Submitting a Lowball Offer in the Calgary Real Estate Market
There are a lot of scenarios in the current real estate market where a seller may face one of the more frustrating scenarios in the sale of their home, and that's the lowball offer. Re/Max Canada recently ran a study where they polled their large database of Facebook followers, where they asked buyers what their buying and bidding strategy would look like, 75% of polled / voting users responded by saying that they would "bid low!"
While coming in low isn't always insulting, or unwarranted, there are many things you and your Calgary Real Estate Agent can do to make the chances of that offer come through with higher chances of success.
Here's a list of five things to keep in mind when making a lower offer on a home for sale in the Calgary real estate market.
1. Know and understand the Calgary market. Presently we're in a buyers market in Calgary, this means you're inherently facing less competition, seeing less multiple offer bids on homes, and therefore more negotiating power! While in a sellers market, you have a higher demand for homes, especially ones that are priced accurately, and face stiffer competition as a buyer. Work closely with your local Calgary REALTOR® to truly determine whether the home you're looking to make an offer on is priced correctly. Just because a home is listed at a certain price, a comparative market analysis might offer a more clear and concise picture on what homes in the area have sold for in recent times, allowing you to act accordingly!
2. How many days on the market? How long has the home you've got your eye on, been on the market for? As a home goes from sitting days, to weeks, to months on the market, the sellers desperation could slowly start to grow, and depending on their personal situation the seller potentially could be more open to accepting a lower offer than asking. There are other factors to consider when looking at a homes days on market, the condition of the home could drive it to be there longer, it's pricing in comparison to other comparable properties, or the seller could simply be stubborn and unwilling move on their price as their motivations to sell could be limited.
3. Knowing and understanding the seller. If your Calgary real estate agent is able to get insight into the sellers motivations for selling, you are better posed in crafting your offer against their situation. For example, finding out a seller has already purchased another home, means that they're facing two mortgage payments, two utility bills, two insurance bills, etc the property could be paid off or inherited meaning the sellers are less likely to be looking for maximum profits on the sale. All these factors drive the end result, which is how much you can get the home for, knowledge is power in negotiations and your agent should be willing to ask these questions to gain a competitive edge for you.
4. Sweetening a lower offer with a pristine and clean offer. Consider this, a quick, painless, sale could be the exact remedy a seller is seeking. Offers with lengthy conditions, complicated conditions (i.e. you having to sell your house first) or multiple conditions (financing, inspections, etc) are all blockades and could ultimately keep the home on the market for weeks. Coming in ultra prepared, or in a stable financial position can really make the difference, we consistently see offers accepted for lower amounts than competing bids, simply because those offers are stronger in every other way.
5. Go low, but don't insult the sellers. If you're prepared to put an offer for 20% off asking price, knowing the home is only priced a few thousand off it's fair market value price, you're ultimately running the risk of annoying the sellers and making your unreasonable offer the last offer they consider from you. In some situations, a really low initial offer will actually hurt your position as the sellers can sometimes dig their heels in deep and instead of negotiating based on merit and numbers, they'll negotiate based on the negative emotions they felt from the initial offer.
Consult with a Real Estate Partner Real Estate Agent with Re/Max First today by calling 587-578-7653 and setting up a strategy call to determine the best negotiation methods for your current real estate needs!
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Listing information last updated on October 22nd, 2020 at 9:30am CDT.