How to Make a Low Ball Offer

According to Marketwatch.com, Home sellers are not automatically turning down offers that come in far below their asking price these days as housing prices cool and the inventory of homes for sale remain elevated in many markets. However, whenever an aggressive offer is attempted, there is always an inherent risk in going too low. There is a real danger the offer will insult a seller to the point that they will refuse to counter. The seller could easily make the assumption that the buyer isn't committed to making a deal.

"When you're making an offer, you must justify that offer with outside data, then you will less likely be perceived as being insulting or not a serious buyer," says Jon Boyd, president of the National Association of Exclusive Buyer Agents.

Here are three guidelines on how and when to make an aggressive, low-ball bid for a home:


-Motivate the seller to make a deal

Some sellers are going to be more willing to negotiate than others at a low offer and there are several tell-tale signs that might indicate more flexibility on the issue of the seller's price. For instance, if the seller has already purchased and closed on another home, they are more likely to be willing to make a deal. And certainly if the property has been on the market for a long time, the seller will be interested in considering any offer. Overall local market conditions also play a role. If the market is sluggish and the house has been on the market for over a year, clearly the seller may be more opt to your low-ball offer. Therefore, it is important to know your seller's situation and possibly use it to your advantage.

-Use Hard Facts to Make Your Case

When putting together an aggressive offer, don't just hand the seller a purchase agreement with the price you're willing to pay. Instead, create a cover letter that explains exactly where that number came from. In addition to citing comparable sales in making the offer, it also is important to include details regarding the amount of inventory in the immediate surrounding area. If the seller sees two years worth of inventory, he or she may sell for potentially 5 - 10% less than what houses have sold for in the neighborhood. Buyers can even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd. That way, they can detail what they like about the house but express their fear of future dropping values.

-Be Prepared for Either Negotiation or Rejection

Potentially, there is plenty of room for a seller to make a counter-offer, especially if there hasn't been many other bids. It essentially initiates dialogue between the buyer and seller regarding the purchasing price of a home. Therefore, it is important to be prepared with another counter-offer. And not all hope is lost if a seller doesn't bite on your offer or counter-offer immediately. Sometimes, if you give it a modest amount of time, the seller comes around and decides to negotiate.

Siddique is real estate investor for over 22 years and President of http://www.butterflylister.com Download Free How to sell your Home for Full Price in any market.