Even in the current buyer’s market, low-ball offers are difficult to pull off.
With Sydney’s housing market starting to weaken a lot of people are likely to be trying their luck with low-ball offers. And why not? No one wants to pay more than they have to.
But I suspect getting a vendor to part with their home at well-below their intended price isn’t easy, regardless of how much of a buyer’s market it might be.
The other problem with putting in too low an offer is that it can often ruin your shot at getting the home, especially if the sellers end up feeling insulted or the agent takes the excessively low offer as a sign you’re not a serious buyer.
Putting in low-ball offers is more an art than a science.
The critical thing is to justify the amount you’re offering. Usually a look at comparative sales can be useful for this.
It’s useful keeping in mind too that property prices across much of Sydney have been falling in recent times — an average of 8.6 per cent over the past year, according to CoreLogic — but the falls have not been spread evenly across housing types.
Detached house prices have been falling at a faster rate than unit prices and homes at the top end of the market have also dropped the fastest. The lowest priced homes have held their value.
This means the best strategies for putting in a low-ball offer will depend on the type of home on offer, where it is and what kind of condition it is in.
I suspect poorly presented properties with little advertising may be more fitting targets for the low-ball offer.
On the other hand, highly desirable homes aren’t good targets because there will likely be multiple other buyers interested and putting in that low-ball offer may ruin your chances of being considered a serious buyer.
One thing you shouldn’t do is be too forceful with the low offer, thinking going in hard on the negotiation might help you land a killer deal. Sellers can be emotional, too. They want to know their much loved home will end up in good hands.