Buying a House: Common Lowball Offer Mistakes
A lowball offer is an offer that is substantially below the listing price of a house. If you are going to buy a house, you might as well try to get it for as low as you possibly can. For this reason people sometimes make low offers because you never know if the sellers will accept your offer.
More often than not sellers are offended at lowball offers and do not seriously consider accepting the offer. Homeowners are usually emotionally attached to their home and are incensed when people put in an offer that is well below what is considered the true value of the home. Sometimes sellers will accept lowball offers but only if they are presented correctly. If you are going to make a lowball offer on a house, do not make these three mistakes.
Mistake 1: Asking for concessions
Everyone that sells a house wants to know exactly how much they will make off the sale. On a lowball offer, they are already making much less than they expected. If you offer is asking the seller to take an even further loss by paying for closing costs or other fees, it will be rejected. There is an adage that you should never hit a man when he is on the ground. Asking for concessions on top of a lowball offer is hitting a many when he is down.
Mistake 2: Little or no earnest money
A potential buyer of a property will submit earnest money with their offer. Earnest money shows the buyers commitment to purchase the property because, if they fail to buy, they will forfeit their earnest money. Lowball offers that have little or no earnest money attached to them show that they buyer is not willing “to put skin in the game.” Sellers will never seriously consider an offer that has little or no earnest money.
Mistake 3: Long closing period
If you are going to sell something, you can either expect to earn a quick nickel or a slow dime. You should always expect to earn more by waiting for the right offer. Lowball offers that ask for an extended period of time will be rejected outright because sellers are not interested in making a “slow nickel.” Sellers could sell it to somebody else during the extended closing period for more money so they will always pass on offers with long closing periods.
There is no crime in submitting a lowball offer on a house. If you avoid these common mistakes, you just might find a seller willing to accept your offer.
