Bargain-oriented buyers should also plan to make offers
on several homes, says Irwin. An investor who makes
lowball offers on 10 houses is more likely to find a
willing seller than one who pursues only one or two
That said, Irwin doesn't see much point
in making wildly underpriced offers. They're rarely
When you see a great-looking house in a real estate
circular, you might be tempted to call the agent listed
by the photo. That could be a mistake.
"A lot of buyers think that 'If I
call the listing agent, I'll get a better deal.' That's
not true," said Bob Wilson, an agent with the Guiltinan
Group in San Diego County. Because listing agents
have a duty to get the best possible price for the seller,
they're not suitable advisers for crafting a lowball
Buyers need someone to represent their
interests. Typically, that person is a buyer's agent,
who researches listings exclusively for a home seeker.
When a purchase closes, the buyer's agent normally splits
the sales commission with the seller's Realtor. In most
states the buyer's agent is required to deal with the
seller honestly but, unlike the listing agent, is under
no obligation to get the highest possible price for
A good buyer's agent earns much more than
the 2 percent to 3 percent commission, says Glink. That's
because buyers don't have the deep knowledge of neighborhoods,
comparable homes and current prices of an experienced
"Your agent is more than just someone
who drives you around," says Glink. "Your
agent is supposed to be your eyes and your ears, helping
you sift through what information is valuable or not
when constructing an offer."
for motivated sellers
The more desperate homeowners are to sell, the more
likely they are to accept discounted offers. Therefore,
bargain hunters should be on the lookout for homeowners
anxious to unload their properties.
One strategy that broker Chris Edwards
of Raleigh, N.C., recommends is to look for listings
that have been on the market longer than normal. In
Edwards' market, a well-kept home in a good neighborhood
typically sells within a month. Sellers with homes on
the market two months or more are probably more receptive
to lower offers.
Another tactic Wilson suggests is to keep
watch for announcements of large-scale company layoffs,
closures or relocations. In the months to follow, large
numbers of affected employees are likely to be selling
their homes. This could provide a buying opportunity.
This strategy works best for people with some experience
in real-estate investing. The basic premise: If you
offer a lower price than sellers expect, you need to
give them a reason to take your offer.
Darragh's favorite incentives include
offering to close quickly, to pay in cash and to attach
few contingencies to completing the deal. Such offers,
he says, are particularly attractive to homeowners under
duress, who might be facing foreclosure, struggling
with debt or forced to relocate.
fixate on list price
The true value of a home might not be reflected in its
listed price. A property's listed price simply reflects
what a seller hopes to get, usually based at least in
part on selling prices of similar homes.
Glink cautions buyers against taking too
much glee in getting a property substantially below
list. In some cases, initial list prices are so inflated
that even a buyer who negotiates a substantial discount
"It's no indication of what you should
pay," says Irwin. "You have to do your own
Joanna Glasner is a freelance writer
based in Northern California.