With property values dropping and many owners desperate to sell, buyers may think that this is a good time to make lowball offers.  While some may find a seller anxious enough to consider or accept a lowball offer, many sellers find these offers to be a waste of their time, and simply too unreasonable for them to entertain them.  A lot of properties are already listed a below market value prices as they are, and bringing an offer that is extremely low my upset the seller, not to mention waste the agents’ and principals’ time.

 Here are 5 common lowball offer mistakes buyers and their agents routinely make:

Not Calling the Listing Agent

The listing agent can provide invaluable information that will help you to write the offer in such a way that the seller is likely to accept it. If your agent doesn't call the listing agent first, for all you know, that home might already be sold. Always call to find out how many offers the agent has received, and to help determine a fair price for both buyer and seller.

Submitting a Lowball Offer With a Low Deposit

Earnest money deposits typically vary anywhere from $1,000 to 3% of the sales price. If a buyer submits an offer way below list price and sends along a low earnest money deposit, it makes the buyer appear as though the buyer is living paycheck to paycheck or is not willing, ready and able to complete the purchase.

A strong deposit shows the seller that you are serious about the purchase, and have the means to complete the transaction.

Submitting a Lowball Offer With A Plea For Acceptance

Sellers don't want to read a hardship letter from a buyer and don't particularly care if a buyer has fallen in love with a home the buyer cannot afford. Banks are even less forgiving, especially if the home is listed as a short sale or a foreclosure.

The seller may be going thru his/her own difficult situation and may not care about the buyer just having to have their house.  If a buyer wants the home bad enough, they will pay a fair price for it.  Plus, telling a seller that a buyer doesn't qualify to pay list price sends a signal that the buyer should be writing offers on other homes that fit that buyer's price range and not this one. It makes the buyer appear weak and uninformed.

Submitting a Lowball Offer With Fake Comparable Sales

Unless the home is ridiculously overpriced, the listing agent has already pulled comparable sales to support the sales price before putting the home on the market. Sending the listing agent a list of sales from another area insults the agent's intelligence and suggests that the agent is incompetent.

It also shows that the buyer's agent does not know the neighborhood nor its surrounding properties. Ideally, a buyer's agent wants to win the listing agent's cooperation, not alienate the listing agent.

Submitting a Lowball Offer With Concession Requests or Unreasonable Contingencies

If it's not bad enough to irritate the seller with a lowball offer, some buyer's agents toss in concessions on top of an already low price. Some ask for a closing cost credit, totaling 3% to 6% of the sales price. Or they ask the seller to carry the financing on a land contract. 

Others submit offers with contingencies such as having to sell their current property or asking for a long escrow period.  Some contingencies are expected, such as getting final loan approval and the buyers’ approving inspections, but a seller who receives a lowball offer will not be too keen on having to jump through more hoops to get their home sold.

Some sellers are willing to give a cash credit to buyers, but generally refuse to do so on a lowball offer.