real estate

7 ways homebuyers overpay

Lowball offer backfires
Lowball offer backfires © Olivier Le Queinec - Fotolia.com

Unless the property has been sitting on the market for months or more without so much as a nibble, most real estate agents advise buyers against making lowball offers, which are substantially below the asking price. The reasoning is that lowball offers really aren't offers at all because sellers either don't take them seriously or see them as an insult.

"Aside from the strong possibility of losing out to a higher bidder, the big risk is starting off on the wrong foot with the seller," says Bill Golden, an independent Realtor with Re/Max in Atlanta. "If the seller gets insulted, or feels that yours is not a serious offer, they are less likely to respond with a reasonable counteroffer, and you've basically shot yourself in the foot."

While that doesn't mean the deal is dead, it can mean that the seller will be reluctant to negotiate when the buyer makes a serious offer. By starting off with a respectful offer, even if it's below the asking price, Golden says buyers create an opening to adjust the price downward as the deal moves toward closing.

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