comps in the neighborhood that reflected the listing price? Did the condition and time on market justify a lower offer? Whatever the reason is, explaining yourself sometimes lessens the blow.
4.) Have Your Finances in Order- If you are going to put in a lowball offer, make sure you can present a preapproval letter right away. If your offer is low, you need to make sure that everything else looks attractive when the offer is presented. Sellers like to see that you are preapproved regardless of the price of the offer. However, it could help your case a little bit if you are submitting a lower priced offer. If you are submitting a cash offer, your proof of funds should be submitted along with the offer.
5.) Submit a Clean Offer- If you are going to put in a low offer, make sure your offer is as clean as possible. In section 25 of the sales contract, you can list 'other provisions'. Examples of other provisions would be the swing set to stay; seller to have the home professionally cleaned; seller to have a ghost inspection; closing to be 50-120 days from now; sale contingent on getting a new job; etc. If you are putting in a low offer on a house, you really don’t want to ask for much from the seller. It is best to keep your offer as simple and clean as possible.
Hopefully, this advice will leverage you to get your low offer accepted. I will reiterate that lower offers can be very hard to get accepted. This advice won’t guarantee to get your offer accepted; however, it could help your chances.
What are your thoughts on low offers on a house? Do you have any questions or comments regarding the topic? Leave your comments and questions below. As always, feel free to contact the Hollinden Team regarding the real estate market: 502-429-3866.