Yesterday I thought a home buyer on the radio sounded like a garage sale shopper in his tactics. I reflected during the day that I’ve read, written, and lectured about lowball tactics before, so I was a bit surprised that I had actually been taken aback by a bid $50,000 below the asking price. Then an article by Marcie Geffner for bankrate.com came across my laptop, and there was no doubt that the only thing that should surprise me is a house offer even remotely close to asking price!
Ms. Geffner informs readers that in an era where buyers want bargains and sellers just want out, “home buyers deserve to make lowball offers”, though the definitions range from my understanding of less than 90% of the asking price to an agent quoted in the article of any offer less than 75%. Another agent from Scarsdale “suggests that just about any offer could be labeled as ‘lowball’ if it provokes the seller to outrage or anger. The best definition I've ever heard is that 'lowball' is an offer that's so low the sellers can't contain themselves. They get angry. You can't come up with a percentage because not every property that comes on the market is (priced) high. It's very specific to each house."
Of course, it is also specific to who the seller is. A pre-retiree looking to cash in on equity and move to Sun City may get a lot more easily insulted than a foreclosing mortgage lender. The latter seller may make buyers bolder about putting in lowball offers, but the mortgagees can also (sometimes) wait for a better offer longer than can a homeowner carrying two mortgages with family or a job in another state.
I tell my prospective clients who are sellers to never slam the door even if the worst possible offer is on the other side. “Start talking and try to keep the conversation going as you and the buyer come closer to a price you both find comfortable”, I advise. Talking doesn’t cost a thing and may just end in a sale, while huffing and puffing never does. I like how one of Geffner’s experts put it: "Don't let (the deal) die on your end."