Paragon's chief market analyst, Patrick Carlisle, was extensively quoted in a front page article by Amy Hoak in the Wall Street Journal online edition regarding low-ball offers. The complete article is here:
The complete article is here.
Here are the excerpted quotes (under the headings under which they appear). They by no means constitute a comprehensive analysis of the complicated subject of making and negotiating offers:
“Other sellers will choose to let their listings expire and try again next year. They, too, may be willing to make a deal in order to sell their properties, even if they're no longer actively trying to sell their place, says Patrick Carlisle, chief market analyst for Paragon Real Estate Group in San Francisco. The key to making an aggressive "lowball" offer on a home is to start by finding properties that have languished on the market for a long time. The softer the market, the more likely the strategy will work, Mr. Carlisle says.
1. Understand the market
Before submitting an offer, your real-estate agent should do a full comparative market analysis of the property to determine what its fair market value is, Mr. Carlisle says.
2. Pick the right real-estate agent
Some real-estate agents caution buyers against making an offer that is so low it could offend the seller and halt the negotiation process.
But sometimes agents are too reluctant to make aggressive offers, Mr. Carlisle says. They may be more focused on completing a deal and collecting their commission, rather than making the best deal. Or their negotiation skills might not be up to par.
"If it's an appealing, well-priced property that has five or six offers on it, well, going in 10% or 20% under asking isn't going to get you anywhere," he says. But on a property that has been overlooked by the market and doesn't have multiple bidders, it often doesn't hurt to go in low.
3. Know what you're willing to pay
Before negotiations begin, it's important for a buyer to decide what his walk-away price is, Mr. Carlisle says. "At some price point, the deal is no longer worth doing, no matter how great the property."
4. Make a clean, easy offer
Also, have your financials in order from the start. Loan qualification is more difficult these days, so it's important to have a lender pre-approval letter, Mr. Carlisle says.”