In Minnesota, we are currently experiencing a buyer's market. There are many more homes for sale than buyers in the Twin Cities market right now.
As a Realtor working in the northeast metro, I can pinpoint homes in neighborhoods throughout Anoka and Chisago Counties that haven't sold after being on the market for several months. Communities north of the Forest Lake and Ham Lake areas that were booming a few years ago, like Stacy, Linwood and North Branch are experiencing a tremendous slow down. From Hugo to Lino Lakes, acreage properties and lake homes aren't exempt from the slowdown. There are hundreds of choices for first time buyers and move up buyers alike. Buyers looking in these markets have the upper hand and can offer anything right? So why not go in with a lowball offer and see where it goes?
My position on the subject of lowball offers hasn't changed with the market. It has been and always will be, "How much do you want the house?"
There are times where a low offer makes sense and times where it can blow up in the buyer's face. If you are willing to walk away from the home and there are several others homes you can go to, a low offer on a home could work for you. If this is your dream home and you have few options, listen up. It might be a mistake to go in too low.
Though a seller may desperately need a buyer and be willing to consider all offers, it was still their "home" with all of the emotions that go with it. They may have raised children there, worked the garden, put in the tile floors, redid the kitchen, etc. There are going to be emotions tied to the property and even after being on the market for months, a seller could be incredibly insulted by an extremely low offer. Insulted people can do irrational things, like not bothering to counter offer at all.
Now, I am not advocating paying full price on a home in a buyer's market. This IS the time to get a great deal on a home and some houses are incredibly overpriced. But if you really want a particular home, what do you do?
Work with your Realtor to figure out what the home is worth and write an offer that reflects that analysis. As an experienced agent, I work with my clients to find the right starting point for an offer that might not be accepted as written but doesn't offend the seller. Be prepared to discuss what needs to be done on the home with estimates for the repairs to justify the offer. As a skilled Realtor, I am able to present my clients' offer in a positive light so there will be a Win-Win negotiation for all parties involved.
There are times when the Lowball offer works:
- Corporate owned Relocation Homes
- Bank-owned Foreclosed Homes
- Investment homes used as Rentals
- Flipped Homes
In these cases, the sellers are business people. There is little or no emotional attachment to the property. It is all dollars and good sense. This is the perfect time for a "low ball" offer to see where their bottom line really is. Beware on the flipped home though. If it is a first flip and a labor of love, the owner may have developed some emotional ties to the property and they too could be offended by an extremely low offer. Even in a buyers market.
If you are relocating to Minnesota, are looking for Homes for Sale in the north and east Twin Cities metro area and need help from a professional Realtor, give me a call or visit my website for a FREE Relocation Packet. Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.
Copyright 2007 Teri Eckholm http://www.terieckholm.com/
If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me a call or visit my website for a FREE Relocation Packet or FREE Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota..JPG)
Buying a Home? Check out my HOME BUYER'S BLOG!
Copyright 2012 Teri Eckholm http://www.terieckholm.com/
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Teri, you sure write some great blogs! Some day when we have a local AR party, it will be great to meet you in person!
Victoria--I am very flattered and would be honored to meet you as well! Thank you!
Gary--I think this is one of the mistakes buyers make when going alone without an agent. Remember the emotions of the person on the other side is so important when putting in that offer!
Dan--That is an excellent point. Thank you for your comment.
In this buyers market, I too, discuss with my sellers that where they price there home is a starting point for negotiating but not to expect a full priced offer from buyers. And don't get upset...as a seller or buyer, your choices are the same: accept. reject or counter. Don't be too quick to reject any offer a buyers market. Review it fully and see if you can work with the other party.
I wrote this as a way to caution and educate buyers who might not be working with an agent. A good agent will advise both buyers and sellers to try and leave emotions at the door. But with a home, it can be difficult.
Michelle--Thank you for your comments. I too have had similar experiences. If someone really wants a specific home, they shouldn't necessarily pay the asking price but offer a reasonable price for the property. If you don't, even in a buyer's market, you risk losing the home to another buyer.
Teri, great blog :) congratz :)
buyer's market is awesome here :) I love it
Ray-- If you are loving the buyer's market, you must not be a listing agent AND have plenty of buyers! Good for you!! :) Thanks for the comments.
Teri,
I am not focusing on listings, if I get that's ok, but on this market it is good to represent the buyer :)
Hi Teri. Excellent point. Finding the magic formula to determine a fair price for a buyer that the seller won't be offended by takes some finesse. A low offer presented appropriately is key- thus the need for a qualified realtor such as yourself!