Here are the 5 Possible Issues with Lowball Offers when trying to Buy a Kansas City Home - Kansas City Real Estate

Recently, the market has been changing in Kansas City, and a lowball offer may affect a home buyer in ways they had not thought of before. The market for the past few years has been on the buyers’ sides, so it isn’t surprising to have seen some lowball offers. For the past couple years it seemed almost typical that the first offer by a buyer was a low offer. Some buyers were aggressive and tried a lowball offer in order to secure the home.

Here are the 5 Possible Issues with Lowball Offers when trying to Buy a Kansas City Home:

1) Understand the Market Temperature. What does this mean? If the real estate market is heading downward like it has been the past couple years, then a lower then list price offer may not be unreasonable, because the market is showing that it is declining. On the opposite end, if home prices are trending upward like they have been the last couple months, a low offer maybe  unreasonable. It is important that home buyers understand the trends in the real estate market. Uneducated home buyers will make the wrong offers because they don't understand the real estate market. 

2) Use Comparable Homes to Decide on Offer Price. Is there a home that looks similar in the subdivision that has sold recently? What was the home listed for sale? How long did it take to sell? What was the selling price? How does it compare to the home you're interested in? Knowing the real estate market and how to value homes is important. If the comparable home was a distressed home that needed repairs, don't use equally to compare to the move-in ready home that you're looking at that also has a finished basement, refinished hardwood floors, new paint and a nicer cul-de-sac lot. Uneducated home buyers will make the wrong offers because they don't understand how to evaluate the home they are interested in making an offer on.

3) Time. How long has the home that you're looking at been on the market?  If the home has not been on the market for a long period of time, it is understandable to make a low offer. If the home just came on the market, it doesn't make sense to make a low offer unless the seller made a mistake in pricing their home. Many home buyers will look at the length of time a home has been on the market when considering making an offer.

4) Sellers are Human. What if the seller is very proud of the updates to their home and has their home priced correctly for the market, and a buyer offers a very low price? What do you think the first words will be that will come out of the sellers mouth? Obviously the seller will not be happy and the negotiations will sour quickly unless their is some crafty intervention from the REALTORS.  If a buyer is thinking about making a lowball offer,  try softening the hurt by adding comps and possible repair estimates needed for the home.

5) The Buyer May Never Get The House. If a home seller feels slighted or offended, keep in mind #4 — sellers are human. Might that offense mean the seller won’t work with that buyer? Possibly. If you really want the home, don't offend the home seller. Over 22 years in real estate, I have seen some sellers upset with the initial offer that the seller will not sell to the buyer, even if they raise their offer to the highest offer in a competitive situation.

Sellers don’t have to counteroffer. They can reject an offer outright. I have seen this many times. 

Home buyers looking to secure a home during the changing Kansas City real estate market will do themselves a favor by understanding the real estate market and being cautious in making offers. 

A buyer should understand the market and what is happening, and a buyer’s agent can help guide them through the process by sharing facts and statistics.

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