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How to Make a Low Ball Offer

April 4th, 2011 · 2 Comments

One of the great things about running a blog is the people you meet via comments.  One of my readers Brian Porter,  a top agent in Portland Oregon, posted a comment and I went to check out his site.  He had a wonderful post on making lowball offers and has graciously allowed me to post it here.

Real estate Gurus often say to send out a lot of lowball offers.  This is a good strategy however sending out a ton of spam offers will only get you a bad reputation.  Although Brian’s article is written for home buyers he has great insight on how investors can do it right.

Here is Brian’s article:

Photo of Brian PorterIn today’s insane real estate market, you see and write a lot of lowball offers. I have been selling Real Estate in Portland Oregon since 2003, and I have written my fair share of low offers. Most low offers get rejected because the seller is looking to get a certain price, but once in a while you get one accepted. Here are some things that you can do to make your lowball more appealing to the seller:

  1. Put down a large amount of earnest money
  2. Make your earnest money non-refundable and immediately available to the seller
  3. Schedule the closing ASAP
  4. Eliminate contingencies, for example, eliminate the inspection contingency
  5. Don’t ask for any special favors, for example don’t ask for a home warranty
  6. Show the seller that you will be able to financially close the transaction
  7. Take on the seller’s problem, ie., accept the house with all of its defects
  8. Be very careful writing a letter that “explains” your lowball offer. You might insult the seller
  9. Respect the seller’s needs, for example, allow him to rent back for a while if needed
  10. Write lowball offers on properties that have motivated sellers, for example, vacant properties, properties that cannot be financed and properties that have been on the market for a long time

With regard to the letter that “explains” your lowball offer, the only time that I was successful, I wrote an offer for my client that explained that the buyer really loved the home, but it was beyond their reach financially. I explained that they could afford a certain price and nothing more, and it worked!

My friend Millard Christner from John L. Scott told me that if you are humble, respectful and empathetic when you write the offer, you will get a better result, and he also said that if you write a letter of explanation, make it brief. Furthermore he said that your offer should convey the fact that you are willing to take on all of the seller’s problems when you write the lowball offer, and all the seller has to do is sign the papers.

You may have to write more than one low offer before you get one accepted, but this is a legitimate way to negotiate a lower price on a property. You just have to have the stomach for it. You may also find yourself playing ping-pong. That is: offer, counter offer, counter to counter etc. This can be a huge waste of time, but as long as there is movement on the part of the buyer and seller, it is probably worthwhile to continue.

A few don’ts would include:

  • Don’t write more than one offer at a time, unless you plan on purchasing more than one property.
  • Don’t try justify a low offer by sending the listing agent “comparable properties”. I tried this on one occasion, and it   did not go over well at all.
  • Don’t insult the seller or disrespect the property; you will just burn bridges.
  • Don’t write a low offer on a new listing; you will be wasting your time .
  • Don’t write a low offer on an underpriced listing.  You might loose the opportunity to pick up a steal.

What do you think of Brian’s post? Have you put in a lowball offer that worked?  Leave a comment and tell us about it.

Here is a direct link toBrian Porters post on lowball offers.

You can reach Brian directly here

Happy investing,


Tags: Beginner · real estate

2 responses so far ↓

  • 1 Brian Porter (1 comments.) // Aug 10, 2012 at 8:54 pm

    Hi Ned,

    I have been doing some updates to my website, and somehow my web designers moved this blog post to a new spot. Thank you very much for publishing the post, but I wanted to let you know that it just recently got moved.

    BTW, Lowball offers are not working much in Portland any more. I have been writing a lot of above asking price offers… and I have been outbid more times than I care to admit.



  • 2 Ned // Aug 22, 2012 at 12:36 am

    Brian, thanks for the update. I have corrected the link in the post.

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