Who's low-balled on a house?

Just a curiosity question here. I've lowballed on cars and guitars, been showed the door or walked out the door with a car or guitar in my hand. Who's done it with a house?

For context, we looked at a house the other day and kept coming up with it being worth about $240k. They're asking $300k. The realtor who showed us the house (works at the same small agency as the selling agent) said she thought it was worth about $270k. The lot itself is probably worth $220-$250k, and I think the house is a tear-down within the next 10 years. I'm not even considering making an offer, because while I think it is worth about $240k, it still isn't some place that we'd really want to live no matter the price--I'm just kinda curious about what we could get away with.

Make the offer, I've done it before and even bought one that way. The key is to engage the negotiation rapidly and be willing to rescind the offer when it falls apart (within 24-48hrs). You can put in some clear communication on how long the offer is valid.

I've low balled before... several times actually. Sometimes it results in a productive negotiation, other times the seller does not even respond.

It all depends how delusional the seller is...

In the end the house will sell for the value it appraises. Most lenders will not finance and a buyer would be unwise to pay a value over the appraisal.

Don't forget the demolition costs.

SVreX wrote: Don't forget the demolition costs.

Ah. That would make the house worth even less.

I did some more research, and I'm now not even sure the house is worth what I was thinking it was. I'd be curious to get an appraisal, but I'm not going to pay for one.

I lowballed once, but did not get the house. IIRC the house was about 170 ask, and the 8k gvmt tax credit had just ended, but the house had been listed at 170 for a long time while the credit was still available.

So I offered 135 (figured comps were at 160 ish, and the 8k deal was up, so that means 152, and then I took about 10% off to start negotiations). I also wasn't asking them to pay closing costs or any of the other silly tricks that they do to artificially drive the purchase price up. That was 2010.

They said no, and did not counter offer (they were probably a bit insulted from the 170 to 135 gap). I waited another 3-4 months before I stopped paying attention. I just checked zillow and apparently it sold 4 YEARS later at 151. Just inflation backwards from 2014 to 2010 puts the sold value of the house at 139k in 2010 dollars. I still think I was pretty close on my offer, but since it was so far from the seller in terms of percentage, they just couldn't say yes.

By the way, this was fun to look up on zillow and remember! I had to go back and check some old emails too. Long story short I think lowballing could be the right thing to do, but it is hard to do right. I would have been better off telling the selling agent that I was interested at 130-140, and asking the selling agent to not immediately tell the seller but rather call me if they ever got tired of holding onto it. At least that way I wouldn't have insulted them and we might have made a deal.

Clarendon Hills, IL - 1986. Guys asking $95,000 - I toss out $90,000 and counters at $94,750 - he is insulted. I go to $92,00 and he counters at $94,500.

I walk away only to see this area go crazy with tear downs and McMansions and estimate it would've been $275,000 by the late 1990's when I sold my ranch for $179,000 I bought in Downers Grove, IL for $91,500.

Robbie wrote: I lowballed once, but did not get the house. IIRC the house was about 170 ask, and the 8k gvmt tax credit had just ended, but the house had been listed at 170 for a long time while the credit was still available. So I offered 135 (figured comps were at 160 ish, and the 8k deal was up, so that means 152, and then I took about 10% off to start negotiations). I also wasn't asking them to pay closing costs or any of the other silly tricks that they do to artificially drive the purchase price up. That was 2010. They said no, and did not counter offer (they were probably a bit insulted from the 170 to 135 gap). I waited another 3-4 months before I stopped paying attention. I just checked zillow and apparently it sold 4 YEARS later at 151. Just inflation backwards from 2014 to 2010 puts the sold value of the house at 139k in 2010 dollars. I still think I was pretty close on my offer, but since it was so far from the seller in terms of percentage, they just couldn't say yes. By the way, this was fun to look up on zillow and remember! I had to go back and check some old emails too. Long story short I think lowballing could be the right thing to do, but it is hard to do right. I would have been better off telling the selling agent that I was interested at 130-140, and asking the selling agent to not immediately tell the seller but rather call me if they ever got tired of holding onto it. At least that way I wouldn't have insulted them and we might have made a deal.

