By Tali Wee of Zillow
Buying a home is an incredibly expensive purchase that all home shoppers hope to make with confidence. The best way for buyers to feel assured about their purchases is to get a great deal. So, house hunters should look for homes where they’ll get the most quality home for their money.
As the housing market recovers and home prices appreciate once again, it’s difficult for buyers to find affordable homes. Most markets are intensely competitive since inventory of for-sale homes remains low. Therefore, the current real estate market is a seller’s market.
House hunters looking to score homes below asking prices should watch for these five instances where sellers might entertain low offers.
1. When Listings Are Stale
In most cases, home shoppers completely overlook listings sitting on the market for numerous days. Even if properties fit all buyers’ criteria for their dream homes, the fact that no one has expressed interest tells buyers the properties are not wise purchases.
Maybe the home wasn’t staged properly for it’s first open house or perhaps the marketing photos exaggerated the spaciousness of the home. In any case, when a home doesn’t receive offers in a competitive market it indicates to buyers that something must be wrong with the home. Stale listings are nightmares for sellers. However, discouraged sellers become ideal opportunities for buyers to offer less than asking price.
2. When Comparable Homes are Much Cheaper
Another instance where home shoppers might gamble offering less than asking price is when homes are clearly overpriced. Part of a buyer’s due diligence is to understand the market value of properties. After months of reviewing home sale prices, buyers begin to understand the current value of homes. Then, they can judge fair pricing and justify paying costly mortgages for potentially the next 30 years.
For-sale homes should list at prices similar to the selling prices of comparable properties. If a buyer notices the home he or she plans to purchase is more expensive than properties in the same area, built about the same time, with similar lot sizes, square footage and number of bedrooms/bathrooms, then the house is likely overpriced.
When homes are priced competitively, multiple buyers make offers. Buyers sometimes engage in bidding wars where sale prices end up above asking prices. Overpriced homes receive fewer offers, so sellers might be motivated to accept slightly lower prices. When listings are overpriced and stale they are even better opportunities to risk making a low offer.
3. When Shoppers Are Unimpressed
House hunters should pay close attention to other shoppers at open houses. The quiet conversations between husbands and wives might indicate the overall competitiveness of a property. Are shoppers excited and interested? Or, are shoppers disappointed and complaining? Homebuyers should review properties with their own judgments first, checking off their lists of must-have qualities and then spend time watching for cues from other shoppers. If no one seems interested a property, the seller might not receive many offers, making it a good option for low offers.
4. When Properties Are Not Staged
In general, prospective buyers should avoid fixer-uppers that require loads of time, hard labor and money. However, house hunters should pay careful attention to the type of upgrades properties need. Homes requiring a few cosmetic improvements are great opportunities for buyers to make low offers. In many cases, sellers don’t have time to make upgrades, and proactive buyers can sometimes make minor updates during ownership for less than $10,000.
Busy or lazy sellers often leave chipping paint and overgrown landscaping on home exteriors and stained carpet or overcrowded layouts inside. These eyesores distract shoppers from the positive elements of properties, limiting the number of interested parties.
Additionally, shoppers should visit homes with poor-quality online marketing photos. Even though unprofessional images might make properties seem undesirable, many buyers will overlook these properties, leaving the door open for lower offers.
5. When Sellers Are Motivated
Lastly, bargain shoppers should look for desperate sellers. When owners are motivated to sell they tend to accept their first offers, even those below asking price. At open houses, buyers can eavesdrop on conversations between seller’s agents and other shoppers to measure the seller’s desperation. Socialize with other shoppers; sometimes neighbors peruse open houses and share details about the history of the community and sellers.
Did the seller recently relocate for work or a divorce? Is the owner juggling multiple mortgages? Did the owner recently pass away and his or her heirs are trying to offload the property as soon as possible? In many of these instances, the current owners are rushed to sell. These are the perfect scenarios for buyers to make low offers.
Since home shoppers are preparing to make the largest purchases of their lives, they want to feel like they’re getting the best bargain. When trying to strike the best deal, consider these circumstances to submit a lower-than-asking offer.