Today I’m talking about What is a lowball offer on house and What percentage in your market. Read this complete article.
- What is a lowball offer on a house?
- 1. Do A Comparative Market Analysis
- 2. Why is the seller selling?
- 3. What was their last mortgage amount?
- 4. Was it recently renovated?
- 5. What kind of market are we in?
- 6. How long has it been on the market?
- What percentage in your market would be a lowball offer?
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.
1. Do A Comparative Market Analysis
Number one has 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 range for that area.
2. Why is the seller selling?
Number two finds 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?.
3. 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 seller’s 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.
4. 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 a 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.
5. What kind of market are we in?
Are we in a buyers market?
- In a buyers market, you have a better chance of throwing out a lowball offer than you do in a seller’s market.
Are we in a seller’s market?
- In a seller’s market, there are not very many properties so buyers are most likely going to be in bidding wars therefore your lowball offer will not stick.
6. 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 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.