“Want to get your opinion. We want to buy a home. What’s the downside to making a low offer to see what the seller will take?”
Answer:
Great question.
But what do you call a “low offer”?
I’d call an offer within 5% of the market value an “okay offer.”
The only downside is you may lose out to another offer.
On the other hand, if you’re talking about an offer 10% or more below market value, I’d call that a “lowball offer.” There are several downsides to lowball offers:
1. The seller is going to be insulted and mad at you for wasting their time and may hold out for a higher price than they otherwise would have.
2. The seller’s agent is going to be mad at you for wasting their time and may advise the seller (perhaps correctly) that you may ask for additional concessions in escrow, assuming
3. Your agent is going to be mad at you for wasting their time and you will be their last client to find out about the best deals they find. They’re going to call their “serious” and realistic clients first.
Now, I’m not going to tell you that you’ll never get a good deal if you keep making lowball offers. But you could burn through:
– dozens of offers
– several buyer agents who get frustrated and give up on you
– dozens of properties that you could have gotten for market value, or perhaps a little better
– months of your time seeing homes and making offer after offer after offer
I’m a real estate investor myself and I don’t make lowball offers. It’s just not a productive use of my time, or yours.
So my advice is to offer within 5% of market value unless you love a home (offer more) or don’t care about a home and have inside info that the seller will take it (offer less).
Good luck.
