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Most likely way to get lowball offer accepted?
Last Post 01 Jan 1900 12:00 AM by Anonymous. 27 Replies.
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Author Messages
minky
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07 Jan 2008 06:18 PM
    If one were to want to have a seller accept a lowball (10-15% below asking) offer - what would be the best way to approach the situation?

    We're not currently working with a realtor and the one we worked with last year wasn't a fan of making offers below asking. Too much hard work?

    So, would we be best to approach the seller's agent alone? Or try to find a good buyer's agent to approach them with?

    Does California law allow seller's agent to represent the buyer for additional commission?
    anon2
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    07 Jan 2008 07:06 PM
    I believe that is very common that the Seller/listing agent represents the buyer usually b/c many buyers don't have their own agents and yes they will make both commissions... Atleast this is what I have always assumes happens
    Kensington-renter
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    07 Jan 2008 07:58 PM
    From Ask.com:
    [quote]It is very difficult to obtain the highest and best price for the seller when the agent also represents the buyer. The dual agent cannot advise on home price nor terms nor negotiate on anyone's behalf.

    Some buyers prefer to work solely with listing agents because they know the agent is receiving both ends of the commission, that is the listing commission and the buyer's agent commission. They feel the listing agent is motivated when a buyer makes a purchase offer to get that offer accepted. They might also ask the dual agent to further negotiate the real estate commission to increase the seller's profit on a low-ball offer.[/quote]

    http://homebuying.about.com/od/real...lAgncy.htm
    Kensington-renter
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    07 Jan 2008 07:59 PM
    Sorry - About.com - not Ask. Apologies for the broken [quote] tags.
    Ron
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    08 Jan 2008 09:48 AM
    If this is the first time you are buying a home and are inexperienced, I'd get yourself a good buyer's agent and specifically state your intentions. There are many real estate agents out there, and remember that they work for you. If you don't like them, go with another one. You're the one buying,and it is your money. Your agent is there to represent you, and if he/she is too timid to negotiate on your behalf, you don't want that agent to represent you anyway. I wouldn't recommend going with the listing agent as your agent, because as the previous post said, they will be caught in the middle.

    About the lowball offer. When you make the offer, state the reasons why you think your price is fair (which it probably will be because sellers are still smoking the pipe dream when it comes to pricing their homes). Just take out your emotions out of it, stick to your guns, and be prepared to walk away. You can always give them a contingent that if they change their mind, they can contact you again if you're still interested (whose to say you can't change your price again?) There are many examples now of people whose lowball offers got rejected, and now the sellers are selling their homes for lower than the lowball offers that they received.
    Marnie
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    08 Jan 2008 10:20 AM
    I have been looking at bank-owned houses--not condos--in 92103 and 92104. Does anyone have an opinion about lowball offers to banks? How much does the weak market affect these institutions?
    buyer
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    08 Jan 2008 10:25 AM
    Ron had the best advice: keep emotions out of it, stick to your guns, and be prepared to walk away. You can also do some research on how much the owner paid, what they owe, any important dates coming up (like arm recasts), if a previous buyer couldn't perform. Tell the seller that they can sell to you now, or not sell for another year.
    Banko
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    08 Jan 2008 10:47 AM
    Bank owned properties are awesome. Banks arent insulted by offers. Its strictly numbers for them. Either they are prepared for the loss now or not. Plain and simple.
    Fair Price
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    08 Jan 2008 11:03 AM
    If the seller balks and rejects your lowball offer tell them you will be back next month with an even lower offer on their unsold property.Sellers need to wake up and slash their prices if they want to move there property the smart buyers realize what the market will bear and the longer a property languishes on the market the further the value will tumble.Shrewd buyers are now playing the waiting game knowing eventually prices will return to normal levels.
    tenfifteen
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    08 Jan 2008 02:25 PM
    I don't see 10-15% as a lowball. I'd expect 20-25% as a lowball. It seem that in a normal buy/sell market 10% would be normal, but in this buyer's market, you should start much lower.
    guest
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    08 Jan 2008 04:58 PM
    It all depends on the asking price. 20% might be Ok on some, while 0% might be Ok on others.
    Ron
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    08 Jan 2008 05:30 PM
    In addition to my previous advice, it would actually be more in your favor if you are already pre-approved and not pre-qualified. The difference is with pre-approved, you already went through most of the work, showing your financials, paystubs, credit report, etc. It pretty much means that you have the financing, and just waiting for the right house. That tells the seller that you've got financing, you're serious, and there is less probability that the escrow will fall through.

