Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes
Had a client score a deal 30K under asking. It was listed for 1 week. I sent it to my client and told him let's lowball. We offered under.
Some agents despise throwing out lowball offers, I've found it's always worth the try. A few reasons why I think it's worth doing and what we thought of going into it.
- It was priced high out the gate. Looking at comps compared to the ARV there was not enough margin at their asking. Too much work for a homebuyer and not enough meat for an investor. - Worst case a seller can say is no. Best case they accept. In the middle they counter. End of the day you are seeing if there is a middle ground, win for all parties. - Price is not the only factor. For this one we were flexible on the close date to offset offering under. They needed flexibility to move.
I am not saying throw out crazy lowballs on 100 properties for fun. Have reason on the situation. Some sellers care more about certain terms. Some sellers need to sit on the market longer.
If you are going to offer under build rapport and a relationship with the listing agent or seller. Offer with good faith, have attractive terms and be willing to negotiate.
Caleb, I agree. A low offer with a reason behind it is just good negotiating.
One way to find the right properties is to look at how long a home has been on the market and how long the seller has owned it. Every Friday, I put together a list of Louisville homes that have been on the market for 90+ days and have had the same owner for at least 10 years. A long-time owner has usually built up a lot of equity, so they have more room on price than someone who bought two years ago. And after 90 days, many of them are more open to an offer than they were the first week.
That doesn't mean every home on the list is a deal. But it's a good place to start looking for sellers who might accept a reasonable offer under asking, especially if you can also offer something they need, like your flexible close date.
If anyone's looking in Louisville and wants to see this week's list, feel free to message me.
the main thing I took away here is that you knew from data and stats that it was overpriced and could defend your clients position, that's the way to do it in my experience. lowballing with a defense and logic makes you look like a profesional, lowballing just to see and at a % of list that a guru told you to aim for makes you look like an amateur.
Caleb, this is exactly how I coach buyers too — the offer isn't an insult, it's a data point. The key line in your post is "have reason on the situation." A low offer with comps attached and a clean pre-approval reads as professional; a low number with nothing behind it reads as a fishing expedition, and listing agents treat those very differently. The other thing I'd add: put your best terms forward alongside the price. Flexible close date, strong earnest money, minimal contingencies you can live with — those cost the buyer almost nothing and they change how the seller feels about the number. Price gets the attention, but terms get the signature. Worst case is a no, and a no with a counter is just the start of the conversation.
Caleb, I agree. A low offer with a reason behind it is just good negotiating.
One way to find the right properties is to look at how long a home has been on the market and how long the seller has owned it. Every Friday, I put together a list of Louisville homes that have been on the market for 90+ days and have had the same owner for at least 10 years. A long-time owner has usually built up a lot of equity, so they have more room on price than someone who bought two years ago. And after 90 days, many of them are more open to an offer than they were the first week.
That doesn't mean every home on the list is a deal. But it's a good place to start looking for sellers who might accept a reasonable offer under asking, especially if you can also offer something they need, like your flexible close date.
If anyone's looking in Louisville and wants to see this week's list, feel free to message me.
Had a client score a deal 30K under asking. It was listed for 1 week. I sent it to my client and told him let's lowball. We offered under.
Some agents despise throwing out lowball offers, I've found it's always worth the try. A few reasons why I think it's worth doing and what we thought of going into it.
- It was priced high out the gate. Looking at comps compared to the ARV there was not enough margin at their asking. Too much work for a homebuyer and not enough meat for an investor. - Worst case a seller can say is no. Best case they accept. In the middle they counter. End of the day you are seeing if there is a middle ground, win for all parties. - Price is not the only factor. For this one we were flexible on the close date to offset offering under. They needed flexibility to move.
I am not saying throw out crazy lowballs on 100 properties for fun. Have reason on the situation. Some sellers care more about certain terms. Some sellers need to sit on the market longer.
If you are going to offer under build rapport and a relationship with the listing agent or seller. Offer with good faith, have attractive terms and be willing to negotiate.
@Caleb Brown the piece I'd underline is putting the reasoning in front of the listing agent. When an investor client of mine is going under ask, I'll send a short note with two or three comps and the repair estimate behind the number. It gives the listing agent something to carry to the seller besides "my buyer wants a discount." Terms can do as much as price too: a flexible close date, a short inspection window, clean financing. And before writing it, I'd ask the listing agent what the seller actually needs, since the answer often changes the offer.
