Carlsbad Real Estate

Carlsbad Real Estate – 8 Hot Tips for Making Lowball Offers in a Buyers Market

Question: What strategies should I use when making a lowball offer on a home?

The current recession defines the housing market as a “buyer’s market.” Basically, that means that there are many homes for sale, and few buyers. This grants buyers the chance to make rock-bottom “lowball offers,” for properties such as Carlsbad Real Estate. Nevertheless, there is no guarantee that lowball offers will result in success. Thus, you should consider these tips before asking a home seller, “How low can you go?”

1. Find overpriced homes with extremely high DOM

In the real estate world, DOM refers to “days on market.” This is a basic supply and demand issue. If someone has had difficulty in selling his or her home, he or she is more likely to accept a lower price offer. However, if you present and bargain a lowball offer properly, you can save a ton of money in markets that range from sizzling-hot to ice-cold.

2. You have the burden of proof, so start proving!

Never simply provide a list of lower prices for comparable houses. You have the “burden of proof.” Perhaps the home in question lacks features that similarly-priced homes have—such as remodeled kitchens or bathrooms, or replacement windows. It is important to back up your claim to a lower price, with specific details.

3. Make your offer letter clean as a whistle

Make your offer letter as tight as possible:

• Include correct spelling and punctuation
• Lower or waive certain contingencies
• Respect local customs
• Include a lender preapproval letter
• Reduce inspection periods

4. Change the focus of the discussion

Address other matters besides price. That includes lengthier escrow periods, appliances within the house, and closing cost credits.

5. Determine the motivation of the seller

It is human nature to put our interests first. You can better meet the needs of the seller, by knowing his or her motivation. Perhaps the seller needs to relocate immediately, or needs capital immediately.

6. Counter any counter offer

A counter offer means that negotiations are still possible. Walking away would close the door on your chance of buying the home.

7. If your lowball offer is rejected, resubmit

Wait about a month or two, and then resubmit your offer.

8. Avoid making common mistakes

There are certain mistakes you should avoid, when making a lowball offer. First, paying in cash provides you less of an advantage than you might think. Primarily, it eliminates the need to take out a loan. However, in the end, any type of purchase will translate into cash for the buyer.

Secondly, do not walk away if the seller sends you a counter offer. If he or she does, never second guess whether the counter offer was above, below, or at–the list price. You now have the opportunity to negotiate.

Finally, never claim that you cannot afford to pay the seller’s asking price. The seller does not need to know how much you can afford—and probably does not care either. If you cannot afford to pay the asking price, that is a personal problem—not the seller’s.