You ask, we answer. Here is the latest question from a current buyer: “Are low ball offers still ‘a thing’?”
We’ve gotten this question several times over the past few months: “are low ball offers still happening?” The question typically stems from buyers looking to find a bargain or process those listings that are clearly priced above market. Here are some general attributes of todays low-ball offers:
- Time on the market: if a property has been on the market for a year or more, several factors could be at play. Either the seller is not serious at all or the listing is so stale that stagnation has become a self-fulfilling property. The latter could happen either due to unrealistic seller pricing at the beginning of the listing cycle or one to two buyers that fell through towards the end of the process (due to building requirements or buyer profile complications). Either way, it can’t hurt low-balling in this scenario to get a true feel for the level where a deal can get done.
- Time in the market adjustments: if you’re a low-baller, you should readjust your expectations about how long it will take you to find a property. While the search lasts from 3 months to a year for your typical buyer, this time frame increases four fold, stretching out to the 4-year mark. Make sure you’re prepared for the long haul.
- The generational difference: we’re noticing a significant difference in expectations between generations, which is adding a layer of complexity to the “low ball offer” discussion. The younger generation is far more direct and bottom line oriented than older ones, meaning they don’t include any cushion in their offers, any negotiation wiggle room. This could feel very abrupt and brash for older sellers who are used to a back and forth.
- A delicate game: making offers well below the asking price requires lots of diplomacy, timing savvy and communication expertise. This is because, especially in a seller’s market like we’re in today, the risk of offending said seller to the point of not responding or ever taking the buyer seriously are quite high. A significant amount of due diligence should be done to comprehensively understand the seller context, the property history and existing circumstances. Further, the very way in which the offer is delivered, along with its structure and messaging, are critical.
The simple answer to the question is therefore “yes”, they still occur, but they are entirely based on the unique combination of the property, price, seller and buyer. Have a question for our team? Ask us at email@example.com!