Lowball Offer on House

[squiffy]

First, I want to thank OP for a great post. I would like to see more such posts re: negotiating for a good price on cars, homes, etc.

I may go back and try to post some info on my car buying efforts in 2006 and 2007. Hopefully others will have some experiences they can share.

I think you are letting your emotions get in the way of your rational thinking.

The FACTS you present in your post directly conflict with the STATEMENTS you make.

You clearly state that there are appraisals and comparable sales that show the house is worth more than you bid. You characterize your own bid as a lowball offer. And yet you are surprised and disappointed that the seller is not stupid or desperate enough to have taken it.

You WANT a great home at a rock bottom price. But when you make a lowball offer, that is below market, by definition, very few rational sellers will accept.

Now we don't have any solid statistics. But if you are offering 230K for a home that is worth 250K, then a rational seller who is not desperate simply won't take it. He will wait a few months until he can get 250K from a rational buyer.

Lowball offers can work. But if they are 20-30% below market, then you may only have a 1% success ratio.

If you make 100 lowballs offers, then you might get one acceptance if that.

So if you are making lowball offers, then you have to accept the fact that you will very likely get rejected. And if you want too long, you may lose the house.

So you need to balance your desire to get THIS HOUSE, with your desire to get a GREAT DEAL on some house.

The chances of getting an incredible deal on any one house is exceedingly small even in a down market.

Also, you need to rethink what market value really means. The home is worth only what you are willing to pay and the buyer is willing to accept.

It's possible, as you yourself wrote, that the seller is in no rush to sell. He has plenty of cash, plenty of equity, and plenty of time. So why would he accept a lowball offer, unless he is desperate, or unless your offer is not a lowball offer, but a reasonable offer at the market rate.

If you really WANT this particular home, it looks like you will have to offer something closer to the asking price and closer to the market value, based on comps. Otherwise, give up and move on, or just wait and see if he comes down. But if you wait too long, you may lose the house to another buyer.

I think you overanalyze the negotiating game in your earlier posts. You offer what you think it's worth, or a little less. And he either takes it or not. It's pretty simple.

Given the info in your own posts, I cannot imagine why you would have expected the offer to be accepted.

Remember, he has already come down from his original asking price, so he may be reluctant to go down much more.

If the market is going down, and if you are patient, you very well may be able to force him to come down. But you will have to be patient and wait. Just say your offer is firm. Make no counter. And walk away. If no one else makes any offers, then he will have to start thinking about coming down.

But realize that when you try to get a great deal with a lowball offer, you will probably LOSE a very very high percentage of the homes you bid on. Period.

You will gain experience as you do more buying and selling of stocks or make more offers on homes.

You should be asking an experienced local realtor what is happening in the market. And how much homes are selling for below asking price, on average. This info should be available to a reasonably competent, reasonably experienced realtor.