Situations When Making an Offer Below Asking Is Okay
In 2017-18, many sellers were pricing their homes lower in the midst of a red-hot market to ignite a bidding war, ultimately leading to the home selling for well above the asking price. Some buyers saw this as disingenuous — and a bit greedy. That said, there are situations where a seller might just be asking too much or would be willing to part with the home for less. In these cases, it’s perfectly reasonable for buyers to make an offer below asking without it being considered “lowballing.”
The house is overpriced
When you go to view a house and what you see doesn’t match up with the price, it’s reasonable to make a lower offer. If everyone can plainly see that house is overpriced, your lower offer might be accepted. To confirm your suspicions, look at what similar homes in the neighbourhood are priced at and gauge it from there.
Some sellers will make upgrades to increase their asking price, but not all upgrades are worth a huge increase, so don’t be tricked. Try a lower offer and see what happens.
The seller must sell fast
In some situations, the seller has to sell quickly in order to move themselves. In these cases, the seller might be willing to let it go for less because they don’t have time to wait for a better offer to come in. You could score a great deal on a house by taking the chance that your lower offer will be accepted.
You have time and aren’t desperate
If you find a house that you like but aren’t completely in love with, feel free to make a lower offer. If you’re not picky about where you live and you’re willing to try, put in an offer lower than asking price to see what happens.
Worst case scenario is the seller will reject your offer, and you’ll move on to a different property; best case scenario is they accept it and you’ll get a pretty decent place for a good price.
If you’re not desperate for a new house, or picky about where you move, why not just take a chance?
The house is outdated
If you’re looking at a real fixer-upper, the asking price might not be worth what you get. If the house has been on and off the market for a while, and the owners haven’t made an effort to update it in any way, you might get lucky if you put in a lower offer.
If the seller is fed up with the home not budging, they might concede and accept a lower offer just to move on.
The bottom line here is that paying the asking price (or over asking price) can sometimes be a sucker’s move. Don’t become house poor or buy a lemon just because a home is priced high. Take a chance and put in a lower offer. However, be reasonable with your offer. If you go too low, you’ll likely be rejected. Get good advice from your realtor, and stay within your budget.