So, Boston, as we previously discussed, your lowball problem is a matter of record. And while I wouldn’t necessarily call a 10% slice off a property’s asking price a “lowball offer”, I don’t think it’s wise to toss out the cheapest number you can come up with just because you think you can get away with it.
In fact, as Redfin founder Glenn Kelman states in the preamble to his own impressive lowball tips list, the seller’s state of mind is critical. To keep a seller from feeling like Ed Harris to your Alec Baldwin, don’t come at a potential transaction with nothing more than a vague statement about the down market.
It’s a lot harder to argue with numbers than it is to argue with a person, so get your statistical ducks in a row. Know data for the rest of the neighborhood–what homes are going for, how long they’re waiting on the market before being sold, what commutes are like. Also, know this data might not turn out in your favor. And if the numbers aren’t on your side, reconsider why you think the home is worth so little.
This brings me back the point I made Friday; picking a target home to lowball is critical. Keep in mind:
- The owner of a property with five $10k price reductions is generally in less of a hurry to sell than the owner of one that dropped $50k all at once.
- Owners of distressed homes are more amenable to lower prices than those in no hurry to move the property. Has the owner moved out? Has the property changed hands recently? Is it owned by a bank?
That said, don’t expect your bargain-basement offer to take just because there’s blood in the water. Even flat-out auctioned properties generally beat their minimum asking bid, and in some cases go well above them. Generally, I like this bit of advice from Binyamin Appelbaum at the Globe’s RE Blog: “If you like a house, and there is a price you’re sure you’d be happy to pay, why not share that price with the seller and see what they say?”
But then again, the price I’m happy to pay is generally well below what people expect to get.