Personal Finance

Whats considered a lowball on a house.

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  • May 9th, 2014 11:47 am
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Deal Addict
Jun 20, 2005
1042 posts
24 upvotes
Outside of Vancouver

Whats considered a lowball on a house.

Im looking at buying a another place.

Found a place that meets most of the requirements but needs a bit of TLC..(Not a huge deal)

what on average would you consider a lowball offer. I know that every situation is different..

but im not attached to this place so i dont really care if i dont get it.. i just want to have a chance.. not that its the end of the world..

Im thinking 15% ish below the asking price.. for Reference the house is $440,000 asking.. Assessed at $418,000

Im thinking about offering 370,000?

thoughts?

thanks for the input
Shut your Mouth when you speak to me.
39 replies
Deal Addict
User avatar
Nov 22, 2002
3047 posts
701 upvotes
Go for it. But how did you come up with 370?
15% off asking is not $370

Anyway, asking price is meaningless. What are other properties going for in the area.
Then go from there.
Deal Expert
Oct 7, 2010
15536 posts
5790 upvotes
Sounds a bit more reasonable at 10% lower than asking. Might have a shot for counter offer if u put offer in at 15 below. Depends on how trashy the place is.
Newbie
User avatar
Mar 17, 2014
82 posts
8 upvotes
dahhunter wrote: Im looking at buying a another place.

Found a place that meets most of the requirements but needs a bit of TLC..(Not a huge deal)

what on average would you consider a lowball offer. I know that every situation is different..

but im not attached to this place so i dont really care if i dont get it.. i just want to have a chance.. not that its the end of the world..

Im thinking 15% ish below the asking price.. for Reference the house is $440,000 asking.. Assessed at $418,000

Im thinking about offering 370,000?

thoughts?

thanks for the input
Not sure if this is possible, but before you drop a number, try your best to find out if there has been a lot of interest (or any offers) on the place. If little to no offers, then low ball. Another strategy is to wait a bit (1-2 months?) before you low ball (assuming that the seller hasn't had much interest) rather than low balling right away, but this is risky as someone else may put in an offer while you wait. If it is a TLC type place, then that's a plus! Most buyers want places where they can move in without needing to fix anything. Probably stuff you already thought about ....
Deal Addict
Aug 19, 2013
2397 posts
1091 upvotes
You should find out what comparable have sold for in the area. Then consider the work that needs to be done. Don't just look at the percentage of asking price. This really means nothing. If they priced it low already to get rid of it then an offer should be closer to list then if they have overpriced the property. Also if the property is really overpriced you may over pay even if you offer 15% below list. You really need to see what things in the area have sold for.
Penalty Box
Apr 16, 2012
3565 posts
688 upvotes
Greely
Where do you get data for how much a house actually sold for?
Deal Addict
Aug 19, 2013
2397 posts
1091 upvotes
techcrium wrote: Where do you get data for how much a house actually sold for?
I always got that from real estate agents. Not sure where else you can get it. But it's the only way to know how much houses in an area are worth. Listing prices mean nothing.
Deal Fanatic
Dec 5, 2009
5768 posts
3612 upvotes
Totally depends how long it's been on the market. If less 30 days you'll likely need to be close to asking.

Are you in GTA? If so You can subscribe to to to homes sold report to see actual sale to listing prices, or get these from a RE agent. It's rare that anything sells for less than 95% of asking these days.
Deal Addict
Oct 29, 2010
4475 posts
811 upvotes
techcrium wrote: Where do you get data for how much a house actually sold for?
Your agent can tell you. Part of their membership fees they pay gives them access to that data.
Deal Addict
Feb 5, 2009
2808 posts
940 upvotes
Newmarket
Go for it, buyers want to pay as little as possible, sellers want as much as possible, the price is dictated by the market and if the seller is not willing to adjust than the sale won't happen. I don't understand the concept of being offended by the offer ;-) Same applies to buyer, if the price expectations are misaligned with the market, they will be searching for the properties for the very long time.
Deal Guru
User avatar
Dec 7, 2009
13885 posts
1368 upvotes
flafson wrote: Your agent can tell you. Part of their membership fees they pay gives them access to that data.
This is such a racket. It should be public knowledge.
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Check out caRpetbomBer's picks in this thread.
Deal Guru
User avatar
Mar 31, 2008
13011 posts
3095 upvotes
Toronto
Yea, about 15% is a lowball offer. Anything below 10%, likely not.
Deal Addict
Jun 20, 2005
1042 posts
24 upvotes
Outside of Vancouver
THanks for the input guy.

a bit more info:

The house has been on the market since Sept 2013 (With 2 different realtors now)

The Area the house is in, rarely has anything for sale in it, infact in the last 3 years only 1 other house has been for sale.. that house is still for sale now. for a higher price. (and im not interested in that house)

im waiting for to confirm if there has been other offers, however the fact that they have changes realtors suggests to me that they weren't getting any bites. Its worth noting the they haven't changed there price.

