LOW Baller

[LADoc00]

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Looks like I will get prequal'd for between 1-2 million and am considering putting a nice selection of homes in the 1mil-2.5mil range, researching them carefully and simply "Low Balling" by making serial offers at 50% of asking price. Anyone have experience in making lots of low ball offers? Does the deposit get returned to you should the offer be rejected in any case?

 

[mshheaddoc]

If your offer is rejected then your deposit is refunded, check your offer for details of the agreement. The brokerage will refund your money. Usually the sellers might try to counter but if they don't think your serious they might just outright reject. Depends on the offer and how much earnest you showed to show that you're serious. With low ball offers, I've heard people offer higher earnest monies to prove they're serious. Never tried it myself though.

 

[bkpa2med]

I would put offers in one by one. From what I know, they must respond back to you within 24-48 hrs of your offer. So if they reject, then you move on and continue. What area are you looking for buy in? For the most part, big cities haven't really seen such a slow down in the market. Just a bit, IMHO.

Goodluck though!

 

[mshheaddoc]

Good point. Usually they have a certain time to reject or accept, most are 72 hrs standard if I remember correctly but I'm sure every form is different in each state. Make sure you don't end up with multiple contracts or you have a way to get out of the contract easy if you decide to make multiple offers. You can technically state whatever you want in the contract but its bad form to start with multiple offers as it might be a red flag to some sellers (and agents) who would realize what you're trying to do. I'd probably make a list and go down the list. Do you have counsel or an agent?

 

[Jocomama]

When I buy, I make sure I am fully approved by income/credit/assets. All I need is a property.
Then, if I really want the home - I go in with a CASH offer. The Cash will come in the form of a Bank Check. I NEVER use any mortgage contingency clause.
Don't waste time with 50% low-ball offers unless you are will to pay cash. Otherwize the realtors are pretty smart, and you will not be fancied as a client to deal with. Go with their suggestions, which in that range in S Cal *right?) you are looking at 25% below list.

Looks like I will get prequal'd for between 1-2 million and am considering putting a nice selection of homes in the 1mil-2.5mil range, researching them carefully and simply "Low Balling" by making serial offers at 50% of asking price. Anyone have experience in making lots of low ball offers? Does the deposit get returned to you should the offer be rejected in any case?

 

[LADoc00]

Im going in making offers one by one. If it takes me 6 months, so be it. In this market, Im in NO RUSH. Im going to offer between 50-75% of list price depending on how much list is vs. a comp. market analysis price would be. Homes where I am are listing at 20-25% OVER the CMA's like zillow.com but nothing is selling and I mean nearly nothing.

The ? I have is how bad will the market get? Will things fall more than 50% of where they are now?

 

[Miami_med]

Im going in making offers one by one. If it takes me 6 months, so be it. In this market, Im in NO RUSH. Im going to offer between 50-75% of list price depending on how much list is vs. a comp. market analysis price would be. Homes where I am are listing at 20-25% OVER the CMA's like zillow.com but nothing is selling and I mean nearly nothing.

The ? I have is how bad will the market get? Will things fall more than 50% of where they are now?

If LA is like Miami, 50-75% puts you somewhere between '03-'04 pricing, which is probably when things got overly bubbly. That may not be unrealistic as an inflation adjusted landing point in the distant future anyway. The real question, is what kind of timetable are you looking at. I think that there are some really lean times coming up in real estate, which will partially depend on how much the Fed wants to devalue the dollar by printing more fake money. However, more fake money=inflation=good idea to buy. If they try to save the dollar, you'd have to be willing to stay in the home for long enough to ride out the inevitable recession.

Since like 80% of the funny money is coming through Fannie Mae, a good look at congress may tell you whether high real estate pricing is sustainable in the long run. If the financing runs out, and Joe Bloe can't finance a $500k condo on a neg. am. loan, prices will have to come down.