    I'm actually pre-approved, and I'm still waiting for it to come down even more. I figure I have to be comfortable holding the property for at least 10 years (through the ups and downs) eventhough realistically I'll probably move on after 5. Point is, you have to buy real estate as an investment, and as with stocks, you should be comfortable to take the heat when the market is down. If you can't ride it out when the market is bad, you shouldn't have bought the house to begin with. I'll be turning 29 this year, and hoping to buy a house this year or next year. The odd thing is, last year I was just thinking I could only afford a condo. Now I'm actually seeing houses that I'm pre-approved for. So, waiting isn't so bad.

    I say lowball as much as you want. All they can say is no. Eventually, someone will accept, and if the market tanks some more, at least you know that you were on the low end of the curve instead of the top. That's always a better deal in the long run!
    Bob
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    08 Jan 2008 05:35 PM
    About lowballing banks...they lowball you all the time so go ahead and do it! All they'll say is no. You've got nothing to lose.
    biz
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    08 Jan 2008 08:39 PM
    When trying to buy a house on a lowball offer I always think of the Ultimatum Game. Have you ever heard of it? In this game, one player divides a pot of money between himself and another. The other then chooses whether to accept the offer. If he rejects it, neither player benefits. And despite the instincts of classical economics, a stingy offer (one that is less than about a quarter of the total) is, indeeed, usually rejected. [from The Economist] So, if you want to buy a house at a lowball price you need to figure out what the smallest dollar amount the seller will accept without them feeling annoyed or insulted enough to just say forget it I'd rather go down in flames than accept your offer. Then you have to find an agent who can deliver the message well and be on board with the fact that you are ready to walk away from any deal that doesn't fit your criteria of lowball.

    panamagold
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    08 Jan 2008 09:58 PM
    Ok so last month I bought a home and this is how it worked. It origionally listed at $2.999M and I saw it then thru a buying agent. Diffenately use a buying agent, in other states that is the only way it works. I liked the house but thought its price was too high and the market is only heading down. At 90 days they lowered the price to $2.499M. Funny I was prepared to offer $2.600M before they lowered the price but their agent said he did not think they would accept that low a offer. After they lowered the price to $2.499M, I came in with an offer of $2.150M (approx 15% lower then list). They countered with $2.250M and we closed at that price. Both time and patients payed off for me and I saved $749,000 from the origional listing price. I do not think my offers were lowballs but realistic in this down market.
    Good luck to you.
    Tom
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    09 Jan 2008 03:27 PM
    Panamagold 9:58pm:
    Mucho congrats!! Was that by chance in the area of RSF? We're also looking, and at around the same price point.
    Joe
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    10 Jan 2008 09:03 AM
    sss
    Joe
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    10 Jan 2008 09:07 AM
    Sorry, that first post was a test run.

    If you use a buyers side agent to represent you, they will be getting 3%. Do you really want to pay 3% or $15k on a $500k property when you already know what you want? If you go directly to the sellers agent you can negotiate that $15k back into you pocket. We are in a down market. Anybody will be glad to get an offer. When reality sets in of how much they are upsidedown, they may be offended. But, it's their own fault and they will eventually have to deal with it. What's the alternative? To pay too much for the property?
    Hard to believe
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    10 Jan 2008 04:18 PM
    Hard to believe someone buying a 2+ million dollar home spells like that. Apparently I should have dropped out after all.
    ANON
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    10 Jan 2008 07:25 PM
    Yes that is hard to comprehend
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