Recently, I received an extremely low offer for a three bedroom listing. Obviously, this didn’t make me or my seller happy, but I assumed the buyer’s agent would provide a reasonable explanation for the offer, including ample documentation.
The prospective buyer wanted a four bedroom house, and the low bid anticipated the construction costs the buyer would incur to add on the fourth bedroom.
Lack of bedrooms does not justify a lower price. It means you need to look at bigger houses.
How to Present a Low Ball Offer
Since there is an inherent conflict of interest in any real estate transaction (the buyer wants to pay the least and the seller wants the most,) a successful offer is more that just a dollar amount.
An explanation and some stroking go a long way to initiating a successful negotiation.
Good documentation should accompany any offer, low ball or otherwise. Examples of such explanations would be:
- The asking price is considerably lower than the price for which other similar homes have sold recently. Attach comps.
- The asking price does not adequately reflect that there is significant delayed maintenance or other repair work to the property. Attach descriptions.
- The buyer is offering all cash, quick close, a waiver of the appraisal or the inspection. Attach documentation.
Unjustified Reasons For a Low Offer
The style of the home
This is architecture, not relevant to the asking price
The paint colors (wallpaper, built-in bookcases, Corian counters)
This is design, not relevant to the asking price
This is aesthetics, not relevant to the asking price
Th lack of a fireplace
This is amenity specific, not relevant to the asking price
Low Ball Offers Can Succeed
Not all low ball offers are nonstarters. Depending on a number of factors, a seller might decide to counter.
And the best way to receive a counter offer back is with a well documented, well mannered offer. If positioned correctly, your initial offer might get you the house of your dreams.