@Caleb Brown The strongest part of this example is that the offer wasn’t low just for the sake of being low—it had a reason behind it, and you gave the seller flexibility that mattered to them. I’d care less about the discount from asking and more about whether the price works against the comps, repair budget, and margin I need. Getting $30K off wouldn’t mean much to me if the starting price was too high.
I’d also be careful with “the worst they can say is no.” I wouldn’t want a careless offer to undermine an otherwise useful conversation. My approach would be to explain the numbers respectfully, offer terms I can genuinely deliver, and know my ceiling before negotiating. In your example, the flexible closing date stands out: you weren’t just asking the seller to take less—you were responding to something they needed.
Caleb's approach is the one that works in Detroit too: the under-ask offers that land are the ones where the listing agent can walk into the seller conversation carrying something besides a low number. When I send one, it comes with the two or three closed comps behind it and the rehab math — a real scope-based estimate of what the house needs — so the agent can show the seller why the number is what it is.
The other piece nobody's mentioned: in the investor segment, you'll deal with the same listing agents over and over. A reputation for justified offers — numbers you can defend and closings that actually happen — gets your next offer read seriously. Blind lowballs on everything burn that. I'd rather be the buyer whose low offer an agent trusts than the one whose offers get deleted unread.
Some numbers for the "how much under" question, from the Kansas City listings I screen. At the bar most investors I talk to want, DSCR 1.25 with 20% down:
- At asking: 239 of 5,300 homes for sale clear it - 5% under asking: 349 - 10% under: 485 - 15% under: 644
So every 5% off pulls in another 110 to 160 homes. But the typical home that doesn't clear it would need about 40% off, which no seller takes. A justified lowball gets a near-miss over the line; it doesn't fix a house whose rent isn't there.
(I lowered only the loan payment with the price and held taxes and insurance where they are, so these counts lean conservative.)
Disclosure: I run NetsPositive, the screener these counts come from.
First, been on the listing a while is definitely the first starting point for low offers. The seller has to come to terms with the market, versus you or their agent trying to convince them their price is too high, or the properties other issues are negative.
From an Investors standpoint making lowball offers and our relationship with our RE Agents, it's about making offers and closing deals. The agents we use don't mind doing the Lowball offers because they know we are ready to buy. One of our deals as the buyer, we actually paid the RE Agent a full commission even though we didn't have to. Their seller due to personal relationships was not going to pay them. Whenever a deal comes up, that fits our buy box, they call us before it is listed.
Second, you don't know what you don't know. Cancer, grandchildren in another state, need the cash, can't keep up the property, lost money on the stock market, lost their job, job movement, divorced moving, etc. are all issues sellers will run into that want them to sell below market.
On our commercial side we have closed; List $40,000- Buy $10,000; $500,000- $220,000; $1.2mm- $800k. $800k- $200k; $250k- $250k. There was a combination of issues- long time on market, too small for them to worry about wanted off their portfolio (they had 15,000 doors and wanted this gone), FBI/IRS fines, divorce-moving, old age and need to dump. The $250k-$250k deal I only wanted to pay $200k; but the value-add potential was too great to pass up. Did seller financing on $50k of it, with zero interest for 5 years. The noninterest and the use of the $50k on other deals made up for the $50k extra.
Buyers' market- Different market but same logic. We do Teak plantations in Belize. We need cheap ground, but also want long-term value adds (location, water, hills-views, electric/waterlines versus off grid). This is totally a buyers' market. Properties can stay listed for 5 years or more. Our first property and the best was on the market for 15 years. The same lack of market applies to us; we can't do these as flips. Cancer, Old age the time for the dream is gone, don't use the property enough, don't have the money to develop. When we buy land down there, I make a list of about 10 properties with list and our offer price. Then rank in descending order of preference. Make 3 day offers, with no counteroffer. Subject to. List $500k- buy $250,000; $320k- $185k; $270k- $89k; $180k-$180k; . Each of these had time on market, need the cash, don't have the funds to develop, no offer in years, old age/health, etc. Normally we only have to go thru the first 3 offers before we close one. The only one we paid full price $180k- $180k; there was a hill with a great view, in a great location, near electric/water. Just the hill would resale for $120k, 3 out of the 25 acres.
You don't know what you don't know. Make the offers. 3 days, subject to, no counteroffer unless Seller finance. Move on to the next property, know your walk away number. Never get locked in on a specific property.
