Tracking “lowball offers” is something that can really demonstrate how the real estate market is performing. In a market where prices hit all time lows and buyers were finding “steals,” lowball offers had become fairly common. However, as the market has begun to shift in the right direction, the number of these lowball offers seems to be dwindling. To better understand, we must first know a few things.
A lowball offer:
- Typically involves a contract submitted to the seller where the offer price is 25 percent or more below the list price
- Lowball offers increase sharply when inventory supply exceeds demand in a particular area, especially in areas where home values are depressed
- Lowball offers are a buyers way of trying to get the price they want on the initial offer
According to a survey from the National Association of Realtors (NAR), “A year ago…one out of 10 members surveyed in a monthly poll complained about lowball offers on houses listed for sale.” A survey in March of 2012 yielded different results. This survey, which sampled 4,500 agents and brokers nationwide, found that there were hardly any complaints of lowball offers. Rather, there were more comments about declining inventory levels and multiple offers on well-priced listings.
These survey results imply that lowball offers may not longer be a smart strategy for those looking to buy. As the market continues to get back on track, competition for properties will continue to increase. Buyers that come in with lowball offers will often see their offer pushed to the back of the line — offers are countered by the seller to a value closer to the original list price or the lowball offer is rejected altogether.
As we see an increased number of homes hit the market at more reasonable prices, the chances that a lowball offer is going to work will continue to slim. When buyers come in with a lowball offer, they risk missing out on a chance at the property. In a market that has rebounded from the recession, multiple offers on property will be the norm — not lowball offers.
If you have interest in property on Florida’s Gulf Coast, please click here, Southwest Florida Real Estate For Sale. For more information on a specific property, please contact Jim Mulligan, Suncoasteam Realty at 941-235-7474 or firstname.lastname@example.org.