In an effort to save money on homes for sale, you can offer a much lower price than the seller is asking for. In an ideal world, the offer will be accepted and you can take possession of your new home. However, lowball offers do not always work out. If you are planning to place a bid lower than the listing price on a home, here are some tips to use.
Know the Market
Just because you feel the listing price of a home is too much does not mean that the market agrees. The condition of the current housing market plays a major role in whether or not the price is too high or low. For instance, if the market is in favor of the seller, coming in with a lowball offer could cost you the home.
Do not focus on the state of the national housing market. You need to concentrate on the local market. Different factors influence whether or not sellers or buyers are on top and it can vary from city to city. Once you know whether or not the market is on your side, you can start determining what your bid should be.
Look at the Home's History
A home's history can have a bearing on how likely a seller is to take a lowball offer. For instance, if the home has been on the market for a year, the seller might be more motivated to take the lower bid. However, if the home has been just listed, the owner might be more optimistic about his or her chances of getting a better bid and turn yours down.
In addition to looking at the home's history, you need to look at comparable properties in the area that have been sold and that are currently on the market. You can use the data concerning those homes to help shape negotiations with the seller. For instance, if the comps in the area sold for far less than the asking price on the home you want, you can point this out to the seller and possibly negotiate for a lower price.
There are many other ways you can determine what your lowball offer should be. An experienced real estate agent can help you factor those into your bid and also assist with negotiating with the seller. With the agent's help, you can avoid pricing yourself out of the running for your dream home.