I think it really depends on the market and how long the house has been for sale. We have sold our weekend lake home and have been looking at properties to "replace" it for about a year. It's not unusual for some of these places to be $250k overpriced. Something originally listed for $799k sells for $550k. So in my case a lowball offer would probably be $100k less in this price range. However some houses are priced closer to market value in my opinion in which case a lowball offer might be $50k less on a property around 450k to 550k.

If I was selling I'd expect people to try to negotiate a 20% reduction assuming an average market and not a hot one.

Here in Charlotte, NC, the avg. sales price is about 4% off of the asking price. Assuming the home is properly priced. I would think anything too far off of that as a lowball offer.

But, in reality, the decision of what constitutes a lowball offer is up to the seller, and their perceptions.

Thanks for the comments. Makes sense!

Clearly the sellers were not concerned that the list price would be insulting to buyers :)

LOL! dadereni - so true!!! We're watching a listing now, started at $600k and is down to $375k but I bet they won't sell near that either. There is information in the listing that, if I'm being kind, is very misleading about the property.

One that doesn't get accepted. Seriously, I've had a few times now that I saw later that the seller accepted an offer that was way under asking price (and even comps) and which I would have gladly paid, too. I just had thought that the asking price was so high that there would never be an agreement, so I never bothered to make an offer.

I think intention plays a part, too. If someone offers $35k less than the asking price, when they would be willing to pay up to $5k below asking, for example, then I would consider that a low ball offer. They are trying to buy the house for much less than they think it is worth, and what they would be willing to pay.

If you think the house listed at $450k is worth $400 to you, then you are simply offering what you are willing to pay, or close to that amount. Insulting to the seller (from their perspective) or not, that is simply your offer for their house. I would not consider that a low ball offer, especially if the comps are closer to your offer amount.

But what if the comps don't reflect what you feel is a realistic assessment of the property based on your ability to see and quantify needed work? I'm not talking about paint and appliances, but more serious issues. As an example; my husband has been in the renovation/remodeling/building business for 28 years so we don't need a 3rd party inspector to tell us the windows are past their useful life, or the roof has at best another 5 years or that there are gutter/drainage issues that will need to be addressed, etc. We see houses all the time that need substantial work that we would be willing to take on - IF - the property was priced to reflect that but most people don't look at things that way. The roof may not leak at the moment and the seepage in the basement doesn't bother them and the windows open and close so everything in their eyes is fine and they price their house for top $ in their comp range. Our potential offer would seem to be a low ball no matter what justification we submit with it because it doesn't reflect their belief of the house! I don't want to play inspection games - dinging down the price from the initial offer because of this issue or that.....but want to go in with a realistic offer from the start.

I'm no RE expert but my house is up for sale. It was on the market 4 days and got 3 offers. One of them I considered "low ball" but our agent did not.

I think if I had known *why* this person made the low offer I may have looked at it differently. If they had said "look we are making this offer because we believe the drive needs to be redone immediately, plus some windows need replacement..." I might have said "yes, that's true" and countered with something. As it happened we had two other offers, one more one a bit less than full price. So when they heard that they made a full price offer which we did not take.

Now that we are in the inspection period, I am looking at doing something with the drive and the two windows! That "low ball" offer is looking better. But they didn't tell us why...they just came in the lowest with no explanation so that hurt them both on that offer and their subsequent one. We were suspicious that now they want to pay full price for the house they wanted at a 8% discount the day before.

It's a dance. I hate it but some people thrive on it. I just want to get this place sold so I can move on.

The other thing - all the homes in this neighborhood were built within a couple years of each other, and were roughly in the same range price wise. So they all have the same issues that time brings. They all got new roofs during the hail storms of 2007 and 2008, they all have 20 year old windows, etc. So comps are pretty easy. Not every neighborhood is like that and many people overestimate the value of the home they have for sale.

" It's a dance. I hate it but some people thrive on it."

So true!

So here's an idea - ask your Realtor to ask the seller's Realtor for the comps on how they came up with that price. Whether or not you think it is fair or overpriced, it's still going to have to appraise. And if you still don't get a satisfactory answer, put in the contract that if the property does not appraise for the contract price (or within $xxx), then the seller will pay for the appraisal (usually a buyer expense, so it will be money out of pocket if they can't get the loan).

