In real estate, a lowball offer is considered an offer made on a house that is drastically under the asking price. An example of this would be if someone offered $100,000 on a house with an asking price of $140,000. This type of offer can be upsetting to home sellers; however, there are certain factors that can lead to sellers being more apt to accept what is considered a lowball offer. Here are some factors that may cause a seller to be more likely to accept a lowball offer.
The House Has Been Listed Forever
Making a lowball offer is not a wise idea when a house was just listed for sale. The seller of the house is probably not going to instantly accept an offer like this without giving it some time to sell for a decent price. On the other hand, if the house has been on the market for months, or longer, there is a much better chance the seller of the home will accept an offer that is a lot lower than the original asking price.
The Seller Is Highly Motivated to Sell
A second factor that can lead a seller to accept a lowball offer is when the seller is extremely motivated to sell. For example, if the seller is relocating for work, he or she might not be worried about the price the house sells for, especially if this person's employer has offered to compensate him or her for the house. When sellers want or need to sell their homes quickly, they will be more likely to accept lowball offers than those who do not need to sell right away.
You Are a Cash Buyer
If the first two factors exist with the seller of the house you want to buy, you can almost guarantee the seller will accept a lowball offer if you have cash to pay. When people purchase homes for cash, the deals can go through very quickly. This is primarily because there is no lender involved with the transaction, which means you will be able to buy this house fast and move in within a week or two. This can be a huge incentive for a seller that really needs to close on the deal.
Making a lowball offer can go one of two ways. The seller might agree to it or counter it slightly, or the seller might feel very insulted and may instantly reject the offer you made. If you are not sure how much to offer on a house you really want, talk to a real estate agent today.