When to pitch a lowball offer
Between the stress, time and hidden costs associated with moving, it can be tempting to want to pinch pennies when making an offer on a new home. You might have even thought about pitching a lowball offer. By definition, a lowball offer is considered an offer below the market value of a home. But if you’re committed to buying your perfect home, is a lowball pitch one you should be making? With nearly 20 years of real estate experience, we’ve seen what works and what doesn’t.
Is it okay to pitch a lowball offer? The short answer: yes, no and maybe.
Take a group of friends for example – Monica, Ross and Chandler. Monica is working with an experienced real estate professional to find a home in Rochester. After looking at properties and doing their homework on the current market and surrounding community, her and her realtor found the perfect home – but it’s clearly overpriced for the current market and neighborhood. Because Monica found a house that checks all her boxes, but knows from working with an experienced agent that it’s priced above market value, Monica has sound reason to make an offer on the home that is lower than the asking price. In this scenario, we would encourage Monica to counter with an offer for a fair market price, even if it might be less than what the seller was asking.
Before looking at properties as a potential buyer, we advise to identify your top three non-negotiable items you’re looking for. When asked to list his top three criteria in a new home, Ross wants a three-car garage, stainless steel appliances and a fireplace. If, like Ross, your top priority is not to find the absolute lowest, best price on a property – don’t pitch a lower offer. If you’ve found a house that meets all three of your criteria, and the cheapest house is not one of those, don’t make a lower offer.
However, if, like Chandler, you are specifically looking for an investment property and it is your top priority to get the best possible deal you can find in Rochester on any given day – then maybe make a lower offer.
In short, there are few situations where we would recommend a true lowball offer. If after due diligent research and consultation with a trusted real estate professional, we always recommend negotiating a good fair market price for a home that meets all your criteria.
If you’re starting the home buying process, we’d love to meet with you to talk through the process. Contact us to set up a meeting today.