Lowball offers

[zarrell]

So I'm in the midst of trying to purchase a home and I see lots of people out there seemingly testing the market with ridiculous prices. I came across an intriguing property however in my estimation it is a good 75-100k overpriced. Is it worth it to throw an offer that much under what the list price is? It's only been listed 12 days and had numerous viewings. I suppose the easy answer is no harm in offering whatever and see what happens, but if anyone has run into situations like this I'd be interested to hear your opinion.

[iggy_oi]

Kinda depends on the total price, there's a big difference in an offer $75k-$100k below asking price on a $1.5million home vs a $450k home

[zarrell]

Originally Posted by iggy_oi

Kinda depends on the total price, there's a big difference in an offer $75k-$100k below asking price on a $1.5million home vs a $450k home

Well obviously. 5-700k range.

[zarrell]

Numbers aside I'm just interested in seller's ,buyer's and realtors experiences with over priced property. I'd probably do the same thing in this market.

[lorenavedon]

Originally Posted by zarrell

Numbers aside I'm just interested in seller's ,buyer's and realtors experiences with over priced property. I'd probably do the same thing in this market.

just remember that in this market there are tons of places for sale that are above market value. People are listing just to see if they can get lucky and reel in a sucker. Those people don't really need to sell and aren't going anywhere or are just renting the place out and can sit on it for the next 10 years of they feel like it. Big difference between someone that's listing because they need to sell and people that list just to see if they can get lucky. That's why it's a hot market but while some places sell in a matter of hours, some places have been listed for years and are still not sold because they hugely over priced but the seller has no interest in negotiating or selling at a fair market value. TBH if I was a realtor I'd refuse to waste my time with those types of listings.

[Flamenspiel]

Hi, I would have your realtor check the comparable sales and see how much out of line the price is. 12 days may be a bit early for a low ball, your offer could trigger off a bunch of counter offers that are closer to the asking price.

I would not make a low offer unless i think it would be excepted, otherwise your just generating interest in the property.

[iggy_oi]

Originally Posted by zarrell

Well obviously. 5-700k range.

Going 10% below the list price isn't too unreasonable, but in this market I'm not sure it's gonna get you the property. Like other posters have said it could draw more interest in the property if other potential buyers are told there is an offer on the property. If they are looking at the property the list price is obviously in their price range so they likely won't hesitate to make an offer of 8% below list price to beat out your offer of 10% below.

[Calgary14]

These days it seems like any offer with a discount of 5% or higher off the purchase price seems to get rejected

[Travis Munroe]

This is quite common right now - sellers looking to catch that 1 fish in the sea at a overpriced value. I know it is frustrating for buyers as I am working with a handful that like these properties and want to put in low ball offers.
As explained above, these sellers are not desperate and it is a waste of time in doing so.
Also, if you were the seller of a 750k property that was worth 700k and you wanted to write a offer for 650k, they would be crazy to even negotiate it. As the list agent I would advise my client to reduce to 700k and see what action that drums up well before accepting in the mid 6's.

[Winsor_Pilates]

I define "low ball" as low compared to market value; not low compared to list price.
List prices can be all over the place, so if your offer seems low compared to list, but is actually where the pricing justifiably should be than it's not a "low ball" at all and you shouldn't be afraid to make it.

Chances are slim it'll work anyway, but you have no harm in trying and complete justification based on the market.

Having said that, often buyers want to low ball on good list prices and think the home is over priced when it really isn't. If they're getting a lot of interest and it's just on market, maybe it's not as overpriced as you are thinking?

[I-Hate-Hulse]

Originally Posted by zarrell

So I'm in the midst of trying to purchase a home and I see lots of people out there seemingly testing the market with ridiculous prices. I came across an intriguing property however in my estimation it is a good 75-100k overpriced. Is it worth it to throw an offer that much under what the list price is? It's only been listed 12 days and had numerous viewings. I suppose the easy answer is no harm in offering whatever and see what happens, but if anyone has run into situations like this I'd be interested to hear your opinion.

I've bought / sold several properties over the years. I'll be the outlier here and say yes do this - because I've had it work for me a few times.

Townhouse I was looking at was wayyy overpriced.... shooting for the moon. Agent on the other side was a moron and inexperienced. (as is common during a boom). Client was motiveated to sell but the agent convinced her to try and shoot for the moon for a couple weeks to see what came along.

We come along, and put in what we had researched to be a fair market value offer. Their opening ask was so stupidly high no one else had offered. Faced with this, they accepted our offer (this was just at the start of the 06 boom).

I have zero hesitation in putting a fair market value "lowball" - at the end of the day your agent works for you (and gets paid for it) and if they moan about the 20 minutes of paperwork it takes to put an offer in - find a new one pronto.

That said, I've certainly been shut down a few times too by the types mentioned here. In 2010 I ran into a lot of people asking for their 2007 peak pricing - I put in FMV bids that were declined or outright ignored. You quickly get a sense of what type of seller you're dealing with and know when to move on.

[Travis Munroe]

Originally Posted by I-Hate-Hulse

I've bought / sold several properties over the years. I'll be the outlier here and say yes do this - because I've had it work for me a few times.

Townhouse I was looking at was wayyy overpriced.... shooting for the moon. Agent on the other side was a moron and inexperienced. (as is common during a boom). Client was motiveated to sell but the agent convinced her to try and shoot for the moon for a couple weeks to see what came along.

We come along, and put in what we had researched to be a fair market value offer. Their opening ask was so stupidly high no one else had offered. Faced with this, they accepted our offer (this was just at the start of the 06 boom).

I have zero hesitation in putting a fair market value "lowball" - at the end of the day your agent works for you (and gets paid for it) and if they moan about the 20 minutes of paperwork it takes to put an offer in - find a new one pronto.

That said, I've certainly been shut down a few times too by the types mentioned here. In 2010 I ran into a lot of people asking for their 2007 peak pricing - I put in FMV bids that were declined or outright ignored. You quickly get a sense of what type of seller you're dealing with and know when to move on.

Great post

Difference between lowball and market value.
I