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July 21, 2008


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I think you should always lowball an offer. If you are a good salesperson, I think it's easier to negotiate in person because if they laugh in your face, you can always come back with the whole "What do you think a reasonable price would be?" approach and work back and forth a little.

It also depends on what you are looking for. If your desires in a house are fairly specific, you don't want to scare them away. I'm sure anyone would at least be reasonable enough to entertain another higher offer if they felt the offer was too low, but I guess you can't be certain.

If in doubt, I'd offer too low personally.

Anybody that gets offended by a low ball offer is a moron.

Any realator that claims that an owner will be offended when you present them with an offer is also a moron.

I hate that line....and have heard it countless times.

It's called negotiating people....why would anyone be offended by any offer.
Just counter it back or move on.

My husband and I are actively househunting... we recently (less than a week ago!) put a low offer on a short sale. We really love the house, but figured "what do we have to lose?" If they take it, AWESOME! if they don't, we'll deal (we're not so in love with the land layout). We'll see what happens..short sales seem to take anywhere from a few weeks to a few months to hear back on an we're waiting (and hoping)!! Wish us luck ;)

I am not yet ready to buy a house. But once my income increases (when I finish college and start working full time, and also as my wealth blog grows) then I will look at buying a how and will definately use this technique

Depends on the market. In today market - absolultely. In tight seller market as in late 90s early 2000s with bidding wars and properties disappearing within a week - no way.

Another consideration is the asking price and how it compares with recent comparable sales adjusted for falling (or rising) market; how desperate the seller is, how long the property was on the market. Sometimes the price is already very low, and sometimes it is way too expensive. Sometimes the owner is desperate and sometimes the owner is not sure about selling or renting out (as I was around 97, almost sold, then choose renting). Comparing to other properties, checking how long a particular property was on the market would help a lot.

Some people do get offended. So it really depends on how much you want it, how (un)reasonable the asking price is, what else is there. I do believe we are far from the bottom, so at this point even waiting is a good option. Just a humble opinion.

I received a lowball offer from potential buyer and I will admit, it was truly insulting. He came back with an increased offer, but after the blatant insult, I didn't even want to negotiate with him. In the end, I pretty much refused to sell it to him and instead sold it to another buyer at a price that was less than his increased offer and still quite fair. I understand that some people just look at the numbers on selling a house, so with that it probably wasn't the smartest move on my part, but I truly didn't want him to have my house, and I'm glad that I didn't do business with him.

When buying our house, we offered essentially what we could afford (minus a little room for negotiation), but also the comps in the neighborhood were closer to our bid then the seller's asking price. I guess they were kind of insulted and flat-out refused--wouldn't even negotiate. It sat on the market for 5 more months and they lowered their price a little, and we made a new, slightly higher offer, but this time we negotiated to essentially the middle of these. We paid a few thousand more than we wanted, but in the end it worked out well for us. They clearly weren't too happy with the whole thing and didn't want to talk with us (it's nice to be able to talk to former owners to get some advice about certain house idiosyncrasies, but I guess we survived anyways).

If you MUST have THAT house, lowballing and offending the owner is a bad idea. But if you'll settle for any one of a large number of properties, whichever you can get for cheap, then who cares if you offend 3/4 of the owners, as long as you get one to bite?

I think lowball offers are great. The wife and I made several. My take on it is it doesn't hurt to try, and since we didn't get emotionally attached to the houses it didn't really matter if the seller got offended. They either wanted to make money (counter offer) or they didn't.

I think the key is to ask whether you would be offended if the shoe was on the other foot. If someone offered you $50k less than what you thought was a reasonable price, would you want to deal with them in future?

For me, I'd be wary that they weren't really committed to the deal which is a big issue in England where nothing becomes binding for ages and ages.

With this market, I think the low ball is the only way to go. We probably have not hit the bottom and the value of any home can continue to decline. With so much inventory on the market, you should eventually find a great deal.

The difficulty most people have in implementing this is that, as with nearly any negotiating technique, you must be willing to walk away. The moment you feel like you MUST have an item, whether a particular house, a car, or whatever, you have lost all negotiating leverage.

I had a friend who was prepared to make an offer on a house and then just before they put it in, the asking price was dropped to a price lower than what they were going to offer. So you never know what the sellers are actually willing to accept.

Tom and other sellers often get too emotionally involved. If you are that attached to your house, then don't move. Otherwise, treat it as a business transaction and realize that people making lowball offers don't expect you to accept it, they just want to negotiate and give you a reality check.

In our situation, the house had started off at a very high price, and they had already dropped it about 15%. We offered about 15% below that and negotiated about halfway. (we ended up about 20% below the initial asking price)

Tom - so you took less money because your pride was hurt? Unless we're talking a hundred dollars or so, I take the higher offer no matter what, all else being equal.

most private sellers today are either unaware or unwilling to accept what their house is worth. i wouldn't even consider making a deal outside of an REO or short sale.

with crazy lending practices of the past five or seven years, house price became unaffordable, but house owners became anchored to these unaffordable, 'paper gain' prices.

so, if i were buying a house, i wouldn't even mess with 'regular' sellers. too many emotions and too little understanding of the market.