Looking in Elmhurst, so you might know the area...

The house I'm looking at sold in 2011 for $177,000. At that time, the average price in Elmhurst was $301,000. Today, the average price is $365k, and they're asking $299,000. I personally think that this house has stayed the same vs. the rest of the town improving--the only things to improve are the garage (new 4 car garage!!) and the landscaping (meh). Ignoring those though, the house should be worth $214k according to the increase in average housing price. I'll throw in $15k for the garage to get to $230k. I'm just not seeing where they get the extra $60k.

yeah. unfortunately you might be dealing with a non-logical seller. We have one on our block who have been for sale for a couple years.

I think that is a good way to look at it though (your logic). Might even be useful to explain your logic to the seller when you are making the offer; seems like that might reduce the insult if they are at all logical about it anymore.

Are the taxes in-line with the rest of the area? The other thing that happens in IL is that seniors have stagnant property taxes. That means that some houses in my area are literally paying 25% of what they should be. When the house sells and the new owner is not over 65, the property tax will jump right back to match the neighborhood. Ouch.

Robbie wrote: yeah. unfortunately you might be dealing with a non-logical seller. We have one on our block who have been for sale for a couple years. I think that is a good way to look at it though (your logic). Might even be useful to explain your logic to the seller when you are making the offer; seems like that might reduce the insult if they are at all logical about it anymore. Are the taxes in-line with the rest of the area? The other thing that happens in IL is that seniors have stagnant property taxes. That means that some houses in my area are literally paying 25% of what they should be. When the house sells and the new owner is not over 65, the property tax will jump right back to match the neighborhood. Ouch.

I'm factoring taxes at what zillow says for the majority of the houses that we're looking at. But this house in particular is owned by young parents, so it should be similar to what our tax hit would be. Which is astronomical (the woman who helped us get pre-approved was in Detroit; she was sure she had miskeyed something to get the tax prices).

Elmhurst is like Hinsdale and Oak Brook. $$$$$$. Ask them about the late 1980's floods - how did this house do?

Datsun310Guy wrote: Elmhurst is like Hinsdale and Oak Brook. $$$$$$. Ask them about the late 1980's floods - how did this house do?

According to my wife, Elmhurst is full of normal people and Hinsdale is nothing but snobs. But I digress; I do like the town a lot and don't want to go any farther south.

The flooding issues, they all flood in the area we can afford (and don't forget about 2006(?)). Just need to make sure we have the sump pump, battery backup, and that we don't actually keep anything valuable down there. They're also installing a pumping station not too far away from the house.

bring this guy with.. he knows a guy that is an expert on houses that can take a look at it..

I've lowballed on a few houses and even ended up in contract on one. Seller accepted the offer but their bank didn't - they were trying to do a short sale so the bank had to approve the offers. They eventually got their price, but it took a while. I think it was over a year later by the time it sold. I'm glad we didn't get that house, actually.

I ended up buying at an online auction for what would have been a lowball offer.

Use Zillow price history for that house and use comps around that house. Home prices are nuts again in my area. $100k houses near downtown area are going for $350k+ now. Double sure but triple or quadruple? berkeley no!

I low balled on a place a few months ago. Old farmhouse that needed some work (prior termite infestation had done some damage and the place was just generally dated), but was in a killer location and had a ton of out buildings (read: infinite project car space with the additional possibility of producing a bit of income.)

On the market over a year, had come down in price a few times (rather substantially), asking price was $250k. Based on comparable properties listed at the time that lacked the out buildings but needed none of the work this place did, I offered $200k, which the agent didn't think was out of line. Seller seemed rather offended and wouldn't even counter, and I got a rather condescending email from their agent that really pissed me off at the time. In hindsight, I'm actually very glad it didnt work out. Haven't checked the listing in a few months to see if it's still for sale.

