Low ball offer on a house
Today I’m talking about what is a lowball offer on house and I’m starting right now. Hi my name is Kerri Jonikas I’m a realtor in Chicago southwest suburbs.
So what is a lowball offer on a house? A lowball offer on a house is essentially offering way too low in the realm of insulting the seller. That is definitely something you do not want to do when you are trying to get a house is to insult the owner. There are six things that you need to consider when you are trying to determine what your offer price should be and we’re also going to talk about what the percentage is that would be too low for an offer price. This is where you need to enlist the help of your Realtor so they can do some research to be able to properly inform you what a good offer would be on the property.
Number one have the Realtor do a comparative market analysis obviously that should be your first step is to see what other homes in the area
have sold for in the last three to six months to get an accurate price rang for that area.
Number two find out why is the seller selling. You may not be able to find that information out but you may. So have your Realtor do a little bit of research and see if they can find out why the seller is selling, why do they want to move, what is their motivation?
Number three what was their last mortgage amount? If their last mortgage amount was close to their asking price most likely if the comps are within range of their asking price they are not going to accept the lowball offer. Clearly they’re not going to because they would lose money. We were able to determine from our previous step what the sellers motivation was if they really truly need to get out right away they may take a hit on the price but most often you are going to find that sellers are not going to take a hit on their mortgage.
Number four was it recently renovated? If it was recently renovated and it falls in line with the comps most likely the seller is not going to accept a lowball offer on it because the properties that are move in ready usually are going to sell for list or above list price because
they’re ready to go and that’s what buyers want. They want properties that are move in ready.
Number five what kind of market are we in ? Are we in a buyers market? Are we in a seller’s market? In a buyers market you have a better chance of throwing out a lowball offer than you do in a seller’s market. In a seller’s market there’s not very many properties
so buyers are most likely going to be in bidding wars therefore your lowball offer will not stick.
Number six how long has it been on the market? Has the property been on the market for only two days? Well then a lowball offer probably
isn’t going to go anywhere. If it’s been on the market for 365 days well maybe they would accept a lowball offer. Again you’d have to go through the first five steps and take a look and see whether it is worth your time to put in a lowball offer. We don’t want to get you excited and waste your time and energy on putting in a lowball offer when it’s not going to stick. Make your contract appear very strong even though it is a lowball offer. So having all of the information will help you to make an informed decision whether you should do a lowball offer or not.
What percentage in your market would be a lowball offer? In my local market ten percent under a $250,000 house would be considered a low offer. Anything above that Say 12-15% plus would be very insulting to the seller and you don’t want to do that because that’s not going to get you the house.