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How Low Is too Low When Making an Offer?

October 20, 2014

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So, you’ve finally found that perfect home. It’s everything you want in a vacation home, investment property, or dream home – but it’s too overpriced. Do you wait for the price to fall? If you do wait, will you lose it? Should you just write a low offer? If so, how low is too low?

This is a tricky scenario for any buyer to be in – but there’s a solution. Talk to your agent and have them ask the seller’s agent the following questions to gauge how low of an offer you can submit without being rejected:
  1. How did you determine the asking price of the property? Knowing whether the agent or the buyer set the price will provide some key clues to how appropriate the list price is.
  2. Can you send me the comparable homes you used when pricing the home originally? This question will help justify the price the seller is asking for.
  3. Was the home appraised in the last six months? If so, ask them to share the report. Most sellers will say their home has been appraised, but when you ask when, it was typically more than six months ago. You can’t trust an appraisal that hasn’t been done within half of a year.
  4. Have there been any major improvements made to the home that might affect the home price? Sometimes there have been substantial improvements made to a home that aren’t made evident on the MLS. These are always worth asking about because they can typically be negotiated.
  5. What is the ideal settlement date for your sellers? This question will provide you insight into the seller’s motivations, which may give you leverage when it’s time to negotiate.
These questions will help you determine how low you can go when making an offer. If you need help figuring out what to include in your offer, or any of the many other nuances involved, don’t hesitate to reach out to us. We’d love to help you get that perfect home for a price you can afford!
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