Looking at another place at the moment, which is again a bit of a fixer upper but to a much lesser degree, but that's another story and the price actually reflects the work needed. Might have my own thread on this one in the coming days.

We offered $190k on a listed price of $215k. The comps said it should be about $195... maybe. The yard was a lot smaller and a couple other things. We went back and forth and our final offer was $196k. They countered and we walked. Apparently they did not believe that it was our FINAL offer.

We went with new construction and moved in about 7 months later. Our agent looked it up and it was still on the market for $190k. They had to make the payments for 7 months and were now below our offer. They had moved out and had been making two house payments. Poor decision on their part.

I was lowballed when selling my condo last year. My agent warned me they were going to come in low, and so I countered relatively high. We went back and forth and were within 3K of each other and I was probably going to accept their last offer when the buyer's agent started sending me emails directly about how the buyers were good people or whatever. That pissed me off so I told my agent to tell him that we weren't going any lower. They met my price the next day. So I guess if you're going to do it, make sure your agent isn't a shiny happy person.

I missed two neat ones by not low balling. Someone else did, and got them.

Low ball. The worse that can happen is nothing.

This forum has taught me that people who lowball on houses are shrewd business people. People who lowball on Craiglist cars are jerks.

I low balled my current house. Seller wanted to sell it furnished, was a bit ambitious on their price. Furnishings were awful.

I offered 20% below ask and provided a spreadsheet clearly and concisely justifying my offer (comps, remodel needs like roof, etc).

House was a needy mess - basically an ugly duck (poorly re-muddled but lots of cosmetics mainly) but it's a brick ranch with basement which fetches a premium round here. Nobody else could see past the awful furnishings and finishes, so it didn't sell.

I stuck around and after about a month, we came up more than I wanted and seller came down 10% in an area that's been appreciating greatly.

It never hurts to ask, but the situation can come into play as well. If the house has been on the market for awhile the sellers are more likely to consider lower offers than if the house was just listed. I can see offering 10-20% less than asking price in some cases, but much more than that probably indicates that the 2 sides are too far apart.

Some would say I lowballed my house. I would says they I just really brought the money.

House was an estate situation (old people died) and the kids were now the owners of the house.
The house was on the market for 3 year ('08-'11, locally the worste and lowest of the housing crunch.)
Buyer #1 LOWBALLED the hell out of them with an offer of $200k. Originally listed at $350k then reduced to $299k.

I learned (through a combination of right place/right time and maybe a little ethics compromise) the details of this $200k offer which included a contingency of #1 buyer still having to sell his current home.
I was in a different situation so we put in a back up offer of the same $200k but stated we could close in 20 days. Based on our offer, #1 was given 30 days to complete the sale or it would go to us. In those 30 days #1 tried (really hard) to secure a second mortgage so as to not loose the deal. As was the new tone of the time (and may still be) he could not secure a second loan so the deal went to us.

Buyer #1 did all of the "beating up" of the sellers and we just walked in with the money.

This got me a 2450 sqft 1 story house on the 18th fairway of the only fully private country club in the county. The real humor of the story is that #1 was the then reigning President of the Country Club. Needless to say, we never received an invitation to join when we moved in (and I would not have joined anyway.)

In 89 while shopping for our first house, we found a really nice little place with a big garage and huge lot listed for $109k. Based on the area and what we thought it was really worth, we offered $89k. They didn't respond, and despite the fact that we really wanted it, we stuck to our price, and bought what turned out to be a better deal just around the corner for a little more than $100k. First house didn't sell, and was listed 1.5 yrs later for $89k. No idea what it sold for.

$200,000+ for what amounts to a lot with a pile of garbage roughly shaped like a house is preposterous. Be careful.