Thanks everyone! It is a relocation property so the seller has 10 days to try to get their top dollar. After that a middleman corporation takes over and from what we were told by our realtor, the price will likely significantly drop. We are waiting and seeing and looking at other homes in the meantime.

karin-
I think, based on those circumstances, that you have just given yourself the best advice available!

What someone is asking for their house has nothing to do with what it's worth. They can ask whatever they want. A good Realtor would pull comps for you, so you can offer a price you can justify. (When they pull comps, also have them print the photo galleries of the sold homes, so you can see if they've been updated. Then do a google map birdseye view to check for what is near each home...ie, does a factory sit behind it, so it would make it undesirable, and therefore sell for less? Or does it have a great unobstructed view, making it worth more? On a busy street? Deduct.

I am a Realtor and my husband and I buy houses to live in for a year or two then flip. If I lowball something, you can be sure I've done my research, and can justify the offer. I usually include a cover letter with my offers explaining the reason for the price I'm offering, and printouts of recently sold comps to show what I am basing it on.

If you piss off a seller by offering a lowball price, because you are ignorant of the value, then chances are the seller will just not negotiate with you.

Best advice here: Base your offer on the comps.

Second best advice here: Communicate with the seller WHY you're making this offer.

Example: We're kicking around the idea of making an offer on a lot. I'll simiplify the whole thought process, but two are available. They're catty-cornered across the street from one another, and we like both -- but for different reasons. We're not decided yet, but we're assembling our thoughts on what we'd offer for each lot:

If we go for the less expensive lot, we'd make an offer of about 95% of the asking price. Snooping through some public records (so easy online), I know that the current owners, who appear to be a mother and daughter, bought the property less than a year ago. The price they're asking is almost identical to the county's tax assessment. Other lots that've sold in this neighborhood have sold for roughly this same price over the last couple years. The lot has been on the market only a few months. I'd offer slightly less just because -- as someone else said above -- it's a dance, and you always try to get a slightly better price, but they're already starting at a decent price.

If we go for the more expensive lot, we'd go with a lowball offer. Our online snooping shows us that a now 65-year old couple bought this lot in 1995, and they now live in another part of the state. My guess is that they bought with intentions of building, but then "life happened" and they're established elsewhere ... now they're retiring and have decided this lot just isn't for them. They put the lot on the market two years ago for almost double what the county says these lots are worth; they've reduced the price twice since then, but this lot is still 50% more expensive than the one right across the street. My guess is that they based their asking price on nothing more than a wish. The lot has some negatives: It has a moderate slant towards the road, which will make building more expensive. The back of the house faces North, which is less than ideal for the pool we plan to build. It is heavily wooded, meaning that we'd have to pay to clear it. This couple did not pay to "tap into" city water when it came through a decade ago, meaning we'd have to pay a large cost now to do it. If we make an offer on this lot, the circumstances are different: We'd offer what the lot across the street is asking -- and we'd detail why. Hopefully these carefully ennumerated reasons would help them realize that their asking price isn't realistic, and they'd be wise to go ahead and accept our offer. And, the two biggest details of all: If we offer on this lot and are rejected, the less-expensive lot is still sitting there waiting for us. And we'd be perfectly happy to walk away from both lots. If I bought one of them TODAY, I still couldn't start my building project for another year, so I'm not going to be upset by hearing NO.

IMO, if it is overpriced, then a fair market value offer is not a lowball offer.

I agree ncrg but - big but - if the owners think their asking price is reasonable, they'll think it's a lowball offer. You, as a reasonable realtor who knows the market and Mrspete as an educated buyer who has done her homework have a better handle on reality, but to the seller, sometimes perception is everything and they'll likely perceive the offer as a low ball. Which doesn't mean not to make that offer, just to be aware going in. We can talk all we want about getting the emotion out of this transaction, but we all know that's often easier said than done for the seller and/or the buyer. Personally, I couldn't make an offer on a house or lot that didn't resonate with me on an emotional level - it's going to be my home and my emotions get tied up in my home! So my head knows the game to play but emotions will be in the mix as well - I'll just try to keep them under wraps.