Low Balling

lauriemont

I've been reading a lot of the posts in this forum over the past month or two, and one of the common pieces of advice is that buyers place a low ball offer.

I know that buying/selling a house arguably involves more art the science, but I'm interested in the science side.

Let's assume the asking price for a house on road x in area y is 290,000. Assume that the average selling price is 190 on the road in the last six month, and about 180 in the area. Where should you place your low ball?

One argument is to use the median selling price in the area or road (if there is enough data). For sake of argument lets say all things considered, it is 185. So where should you low ball?

Clearly, one needs to factor into consideration the condition of the property, the number of bedrooms, whether it is terraced, end of terrace, detached, etc. as well as any extensions or conversions.

But where do you place the initial low ball? And how do you factor these other considerations into account?

I have compiled a spreadsheet of asking prices in the area, and know the median. But I am having difficulty of where to place the low ball

Any insights or guidance? Serious posters only please

Victor

Do not offer the historical median or anything near it - you could quite easily be over paying.

Initially at least, you need to offer somewhat less than the minimum (time, size and quality adjusted) that a similar property has achieved.

Your first bid should not be your final bid. People are much more willing to do a deal if there is a little wiggle room. Push too hard and they just might strip the house (excessively) as they are leaving.

Bigcheeze

If you're offering in or around the average price paid over the last 6 months that's not low-balling, that's market value.

The_Conductor

It really depends on where the property is- and more pertinently, how long it took the last property sold in the area, to sell. What it sold for is an important indicator- but if the seller has a row of people interested in buying lined up and toss in a low ball offer- chances are they won't even acknowledge your offer.

At the moment there is a significant shortage of family homes in South Dublin, inner city Dublin, inner City Cork, and Inner city Galway. Clare, as usual, has its own unique micro market- and after that you have segmentation of the market into family homes and separately apartments, leasehold and freehold property, rural or urban properties, and then- properties in the places which were sold as commuter properties (strangely enough this includes a band all the way from Waterford across Tipp to Limerick, up the coast as far as Sligo (presumably people were supposed to ignore their 3 hour train journey each way).

If you're trying to buy in South Dublin, Dublin City Centre, Cork City Centre or Galway City Centre- don't bother playing games with low ball offers- you'll be laughed at (the caveat- is this is for family homes- not apartments).

If you want to buy elsewhere- toss in a lowball offer. If its in the midlands or an unfinished estate- don't bother- you'll not get mortgage approval unless you have an unusually large deposit.