The art of the lowball

What is the best way to lowball? I'm In a super-depressed market and the sellers asking prices haven't caught up with reality.

If a place is asking 450 and its worth 370...what is the best way to get the deal? This is kinda crucial as buying at 450 would be suicidal...

So, how is the best way to do this? I've tried lowballing a couple of times and I've been laughed off. I'm pretty sure my valuations are correct as ive been watching the market like a hawk for 2 years. Clearly i need to get up to speed on negotiation as I'm obviously doing it wrong...

Would really appreciate some advice...

 

I would just persist - and slowly. I would also try to explain to the rea's that you've been watching the market and tell them how you know that prices need to go down. Get feedback from them, consider it and then go again. Eventually you will come across that vendor who will be the first one to see reason.
Make an offer once and leave it at that. If it's knocked back, look at another one.
Walk away and come back later. If the market really is down, those properties aren't going anywhere.

 

Is it really low balling though? MV is what you are willing to pay.

 

The offering price versus the asking price is much lower so from the agents perspective this is low balling.

 

You need to have an understanding of what the vendors requirements, be able to provide information justifying your offer and a willing and able real estate agent to assist.

 

Agreed. It may be they purchased at the peak of the market, and want to break even.

 

And if the people aren't in the position that they need to sell you will have no hope in low balling. This happens a lot with holiday houses. Some houses sit on the market for 2 years with a price drop of 5k

 

Do you have a broker? If so ask them to do up a property report for you - you can find out what it sold for last time which can give you some insight into the sellers circumstances if the agent isn't willing to tell you.

 

In this situation it may be worthwhile getting an upfront or desktop valuation to see if your perception is correct. You can then use that as evidence with your offer if it supports your claim.
Offering under the listing price is hard, especially when its 15% under but sometimes it works - it is a rarity though. If you aren't emotionally involved in what you end up getting a yes on keep trying.
Always be polite, include a letter with your offer explaining why you have offered and comparable sales and/or valuation to back up your claim so that REAs and Sellers can see you aren't just a rude tyre kicker.

 

Like others have said, have some evidence as to why you think a property is worth $XXX (this includes satisfying your own knowledge). Also think of it this way, all you need is one low ball offer to be accepted and it's worth it.

Good luck.

 

Another way to make it more attractive is to have great terms, for eg, short settlement, no finance/B&P (get it sorted first). If they know you're serious and the property has been on the market for ages, they might look twice where they otherwise wouldn't.

 

Offer whatever you want but be prepared to lose it if someone else comes in higher. Over time, if the agent is good, they should be educating their seller based on the feedback from the market.

 

Is this Darwin? How do you know it's the bottom of the market?

 

Is the lowball what it's really worth (ie, similar sale) - or what you are prepared to pay for it? If it's a true value, how do you prove this - to both yourself and the vendor?

An important lesson is - that as a buyer or vendor - what you would like to pay or get mean nothing. The value is what anyone in the market is prepared to pay ... something I am yet to educate hubby on when he wants to go against the grain.

 

Make an offer close to what they are asking with a 24 month settlement. When that gets knocked back give them a little less for a 12 month settlement. Then the real offer after that. Having a dialogue will help the agent condition the buyer to the new market value.

 

Hammer ....low balling is a numbers game...you have to put in something like 50-100 offers to get a result.

It is time consuming...but the rewards are great.

I see you are Darwin...this market as well as Perth is ideal for this at the moment..in 6-12 months it may change.

 

This is good.
Failing that, offer them even less for a short settlement subject to a forensic building inspection.

 

What's the next course of action if they decide to accept the next to asking price offer with 24 month settlement?

I'm with Sash on this... low balling is a numbers game.

 

Just curious how long has this market been depressed?? If its relatively short period you may find it will continue to slip/slide, what you may think is a bargain today can be a loss tomorrow, falling/depressed markets can go on for 7 years+ . Just my opinion.

MTR

 

Which is highly likely for Darwin.
It's in the same boat as Perth, no growth for for probably the next half decade or more.