January 20th, 2009
Lowball Real Estate Offers In Richmond
What is a lowball offer? Who makes these types of offers? Most of us think of some slick investor trying to get one over on you. That is not the case anymore. Lowballers are young families, recent college grads, newlywed couples, single moms, probably the opposite of what we would think of as a lowball real estate buyer.
Why are we seeing atypical lowball buyers making lowball offers? Because they can be successful doing so! A lowball offer is usually an offer less than 90% of the asking price of a home. This practice was pretty rare around Richmond just months ago, but now we are seeing more and more of it. Sellers are getting anxious with the continued uncertainty in the economy and buyers know this. Local bad economic news from once giants like Circuit City, Genworth Financial and LandAmerica just make matters worse.
Many homebuyers are happy to call themselves successful lowballers if it gets them into the home of their dreams. Homebuyers are not worried about offending, they are feeling lucky in the current housing market and are taking a shot.
Throughout the Richmond region, more and more buyers are bidding low with high hopes. The practice fails more often than not, in that buyers are unlikely to get themselves a steal. Many sellers though are swallowing hard and negotiating, because lowballing is a reality (for better or worse) and it’s becoming part of the new norm in buying or selling a house.
Many buyers are making lowball offers without concern about ruffling the feathers of the sellers. For sure, there is an aspect of lowballing that seeks to take advantage of other people’s desperation or misfortune. Some lowball offers are so far out in left field that they are not taken seriously, however in a difficult real estate market like we are starting to see in the Richmond, Virginia area, some lowball approaches practiced within the bounds of reason can work and can also serve as a reality check on overpriced properties and at least get the wheels of negotiation rolling. Homebuyers are more frequently seeing no shame in making a low offer on a property especially if they feel it’s priced above the market.
Sellers are offended sometimes when a low priced offer is made and are unwilling to negotiate. This is a risk a buyer must be willing to take in making a lowball offer. Many sellers are emotionally attached to their house because its their home, it could be where they raised their family or hold other precious memories.
Buyers who have their heart set on a house may want to back off and make a less aggressive offer if they want to insure a negotiation. A lowball offer can be taken by a seller as a slap in the face, and hold a grudge against offending buyers and sometimes their agents.
Deals can be found if a buyer has enough nerve and time to put up with repeated refusals, but “you take your chances when you do it” advises Skye Bruce, the #1 REMAX Agent in Central Virginia in 2007 and 2008. Sometimes it works out, sometimes it doesn’t! Oh what unsual times we find ourselves in!
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