Usually, the lowball season is limited to the 4th quarter each year. With the excess inventory today, some buyers will be attempting to get a deal now.
Buyers – Where do you start? Getting a deal on a fixer can be counterproductive because of the time and money needed to get it back in shape – and you end up with a retail investment that dominated your life. But if it’s in a superior location, it might be worth it.
The market is healthy enough that the creampuffs are going to get good or great offers from the less-informed. If you like the home and don’t mind paying retail, then battle it out and maybe you will get lucky and be able to shave a couple of bucks off the list price.
But if you want to lowball, the best chance of getting a deal is on the aged listings – those that have been on the market for more than 30 days.
- The best sign of a motivated seller is one that has already lowered their price. They are aware that their pricing isn’t working, and might be more receptive/motivated to listen to your lower offer.
- Pick on vacant houses, especially those with a hefty mortgage.
- Offer a quick close, and other sweeteners to offset your low price.
It’s likely that you will have to make several offers before landing one, but if you have the time, go ahead. The hope of holding out for a superior property will likely out-weigh your willingness to risk it all on one that might seem discounted today.
Sellers – Are you kicking yourself for not selling when rates were 3%? Why? Pricing is BETTER today than it was in 1Q22, the peak of the covid frenzy.
But let’s say a buyer is willing to cash you out in three weeks, but only if you knock 10% off your list price. If your home has been on the market for more than 30 days, we already know that the price is at least 5% too high, so the 10% discount is only slightly under market – and it could be retail by the end of the year.
Nobody is asking you to go back to 2021 pricing (and that pricing sounded fantastic in 2021, just four short years ago). At worst, the buyer is asking you to go back to 2023 pricing when there was a little dip.
You really ought to consider it.
Oh, ok you want to hold out for the extra couple of percentage points? You will need lower rates and/or less competition, and neither of those are likely this year or next. Yes, Trump will replace Powell in May, 2026 and rates might go down to 6% or less. But the likelihood of 1-2 of your neighbors taking a lowball offer is high, and their reset of the comps will thwart any future benefit of slightly lower rates.
Somebody in your neighborhood is going to take a lower offer. It might as well be you. Sell for less now, or sell for less later – your choice.
It’s just money!
The Fed chose to not lower rates again today. I wonder if they’ve “got” Trump yet?
No big deal inflation will keep going down to the point of diminishing returns.
Trump should supercharge the SBA (Small Business Administration) giving loans out to anyone that wants to start a business. Become the Fed by loaning directly to American citizens cutting banks out of the equasion.