(Closed) Lowballing on a house offer?

posted 6 years ago in Home
Post # 3
9056 posts
Buzzing Beekeeper
  • Wedding: June 2010

I have no idea about the specific market in your area but I grew up with real estate agent and a mortgage banker as parents, so their “deals” were common kitchen table talk.  An offer of 15% below asking isn’t usually so offensive that they’ll walk away and not entertain any further offers, especially if it puts you in line with the other comparables in the area (or significantly below if there’s nothing in the same shape/size and you can defend why, which it looks like you can).  I would say go for it, and see what they counter at.  A lot of people over price slightly because they KNOW people are going to want to negotiate. 

Post # 4
1137 posts
Bumble bee
  • Wedding: September 2010

The best thing to do is pull comparable sales for your area. Have your realtor pull sales within the last 6 months with similar square footage, beds and baths and updates needed. This will give you the best starting price and rationale for your offer. 

Chances are, the house was not appraised before going on the market and assessed tax value is often not indicative of fair market value. So I wouldn’t count on either of these when your realtor goes to present your offer.

If you try lowballing for the sake of getting the best deal without having comparable backups, it could backfire and they could become offended and either reject your bid outright or counter you with a very menial price drop (ex. countering your offer at $169,000). 

Your best shot at getting the property is coming to a final sales price that is in the best interest of both parties and that is usually around fair market value for the properties size and condition.

Post # 5
2233 posts
Buzzing bee
  • Wedding: September 2012

I would put in that offer and see what happens. I agree with the PP that while it’s low it’s not really so offensive that they will walk away. It doesn’t hurt to try!

Your realtor will give you the best advice but in the end you have to look at sold comparables to really determine what a fair price for that house should be. The tax assessment has nothing to do with the value of the property. 

I’ll be honest, I don’t enjoy presenting low-ball offers when they make no sense (like when the house is already priced below market value, there are competing offers, it’s only been on the market for a few days- yes it’s happened and yes that offer was turned away, not even signed back) but in this case there are many factors that make it ok and I wouldn’t be apologetic about it. 

ETA: It is really hard to predict how people are going to react to an offer. You never know people’s situation and if they’re wanting to sell quickly or if they don’t care if it sits on the market for a few more months. It’s your realtor’s job to feel out the situation as much as possible!

Post # 7
627 posts
Busy bee
  • Wedding: June 2012

Being an estate sale, they probably just want the place sold – hence dropping the price 6 times in 7 months. You are probably being more tha fair considerintether amount if work you have to put in it. Go for it!

Post # 8
14337 posts
Honey Beekeeper
  • Wedding: June 2011

@CanAmBride: This exactly.

Dont try to low ball just because they’ve been dropping their price and you want a better ‘deal’ than they are asking for.  The best thing to do is look at the comps.  The list of why you think its not worth what they are asking, are there recent sales in the area with homes that sold for that price that do have what is in that list?  If they’ve sold for the same, but have those items, then yes, the price should be lower, but if they also dont have any of those, it would indicate the house is priced right.

I didnt put a lowball offer on my home.  I think I offered 5% under asking. It was on the market for about a year, and had dropped about 50k.  The reason that it didnt sell though was that it was priced too high for the market, and the seller wasnt willing to budge cause he had bought for even more at the peak and had put money into updating the kitchen so he was going to have to take a big hit and probably just couldnt come to terms with it.  I did offer a little less than asking, not because it wasnt fair price, but hey, we all want the best deal and save as much as we can.

Post # 9
14498 posts
Honey Beekeeper
  • Wedding: June 2011

With all the brick being in terrible shape and really not knowing what kind of real work needs to go into the place, how much time do you have in your state to assess the offer? 

Post # 10
1750 posts
Buzzing bee

If it is worth $104,500 by the state for taxes, then thats all its “worth”! That’s what I would make my offer for.

Post # 11
231 posts
Helper bee

We were in a similar situation several months ago.. House on the market for a long time, being sold by an estate, wasn’t worth near the list price given the work that would go into fixing it.. We had a contractor come through and give us an estimate for the work that would need to have been done.. The house was listed around 150K and we offered 115K. We ended up settling at 120K.  We ultimately cancelled the contract after that because we found something else that came on the market that better suited our needs and in a better school district. BUT, the moral of my story is that it can work. Good luck!

Post # 12
1137 posts
Bumble bee
  • Wedding: September 2010

@Soladylike:I’m sorry, but this is just plain false. The state equalized taxation value has many different variables depending on your state, but it rarely is in line with the fair market sale value of a property.

In most states, there is a limit on the % you can raise the taxable value of a property from year to year. The only way the taxable assessment can make a leap to be “in line” with fair market value is if the property is sold.

For example, if the law says that your taxable value cannot go up more than 3%/year, but the fair market value of properties in that area went up by 10%/year, a person living in the house for 20 years will have a significantly lower assessed value than the actual market value of that property.


Post # 13
13099 posts
Honey Beekeeper
  • Wedding: July 2010

Seems to me like it would be worth a shot!  That offer doesn’t seem so low that it would be offensive.

I do agree with the PPs to look at comperable sales in the area.  That may (or may not) justify your offer even more.

Post # 14
6661 posts
Bee Keeper
  • Wedding: May 2010

You make good points aobut them possibly wanting to just ‘be done’ with it, but keep in mind you have no idea how many heirs there are and all of them have to agree on a sale price in order for the deal to go through. If they listed it that much above market to begin with, then they probably aren’t as desparate to sell as you think. As time goes by though with no offers, they might become wary of paying all of the maintenance and property taxes.

Once the house gets down to a reasonable market price though, expect some competition. Our apartment went through two price drops with no offers, then when it was finally listed at a ‘market’ price, three offers came in including ours. We were sitting there waiting for months for it to be listed at a reasonable price so that we wouldn’t have to fight as hard with the sellers to settle.

I think what you should do is do the math on how much money you would need for renovations, what you think the house is actually worth based on comparables and make an offer based on the net number you came up with. If the sellers counter, then you are probably in the ballpark of what they’re expecting to get. If they don’t, walk away.

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