1. How To Write A Lowball Offer On Real Estate
In today's insane real estate market, you see and write a lot of lowball offers. I have been selling real
estate since 2003, and I have written my fair share of low offers. Most low offers get rejected because
the seller is looking to get a certain price, but once in a while you get one accepted. Here are some
things that you can do to make your lowball more appealing to the seller:
1. Put down a large amount of earnest money
2. Make your earnest money non-refundable and immediately available to the seller
3. Schedule the closing ASAP
4. Eliminate contingencies, for example, eliminate the inspection contingency
5. Don't ask for any special favors, for example don't ask for a home warranty
6. Show the seller that you will be able to financially close the transaction
7. Take on the seller's problem, ie., accept the house with all of its defects
8. Be very careful writing a letter that "explains" your lowball offer. You might insult the seller
9. Respect the seller's needs, for example, allow him to rent back for a while if needed
10. Write lowball offers on properties that have motivated sellers, for example, vacant properties,
properties that cannot be financed and properties that have been on the market for a long time
With regard to the letter that "explains" your lowball offer, the only time that I was successful, I wrote
an offer for my client that explained that the buyer really loved the home, but it was beyond their
reach financially. I explained that they could afford a certain price and nothing more, and it worked!
I tried to justify a low offer by sending the listing agent "comparable properties" on one occasion, and
that did not go over well at all.
You may have to write more than one low offer before you get one accepted, but this is a legitimate
way to negotiate a lower price on a property. You just have to have the stomach for it. You may also
find yourself playing ping-pong. That is: offer, counter offer, counter to counter etc. This can be a
huge waste of time, but as long as there is movement on the part of the buyer and seller, it is
probably worthwhile to continue.
Follow these same rules when writing low offers on bank owned properties, just keep in mind that in
my experience in writing offers on Portland condos and homes, Fannie Mae and Freddie Mac are not
in the mood to negotiate. It appears that at least in my local market, they follow a step down
approach. The tend to drop their prices in a systematic manner over time instead of taking lowball
offers. This has been frustrating for my clients because they expect these organizations to come off of
their asking price.
Sherman oaks real estate