According to urbandigs.com in the big apple there is indeed a right time and a right way. This is an interesting concept. Done correctly, the low-ball offer can save you thousands. Done wrong, it can identify you as a bottom fisher that nobody takes seriously (or even likes, for that matter.)
Urbandigs.com postulates that the best time for a low-ball offer is:
1. After the price has been dropped at least three times
2. After the price has been dropped at least twice in four weeks.
3. The seller has owned the property at least 5+ years.
4. Imperfections in the property are cosmetic, not permanent.
After making these points, urbandigs goes on to explain the whys and wherefores of making such an offer in some detail. While this is primarily targeted at an urban setting, the points are well taken and apply basically anywhere. This is an instructional piece that has some real meat. Don’t miss this one.
Allan,
I agree with the 4 points you mention for a situation that is ripe for a lowball offer. I’d like to add 1 more, and I think it’s a clincher. And that’s a vacant home.
If the sellers have moved on, and are paying the mortgage, insurance, taxes, the gardner and snowplow guy, etc, they are likely to be very motivated. I’ve been there, done that, and it is a situation that SCREAMS for closure.
Feb 2008
In this sluggish housing market, it’s not uncommon for sellers to receive offers $100K less than listing price especially if the property is vacant, has been reduced several times, has been on the market for many months. Some sellers, however, simply refuse to accept the fact that in order to sell the price will have to be reduced. They have an overinflated perception of the worth of their property. The longer the property sits on the market, the lower the offers.
The housing market has not bottomed out yet, and it will not do so for several years. Some realtors mislead sellers into thinking that if they sit on their egg for a while they will get their overinflated price. That will be true only if the seller can sit on that egg for several years. When the market does eventually turn around, the recover will be very, very slow.
This housing market has evolved into a very different market than a few years ago. We’re seeing more properties sitting on the market for years, simply because the sellers are listening to uninformed realtors who give the seller false hopes of selling at inflated prices.
Many homes are now selling below tax appraisal value and/or below mortgage value. Properties simply are worth tens to hundreds of thousands of dollars less than they were a few years ago. We see builders giving $100K - $200K incentives just to unload their properties in attempt to avoid bankruptcy.
The poor housing market is a hard thing for sellers to swallow, but the fact is things will get much worse before they get better.
This is a very timely list and I agree and I think you’ve inspired another blog!
There is no such thing as a low ball offer:)