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February 15, 2007
How low can you offer...?
How low can you make an offer for a brownstone below asking price without it being "embarassing"? I understand that every broker/seller/property is different, but is there any guideline on this? If asking price was $2 million, and one offered $1 million, that would be too ridiculously low. What about $1.6 or $1.65? Is that considered offensive? Or, is there no such thing as being offensive in the real estate world and make any offer no matter what.
thoughts?
Comments
If it were me, I wouldn't negotiate with myself, but instead just make the offer. Unless you absolutely love the apartment and don't want to chance them saying no and then refusing to negotiate with you. Otherwise, chances are... if it's totally offensive to them, they just won't say anything and then you raise your offer price.
Good luck!
Posted by: Anonymous at February 15, 2007 11:37 AM
I think there are offers that can be offensive...but who cares if you are offending if it really is what you are willing to pay?
Don't waste peoples time if you are just putting out ridiculously low offers...but if your serious, the worst that can happen is they say no.
Posted by: Anonymous at February 15, 2007 12:34 PM
I disagree with 12:34. If offers can be offensive, then asking prices can be offensive too. You don't know much about the seller - what they consider too low and whether their expectations are in line with the market. Sellers can waste time too by asking for more than the market can support - you're the one hoofing it to all the open houses every weekend anyway.
Offer what you feel the property is worth to you. If they don't want to sell it for that ammount they won't - they may come back at you with a counter offer. So it goes.
If you are reasonably informed about the market you're planning on buying in, then you should be fine. If not, then it may be a good idea to get informed before making a very expensive decision.
When I bought my house, the seller was originally asking 28% over what I ended up buying it for. They weren't offended by my initial offer, which was lower than the agreed-upon sale price, and I wasn't offended by their asking price.
Besides, if the asking price is much higher than the comps, the bank won't finance a loan for the property.
Posted by: Anonymous at February 15, 2007 12:47 PM
Comps, comps, comps. Get your comparable sales together so you have an idea of what constitutes a reasonable offer. If the sellers come back with the ol' "I can't believe you offered so little", you have ammo should you wish to engage in a debate.
There are a lot of factors that go into the seller's mindset when offered a lowball bid: how long has the property been on the market? How motivated is the seller (divorce, relocation, already purchased another property, or are they just fishing)? Has the asking price been reduced, preferably multiple times? Can you sweeten your bid with pre-approved financing, and if it's a fire sale, are you willing/able to close quickly?
Posted by: zeebee at February 15, 2007 2:00 PM
Let's assume that the fair market value of a house is $2 million (based on comps), but you can only afford $1.7. Is that ridiculous to offer? I guess at the end of the day, who cares? Make the offer and worst case scenario, you get laughed at. I was only trying to understand how low one could offer on a place (knowing that we would be trying to get a "deal" as that is the max we could afford).
Posted by: Anonymous at February 15, 2007 2:38 PM
"Don't waste peoples time if you are just putting out ridiculously low offers...but if your serious, the worst that can happen is they say no."
WRONG!.
Do WASTE hteir time. When an asshole seller overprices his POS by $200.000 do you think he gives a rats ass whether YOU'RE offended or not?. Please.
Lowball unitl you find the right chump who's about to go into foreclosure or needs a quick sale and REAM THEM !.
That's EXACTLY what sellers have been doing to buyers for years up to now, so given that times are a changin' and the shoe's on the other foot;
Lowball AND LET 'EM SQUIRM.
Posted by: Buyers Times are a'comin at February 15, 2007 4:54 PM
I don't think the shoe is on the other foot. The latest statistics show sales values are UP in New York City. Maybe you're renting your shoes?
Posted by: Anonymous at February 15, 2007 7:39 PM
i just sold my townhouse through a broker, and i was shielded from the low ball offers altogether. so, my advice is go buck wild, you and your offer are just a number. when the right one comes in the realty begins.
Posted by: anon at February 16, 2007 7:31 AM
There is a difference between bidding what you can afford and bidding what you think the house is worth. $1M on a $2M house is absurd. There will be people who will pay the $2M or just under, or just above. I'm all for low-balling, but doing it realistically if you really want the house.
Posted by: Anonymous at February 16, 2007 9:24 AM
Actually, a $1M offer on an OVERPRICED $2M listing is not absurd in the least.
Our house (in the burbs, when we moved out of the city) was originally asking $1.895M. That was just flat out ridiculous based on the condition of the house. Sure, on paper it made sense because of the 'stats' like bedrooms, bathrooms, square footage, school district and acreage, but once you set foot inside the place it was obvious that it was WAY WAY overpriced.
We bid what we could afford--making allowances for the fact that everything from the electric to the heating to the plumbing needed full replacement/renovation, and we got the house for $995K. The reason? The homeowner KNEW it was over priced, the broker that listed it was a total tool, and frankly the homeowner didn't want a developer coming in here and tearing it down.
A year and a half, and well over a hundred grand in renos later, we're still in love with it, and we grow more so every day. If we put it on the market right NOW even with all we've done to it, though, it still wouldn't be worth that crazy $1.8M. More like $1.1, which means we'd lose money.
Posted by: Anonymous at February 16, 2007 1:03 PM
"I don't think the shoe is on the other foot. The latest statistics show sales values are UP in New York City. Maybe you're renting your shoes?"
Lol. You say "renting" as if it were a bad word.
But if you're a homeowner, YOU'RE A RENTER TOO! Only in your case, you rent it from the bank and for 3 times what a regular renter pays. PLUS commissions, taxes, expenses and upkeep.
All for the illusion of 'homeownership'. Do you "own" it or does it own you?.
"Statistics" are managed by realtors, who notoriously twist the numbers and outright lie. Look around you; prices are softening ALL over the country. EVEN IN NYC.
Posted by: Buyers Times are a'comin at February 16, 2007 1:06 PM
maybe i misunderstand, but i'm a homeonwer and i'm NOT renting. i'm paying off a loan, which is a very different thing.
when i was renting i was paying monthly and when i moved out i got nothing. as an owner, when i move out (meaning when i sell) i'll be getting all my "rent" back. maybe more so.
Posted by: benno at February 16, 2007 5:11 PM
anon 7:31 - shielded from the low ball offers? It is actually not legal for your realtor to not tell you about EVERY offer they receive.
I think there's nothing wrong with making an offer that is either a) what you think it's worth or b) what you can afford. Go for it.
Posted by: Anonymous at February 17, 2007 8:18 AM
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