HGTV's Married To Real Estate Explains Why Lowballing An Offer Is Smart
Finding the home of your dreams often means you'll do anything — sometimes even pay too high a price — to have the property. In recent years, that's been necessary with so many homes entering a bidding war of numerous offers from various interested buyers. Redfin data shows that, in June of 2022, almost 50% of home sales faced some type of competition with multiple offers. More interestingly, that's a much lower rate than was average in the previous two years. Limited homes for sale, low-interest rates, and the desire to move out of the city were some of the major trends in the 2022 real estate market influencing this bidding war and the associated price increases.
Things are beginning to change, though. For many people, now may be a good time to enter the market and make an offer under the asking price. Is lowballing an offer on a home you really want a smart thing to do, though? Could it cost you the dream home? It could, but HGTV star and real estate agent Egypt Sherrod believes that now is actually the right time to do just that.
Lowballing real estate now makes sense
In a recent episode of "Married to Real Estate," titled Farmhouse Fixer, Sherrod is working to help her clients, Stephanie and Justin, to buy a home they want to spend no more than $1.2 million on. They have a tall order, as they want a farmhouse with 50 acres of land just 45 minutes outside Atlanta, Georgia. When they find a home close to what they want, Sherrod recommends lowballing the price.
"We know they're at a million essentially right now," Sherrod says. "But, it has been on the market for a little bit. Do we want to try and come in a bit lower? I think there's room." The home buyers are in agreement with her decision. "We put in an offer for $935,000, and the seller countered with $950,000," Sherrod shares. "That's exactly what they wanted to pay." Core to the reasoning here is that the home has been for sale for some time, which may be due to the slowing of the local market. And, if that's the case, making a lower offer makes financial sense.
Should you bid under the asking price?
It made sense to lowball the home offer in this scenario since the current owners may have wanted to sell the home quickly and hadn't had any interest in it. However, doing that for the house you want could be worrisome if you don't want to miss out on the property of your dreams.
To know how much to offer when buying a home, work with your real estate agent to better understand the hyperlocal real estate market. Some markets could still be a seller's market, which means there's less room for negotiations on price. It's also important to be respectful of the seller and try to avoid very negative comments about the property, as they can refuse your offer if they're offended by it. If you plan to offer a lower offer on the home, be sure your home's financing is already in order and ready to go. For some sellers, a fast close can be an attractive reason to choose a lower price.