I have bought several houses over a 20 year period (and sold the same number). I can assure you that people DO get offended by lowball offers. People are very emotionally attached to "their" homes, to the point of honestly believing that theirs is somehow special. And they take lowballs as personal insults. Especially if they are older and/or have lived in the house a long time. They can easily see a younger potential buyer as "cheeky" or insulting. Is it rational? Of course not. Do they do it? You bet!

And by the way, realtors are emotional too. Try this: Go to a few open houses in cheap clothes one Sunday, then go the next week to a few others in expensive clothes. See how many follow-up calls you get each time. They "assume" that some people cannot afford the place. (P.S. They will also follow some people around the house a lot more than others - guess who they follow?)


There is something to what you're saying, but from personal experience, let me tell you dealing with banks isn't much better. I'm currently in the process of buying a short sale, and it's a LONG process.

Banks' loss mitigation departments are completely overwhelmed with the volume of short sales they have to deal with, and that coupled with layers of bureaucracy make them incapable of making decisions in any kind of sensible time frame.

REO departments are similarly inundated. They appear particularly incompetent at selling because they refuse to invest a couple thousand dollars to fix purely cosmetic issues that could probably raise the sale price of the house $10,000. In some cases, $200 for a good cleaning crew would make a huge difference. I've seen several REO properties that are TRASHED and reek of dog urine. Of course it's great for buyers who can see past it and realize it wouldn't cost that much to fix it up, but you've gotta wonder what these banks are thinking.

The other funny thing they do is take FOREVER to get back to you, then want to settle as quickly as possible. Or they worry about things that shouldn't really matter to them, like the specifics of your financing, even if your lender confidently assures them you'll have no trouble settling. It's almost like they forgot they're not the ones lending you the money.

A lot of it comes down to the fact that bank employees aren't playing with their own money. It's all just paperwork to them; meanwhile they're watching the clock. So sometimes regular sellers can be much more rational, because it's their own money on the line.

I've done several low-ball offers. Again, I wasn't attached to the house. The best is a house that we found listed on Craigslist they were going to auction for $160K. It was worth about $250-275K easily. They decided not to do the auction because of lack of interest. We made an offer at the $160K. Needless to say, there was no return counter. Then the agent contacted my agent a week later to get feedback on the house...

In response to Matt H and purchasing a REO or short sale, I have to agree it is taking much longer. Before banks wanted them off the books before the end of the month. The quicker you could close, the better your chances. The last house we purchased, we could go through our financing and close within 2-3 weeks. They came back with a counter to change the closing date and push it back an additional 3 weeks. Drives a rehabber like me insane! I'm ready to get in there and start working. This case it worked out great because I was able to have more time to pack before starting a lot of the hard work since we were moving into this house.


One theory I've heard is that the banks actually want to keep them on the books a little longer these days, because they're reluctant to write down the loss.

Matt H -

Good to know. We plan to buy around 2011 with 20% down, so hopefully everything will be somewhat more rational by then.

I think there is a fine line between trying to get a house at fair market value, and trying to squeeze desperate owners for everything they will give up. This may sound naive, but I don't want to be a predator.

It all goes back to getting as much information on the seller as you can. What is the situation? Is the owner serious about selling or just "testing" the market? Those that want to play ball will counter. Those that don't, well they get to stay in the house they are so attached to.

I've also been a seller that received a low ball offer from a buyer that couldn't afford the house. The house was priced right (as per our final sales price), but they offered 20% less. We countered. They couldn't come up with anything more, so we moved on. That is business. We sold it to a lady who gave us the run around and major headaches, but it ended up costing her an extra $5-10K in the long run because she hemmed and hawed on negotiations. It is great dealing with a desperate buyer! Again, all part of the business. I wasn't going to let my personal feelings cost me a couple thousand dollars!


There's nothing predatory about trying to get the best price you can. If the sellers are desperate, that's their problem.

Predatory would be things like bait and switch schemes or trying to exploit people for not reading the fine print carefully. Usually, it's buyers who are preyed upon, not sellers. The seller usually has more information.

If a seller bites at your offer, it's because it was the best one that came along. If that still leaves them in a bind, it's not your fault. In fact, in that situation, if it weren't for you, they'd be even worse off.

Anyone ever dealt with an heir or someone acting as power of attorney?

I have sold to someone that low balled. It pissed me off, but we recovered came to grips and sold. Now I am in the mix to buy a home and folks are either not negotiating or are offended. I do not feel bad, these folks are unrealistic and are holding on to their homes for longer periods of time.

I can wait and will strive to steal a home if I can. I would rather feel bad about getting a good deal than over paying for something that needs a lot of work due to a lazy homeowner.

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we made a lowball offer and they did not even respond. Now what??

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