Posted by James Strange on August 29, 2002 at 06:59:41:
Keep in mind that the asking price is not the same as Fair Market Value. Some ask more than FMV.
Example:
FMV $100,000
asking $120,000
your offer $84,000
equity 16%
Making low ball offers - Posted by JW
Posted by JW on August 29, 2002 at 02:31:44:
Has anyone ever gone through the Multiple Listings and made an offer on every one of them? If so how much less than the asking price did you offer? Can I get some feedback on this approach? I am currently making offers of about 30% less than the asking price. I am having a realtor make the offers for me & I just made a 100 offers today. I figure I should get at least one positive response. And with 30% equity in the house to begin with I think getting some financing should’nt be a problem. What do you think?
Thanks,
JW
Re: Making low ball offers - Posted by Rob FL
Posted by Rob FL on August 29, 2002 at 08:47:14:
I generally avoid doing this finding that it’s a waste of time for the mostpart especially in the hot seller’s market that’s been ocurring in my area for the last couple of years.
Don’t get me wrong. I do make lowball offers, but they are targeted towards specific properties. Mainly properties that indicate some motivation … vacant, bank-owned, pre-foreclosure, fixer-upper, old listings, etc. Lowballing newer listings that are in ready-to-move-in type condition annoys everybody including the seller, the listing agent, and after a while your agent because many of the listing agents and the sellers are going to be sending back nasty notes or nasty phone calls. And your agent is going to have to deal with these other agents in the future on other deals. I know from experience.
Make sure the listings show some form of motivation and then lowball all you want. But stay away from newer listings in good condition unless you want to get bloodied from battle very quickly.
Re: Making low ball offers - Posted by Wayne-NC
Posted by Wayne-NC on August 29, 2002 at 07:46:48:
Keep in mind that the equity is there for you but the lender is not going to see it that way. They lend on the appraisal or purchase price, whichever is lower. What is your exit strategy? Is this your primary residence? Are you going to flip? Different rules apply to each. You are also looking for a motivated seller which is discussed at great length on this site alone. Not many people are going to give away 30% of their equity and pay a commission and closing costs on top of that. Remember that the seller may have a mortgage to pay off as well. The listing agent will also advise against this especially in a hot RE market. I bet you have one tired agent. With all that said, if you get one it’s worth it. Great job.