Tips for Winning Lowball Offers

Buyers who are lucky enough to shop for a home in a buyer's market are in the enviable position of being more likely to get a lowball offer accepted. In seller's markets, homes quickly sell and, since there is little inventory or competition, it is difficult to negotiate a lowball offer.

If you are shopping for a new home in a seller's market, your best bet for finding sellers who might be receptive to a lowball offer is to check out those sellers of overpriced homes lingering with excessive days on market. But whether the market is hot, cold or neutral, lowball offers can result in big savings to a buyer if they are presented and negotiated properly.

To get started, let's look at what NOT do when making a lowball offer:

Common Mistakes Made by Lowball Buyers

Can't Afford or Unqualified to Pay More

Don't tell the seller your price is fair because that's how much the lender has qualified you to buy. Sellers don't care what you can or cannot afford to buy. If you can't afford to buy the house, that's not the seller's problem; it's yours.

Walking Away

Some buyers get their knickers in a twist and walk away when the seller counters the offer at more than the buyer was prepared to pay. Maybe the counter was listing price. Maybe less. Doesn't matter. The point is the doors have been opened for negotiations. Only the inexperienced or truly stupid walk away.

Strategies for Winning the Lowball Offer

Find out the Seller's Motivation

If you don't know why the seller is selling, you can't meet the seller's needs. Maybe the pressing issue is financial. Maybe the seller needs to quickly move. If you know the reason behind the sale, you can structure your offer to fulfil those needs.

Write a Clean Offer

Dot I's and cross T's. Don't ask for inclusions. Shorten cooling off periods, reduce or waive some conditions and submit a lender preapproval letter. Don't give the listing agent a reason to doubt your ability to perform. Appear strong, qualified and ready to close.

Always Counter the Counter Offer

It goes without saying that the first counter is only an invitation for the buyer to offer a second counter offer. But sometimes buyers get discouraged. It's a dance to see who will win. Until they turn off the lights and close up the bar, keep dancing.

Move Attention Away From Price

There are many other considerations than price. It's smart to change tactics and focus on varying conditions to suit the seller or to exclude tangible goods such as furniture or appliances.

Give a Logical Reason Why Your Lowball Offer is Fair

Don't insult the agent by handing over a list of comparable sales but show you have done your homework. Note how each sold property compares to the subject property. Maybe the higher priced homes had remodelled kitchens. If the home you want to buy is not updated, then knock off a believable figure reflecting the remodelling work from the seller's list price.

When Your Lowball Offer is Rejected and Negotiations End

Don't pack up your toys and go home. Just wait. Sellers have reasons for rejecting offers. Maybe you made an offer on a new listing, when the seller thinks that a really great offer is just around the corner.

Let them sit out the market. After a month or two has gone by, resubmit your offer. Just cross off the date, but leave enough of it so the seller can see how long it's been since you last made an offer. Then write in the new date and resubmit.

By Elizabeth Weintraub

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