4 Reasons You Don’t Want to Lowball Your Offer
If you are in the market to buy or sell a home, chances are you have heard the news about the rising housing prices. The need to negotiate a “good deal” goes way back in our culture and for some, it is such a strong need that it eventually costs them the “good deal.” Here are4 very good reasons you don’t want to lowball your offer in our market conditions today:
1.) Property Values – Projected to Increase 20 percent: a recent study of property values indicate that prices have gone up 32 percent on average. Further studies of that data, shows us that if the market continues in an upward trend as projected it will, property values could increase another 20 percent in the next twelve months. If you own a home, this is great news for you. However, if you own a home and want to buy up, the "good deal" could mean you pay 20 percent or more for your next purchase.
2.) The “Not-in-a-Hurry” syndrome: this is a condition, where buyers and sellers think they are not in a hurry, therefore, they have time to kick the tires and smell the roses before getting serious about buying a home. In my experience, those who suffer from this condition, end up being the buyers and sellers who want to make lowball offers on every house they see. Unfortunately, because of this “we aren’t in a hurry” attitude, they often times miss out on the perfect house because they insist on making unrealistic offers.
3.) Foreclose Sale vs. Traditional Sale: in the recent few years, the majority of homes on the market were foreclosures. In those sales, it was easy to make a lowball offer with the idea the seller or bank, was desperate to unload the asset. In some cases, this strategy worked great. Now that we are transitioning back into a market dominated by traditional sellers, the non-emotional transaction is becoming a thing of the past. If you lowball a “real” seller (not the bank) you now have to deal with the seller’s personal attachment to their home, or in other words, their feelings. If you lowball a traditional seller, you run the risk of offending them which will result in a rejected offer.
4.) Law of Supply and Demand: we learned about the law of supply and demand in grammar school and it still applies today in the real estate market. Across the U.S. we are dealing with a housing shortage – Arizona is no exception. There simply aren’t enough available homes on the market to keep up with the growing demand of homebuyers. Many homes that come onto the market receive multiple offers within a few days. Buyers who want to make lowball offers, will find themselves missing out every time. With the high demand and low supply, properties are selling at market value if not more.
It is a great time to buy or sell a home in our market, even if that means you don't write lowball offers. Call the Russo Team today and we’ll help you negotiate a “good deal.” Frank
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