Posted on: 27 May 2017
When you find a house for sale that suits your needs but the listing price is more than you want to spend, one approach is to submit a low offer. Doing so can work out — for example, if the current owner is highly motivated to sell, you may be pleased to have your offer accepted. However, an offer that is extremely low is generally a bad idea for a number of reasons. Your real estate agent will always tell you how low your offer should be before it becomes a bad idea, and this advice is worth heeding. Here are some risks of submitting an offer that is too low on single family homes for sale.
The Seller Won't Negotiate With You
Sellers are humans, which means that they can be offended. Sometimes, a seller will be so annoyed with your overly low offer that he or she will not negotiate with you. Sellers may consider low-ball offers to be insulting, and may inform their agent that they won't be even responding to your low offer. Even worse, if you're really interested in the house and decide to submit a higher offer later on, the seller may opt to continue to ignore you.
The Negotiation Can Be More Difficult
No one wants a challenging negotiation when buying or selling a house, but an initial low-ball offer can lead to such a scenario. Some sellers may negotiate with you after your low offer, but will be less flexible with you because you've insulted them. In other cases, the seller may negotiate in good faith, but your low offer means that you'll have to go back and forth with offers and counteroffers several times before you reach a consensus. Or, in some cases, you'll never come to an agreement because your initial offer was so much lower than the house's asking price.
Any Other Offer Will Be More Appealing
Another problem with submitting a low offer is that if the seller receives another offer from another prospective buyer in the meantime, this offer will automatically become more appealing. This scenario can mean that the seller more aggressively negotiates with the buyer who has submitted the higher offer, while perhaps putting you and your offer on the back burner. The seller and other prospective buyer may come to an agreement quickly, whereas you'll be forced to continue your search for a new house — all because of your initial low offer.Share