Every time you cross the street you look at the small cottage beside the little pond. You get mesmerised by its beauty. It seems to be a different world altogether. The cottage stands with its aura and asks you to look at its grandeur. You wish that you could buy the little cottage and sit under the banyan tree beside the house. It would be peace!
One day you get to know that the owner wants to sell that property. You get thrilled. You inform your parents of your desire to buy that cottage. You also start consulting with some of your friends who suggest you make a lowball offer.
You wonder what it must be. Well, a lowball offer is an offer that you make to the other party while transferring the ownership of a property. The lowball price is considerably less than the price that the other party determines.
In this article, we will understand the lowball price in detail and the time/situation when you (as a property buyer) can make a lowball offer.
It is not that a lowball offer is made only for houses. It can be made while selling or buying anything like a car, and even while negotiating with a dealer to book a hotel room, etc. But with regards to land, making low ball offers is only an exchange strategy utilized by the homebuyer to purchase a house for significantly less amount than the seller’s asking price. Assuming you need to buy a home in a buyer’s market, you can find a seller who will consent to a lowball offer. Regardless of whether you are in search of a house in an economically tight market, you can find sellers — it might just take a little more examination.
By making a lowball offer, you can find out how adaptable the seller or dealer is. Nevertheless, there always remains a danger that the seller might ignore your offer in hope of finding a better customer from whom he can draw in a superior cost. If the case is so, you as a low-balling purchaser can return with a higher proposal than you had initially submitted to check whether the dealer will negotiate with you once again.
There are a few occasions when making a lowball deal can assist you in getting the home you desire and also save you a considerable amount of money. However, try to be a little cautious while dealing with these types of offers. You can do a little bit of research on this before negotiating with a seller.
Another point that I would like to bring your attention to is the type of market. Yes, you need to have a thorough idea about whether the market is a buyer’s market or a seller’s market. Suppose, the market is in favour of the seller, then there will be several houses and several prospective buyers too. If the offer made by you does not satisfy the seller, he can finalise the deal with any other buyer. Thus, you can say that it will not be an appropriate time to make a lowball offer! On the other hand, if you find that there are houses available, but the number of buyers is comparatively less, you can take that moment to be appropriate to make a lowball offer because there is a greater chance that the seller or dealer might agree to your offer.
Once you find the house you would like to buy, start knowing some factual details about the house too. Try to understand the seller and his needs, know the market value of a similar kind of property in the locality. It will help you in making a lowball price. If you find that a property is not attracting potential buyers for a long period of time, you can attempt to offer a considerably low value. It should not be such that it might offend the seller because ultimately it is human relations that matter! Suppose, the seller wants to buy the property at Rs. 25,00,000. You can say that you would like to buy it if the former gives it at Rs. 20,00,000. You simply can’t say half the initial price!
Now-a-days the builders and developers have started to offer smart homes. A smart home is a home with automated electronic gadgets that can make your life easier. It is of no doubt that a house that is recently built and is updated as per the latest technologies will have a higher price than the older ones. Thus, you should know about the price of other such houses in the same area. Then you can go to make a lowball offer. Further, try to logically explain to the seller why the price that you are offering is fair enough. If you can handle the seller/dealer properly, the chances of getting the house at your desired rate increase.
While making a lowball offer, try to avoid unnecessary contingencies. Remember that other buyers in the market can pose tough competition to you! A seller will sell the house to that person with whom the transaction is made smoothly. Why he would sell the property to you (who is providing several conditions) and not the other person who is providing negligible conditions? It is always better to spend some money on repairing the house and buy the house at a low price initially.
Buying a house is a tough job. It requires adequate research and time. The seller takes into consideration several factors (the total amount of money, the mode via which the money is paid, the down payment, contingencies, closing date, etc.) before he/she decides to sell the house to any prospective buyer. Remember that you are not the only buyer who wants to buy a particular house. The seller can deal with others if your offer does not satisfy him/her. So, it is always better to consult with expert agents who can truly help you in this matter. At Roodland India we have a team of professionals to guide you in the right direction. You can mail us at firstname.lastname@example.org in case you have any queries to be answered.