For TLC the house will require around 20,k of work i estimate, and thats if mostly done by me.

any other thoughts. Once i find out about the past offers if any then i will decide how low to lowball..

:-)

House in in the Fraser valley outside of Vancouver
Shut your Mouth when you speak to me.
Member
User avatar
Apr 22, 2011
432 posts
39 upvotes
I have mentioned it before in other threads but in NS we are super luck (though every province should have this) that we have a website that is called viewpoint. You can see how long anyhouse has been on the Market, it will show how many times in the past X years it's been for sale,sold, etc.

I used the website to technically lowball the home that I bought, it also listed the house 1 day before it went onto MLS and officially on the market. I arranged to see the house the next day. Compared the other homes in the area and asked for $15,000 less than asking price and settled on $10,000.

The seller realtor from what I was told said there was no way his client was going to take the offer on a home that hasnt even been viewed by others yet. Anyhow I guess the seller's agent was wrong. My only regret is I should have stuck with my original offer as I thought the price was about $40,000 to high for the home, only problem being was that a lot of homes when I bought got jacked up in prices as NS won the "Ships Start Here" Contract, which many thought would bring in new workers to the province and the only 2-3 other homes in the area where also priced similar.

Since your ultimately paying this in the end it depends on if you think you need the home and is worth spending X amount on it.

Sidenote: I did offer something around $270,000 for a house that was selling for $330,000 (or something around these numbers, it's been a while). I remember the seller was outrage (I assume) and came back with a counter offer of $5,000 lower than their original asking price. I walked away...2 months later they settled for about $10,000 more than what I asked for but significantly under the amount they originally wanted. So waiting has it's advantages as well.
Warning: Anything I write is to the best of my knowledge, I may be wrong about things, I may have a different thought on things than yourself and I do not always follow the herd. I am also a RFD personal finance addict.
Moderator
May 28, 2012
12484 posts
5278 upvotes
Saskatoon
dahhunter wrote: THanks for the input guy.

a bit more info:

The house has been on the market since Sept 2013 (With 2 different realtors now)

The Area the house is in, rarely has anything for sale in it, infact in the last 3 years only 1 other house has been for sale.. that house is still for sale now. for a higher price. (and im not interested in that house)

im waiting for to confirm if there has been other offers, however the fact that they have changes realtors suggests to me that they weren't getting any bites. Its worth noting the they haven't changed there price.

For TLC the house will require around 20,k of work i estimate, and thats if mostly done by me.

any other thoughts. Once i find out about the past offers if any then i will decide how low to lowball..

:-)

House in in the Fraser valley outside of Vancouver
The house has been on the market for almost a year and they haven't budged on price...what makes you think they'll consider your lowball offer? They're obviously not in any hurry to sell.
Newbie
Jul 13, 2013
96 posts
155 upvotes
Whitby
It seems in the GTA 10% OVER asking would be a lowball lol
Deal Addict
Jun 20, 2005
1042 posts
24 upvotes
Outside of Vancouver
Mars2012 wrote: The house has been on the market for almost a year and they haven't budged on price...what makes you think they'll consider your lowball offer? They're obviously not in any hurry to sell.
Who knows.. lol.. doesnt hurt me either way.. as i mentioned im not in a panic to buy a place so my options right now are:

Lowball and insult the seller
Wait another couple months, and then lowball

reason i think they might consider, is because they have switched realtors, and it seems like the guy is going through a Divorce. ( I chatted with the owner while there looking at the house)
Shut your Mouth when you speak to me.
Deal Expert
User avatar
Mar 23, 2009
22529 posts
8939 upvotes
Toronto
I am also curious how you came up with that number.

If the $20000 work is done by you, how much to pay a contractor, $50000? How much are up-to-date good-condition comparable homes going for? ie. If other homes in the area that in great condition are going for $460000, and to get this one up to snuff by a contractor would be $50000, then maybe a fair price for this house might be closer to $410000, which is roughly 7% under asking. If you offer $370000, that's 16% under asking, and 10% under fair price.

If you offered that to me, I'd probably just ignore you, or counter at say $10000 lower than asking. Mind you I wouldn't have priced it so high in the first place.

As for the assessment, not sure if it's the same there, but the assessments here done by the city for detached homes are often behind by several years (which nobody complains about because it means lower taxes).

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