Tips For Submitting An Offer Lower Than The Asking Price
Posted on: 27 December 2019
No rule says that you must make an offer that is equal to or more than a property's asking price. You may succeed with a low offer if you go about it the right way. Below are some tips to increase your chances of success with a low offer.
Consider the Totality of the Situation
Whether or not your low offer is acceptable depends on various factors. The property market, the condition of the house, the accuracy of the listing price, and the motivation of the seller all determine the lowest price the seller can accept. Therefore, don't look at a single issue and assume a low offer is acceptable. For example, a property might be old, but if the seller is not motivated and you are in a seller's market, your low offer might not cut it.
Don't Go Too Low
Another tip is to make a reasonable offer; don't go too low, because the seller might just trash your offer. For example, making a $300,000 for a property listed for $550,000 is not reasonable. There no way you are going to get such an offer accepted. For such a listing, offers should all be above $500,000.
Have Financing Ready
When making a low offer, you want to make sure that it is as strong as possible in other areas. For example, you should have your financing ready (a mortgage preapproval or a cash offer will do). That way, the seller will know that your offer is serious and the deal will sail through if they accept your offer. Even if the seller doesn't agree to your initial offer, which is highly possible, they will be more likely to negotiate with you than if you don't have your financing ready.
Go Easy on the Contingencies
To do everything possible to make your offer as reasonable as possible, you also need to minimize your contingencies. Note that numerous contingencies make life difficult for the seller and introduce some level of uncertainty on the deal. A low offer coupled with numerous or unreasonable contingencies just isn't going to cut it with the seller.
Back it Up
Lastly, it's also a good idea to have a reason for your low offer. For example, you can mention comparable sales in the area to show the seller that you have done some research. That way, the seller knows that you did not just pluck a figure out of the blue. Make your reasons known respectfully; don't trash the property, because no one wants to hear negative things about their home.
For more information and tips, work with a local real estate agent.
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