Sunday, April 22, 2007

Minnesota is In a Buyer’s Market—So Let’s Give a Lowball Offer!

In Minnesota, we are currently experiencing a buyer’s market. There are many more homes for sale than buyers in the Twin Cities market right now.

As a Realtor working in the northeast metro, I can pinpoint homes in neighborhoods throughout Anoka and Chisago Counties that haven’t sold after being on the market for several months. Communities north of the Forest Lake and Ham Lake areas that were booming a few years ago, like Stacy, Linwood and North Branch are experiencing a tremendous slow down. From Hugo to Lino Lakes, acreage properties and lake homes aren’t exempt from the slowdown. There are hundreds of choices for first time buyers and move up buyers alike. Buyers looking in these markets have the upper hand and can offer anything right? So why not go in with a lowball offer and see where it goes?
My position on the subject of lowball offers hasn’t changed with the market. It has been and always will be,
“How much do you want the house?”
There are times where a low offer makes sense and times where it can blow up in the buyer’s face. If you are willing to walk away from the home and there are several others homes you can go to, a low offer on a home could work for you.
If this is your dream home and you have few options, listen up. It might be a mistake to go in too low.
Though a seller may desperately need a buyer and be willing to consider all offers, it was still their “home” with all of the emotions that go with it. They may have raised children there, worked the garden, put in the tile floors, redid the kitchen, etc. There are going to be emotions tied to the property and even after being on the market for months, a seller could be incredibly insulted by an extremely low offer.
Insulted people can do irrational things, like not bothering to counter offer at all.
Now, I am not advocating paying full price on a home in a buyer’s market. This IS the time to get a great deal on a home and some houses are incredibly overpriced. But if you really want a particular home, what do you do?

Work with your Realtor to figure out what the home is worth and write an offer that reflects that analysis. As an experienced agent, I work with my clients to find the right starting point for an offer that might not be accepted as written but doesn’t offend the seller. Be prepared to discuss what needs to be done on the home with estimates for the repairs to justify the offer. As a skilled Realtor, I am able to present my clients’ offer in a positive light so there will be a Win-Win negotiation for all parties involved.

There are times when the Lowball offer works:

  • Corporate owned Relocation Home

  • Bank-owned Foreclosed Homes

  • Investment homes used as Rentals

  • Flipped Homes

In these cases, the sellers are business people. There is little or no emotional attachment to the property. It is all dollars and good sense. This is the perfect time for a “low ball” offer to see where their bottom line really is. Beware on the flipped home though. If it is a first flip and a labor of love, the owner may have developed some emotional ties to the property and they too could be offended by an extremely low offer. Even in a buyers market.
If you are relocating to Minnesota, are looking for Homes for Sale in the north and east Twin Cities metro area and need help from a professional Realtor, give me a call or visit my website for a FREE Relocation Packet. Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.
Copyright 2007