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How to Make a Lowball Offer On a House and Get it Accepted?

For sellers who have been forced to sit by while their homes languished on the market there is often no other choice but to negotiate for a lower price. This is particularly common for homeowners who have waited out the summer, typically the peak buying season and are now anxious about going into the holidays with still no sell in sight. The closer the holidays loom, the more anxious many sellers become. This can certainly be good news for buyers who are on the lookout for a good deal. If you're interested in getting a good deal by making a lowball offer there are a few tips that should be kept in mind. The most important step is to locate properties that have been on the market for awhile. The longer a homeowner has had their home on the market, the more receptive they will likely be to a lower price.

Understand your Market - Make a Comparative Analysis

One of the most common mistakes many buyers make when attempting to make a lowball offer is neglecting to have a comparative analysis performed on the property. Before you even consider making an offer on any property, it is imperative to understand the fair market value for that property. While making an aggressive offer on a property in some neighborhoods might prove to be an effective strategy; that will not always work in every market. Always understand your market before making an offer.

Working with a Right Realtor

Working with the right real estate agent is also an important element. Despite the current market, some real estate agents remain reluctant regarding aggressive offers. Buyers should understand that real estate agents work on a commission basis. When the price on a home goes down, so does their commission. Other real estate agents may be reluctant because they lack effective negotiation skills. If you notice that your real estate agent appears to be averse to the idea of making an aggressive offer, it may be time to find a new agent (Read What to look for in a real estate agent?). There is certainly no harm in making a low offer, especially on a property that has been on the market for months with few or no offers.

Back Up your Lowball Offer

With that said, if you are going to make a low offer you must be aware of the fact that coming in low can get negotiations off to the wrong start. This is why it is important to always back up a low offer with a reasonable explanation. The homeowner is always going to want to know why you're offering them such a low price on their home. This is where a comparable sales analysis can come in handy to assist you in validating an aggressively low price. Avoid being harsh when criticizing a property. Keep in mind this is still the seller's home and they likely have an emotional attachment. Instead, stick with the facts and statistics about the current market.

Decide your Walk Away Price

While it is quite likely that you will be able to negotiate a lower price on a home given the current market conditions, it is also important to recognize that most sellers do have their limits. Those limits are typically based on the amount of equity the owner has in the home. Before making an offer on a property, always know your own limits. The fact of the matter is that you and the seller may not be able to reach a common ground in terms of what you can pay and what they can accept. Research your financials and know precisely how high you are willing to pay for a property.

Make an Easy Offer

It is also important to recognize that sometimes price is not the most important factor that will compel a seller to accept an offer. In some cases, a seller will be more willing to accept even a lower offer if it is a deal that will close quickly. Toward that end, strive to ensure there are as few contingencies as possible when you make an offer. Begin by making sure you have all of your financial information in order. With increased loan restrictions, pre-qualifying for a mortgage loan is more difficult today and also takes longer. Take the time to obtain a pre-qualification letter before you even begin shopping around.

When it comes to paying cash for a home, realize that circumstances may dictate the willingness of a seller to accept a lower offer. Sellers usually want to get the most money possible for their home and may be willing to hold out longer if it means they can bring in a few thousand more. If the property is a bank owned property; however, you may have more luck in getting a lower price accepted. Buyers who need to obtain a mortgage often result in delays banks do not wish to deal with.

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