Are Low-Ball Offers Advisable?
A low-ball offer is a term used to describe an offer on a house that is substantially less than the asking price. While any offer can be presented, a low-ball offer can sour a prospective sale and discourage the seller from negotiating at all. Unless the house is very overpriced, the offer will probably be rejected. You should always do your homework about comparable prices in the neighborhood before making any offer. It also pays to know something about the seller's motivation. A lower price with a speedy escrow, for example, may motivate a seller who must move, has another house under contract, or must sell quickly for other reasons.
While your low offer in a normal market might be rejected immediately, in a buyer's market a motivated seller may make a counteroffer or even accept. Full-price or above full-price offers are more likely to be accepted by the seller. There are other considerations involved:
- Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, a low offer may not be as attractive as an offer without a contingency.
- Is the offer made on the house "as is" or does the buyer want the seller to make some repairs and lower the price instead?
- Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.
If you have any questions, please contact our office. Either DeLena or a member of her team will respond fast!