How many times have you sold or traded in a used car and not received anywhere near what you wanted for it? This is because you thought you could set the market, but the market told you otherwise. Whether it’s a house or a car, the market sets the price, not the seller.
Once you get past this mental roadblock, you’ll find it much easier to offer much less than the asking price. The stock market is a good example. If you were unfortunate enough to buy the over-hyped $150 “dot bomb” stocks in early 2000, you soon found they were selling for under $1. Although you wanted $150 when you sold them, no one wanted your shares, and you suffered a huge loss.
Houses are the same, and many sellers are under the wrong impression that real estate must always appreciate. There are no rules about what appreciates or depreciates. So don’t be bashful about offering a low price on a house. Some homeowners who are selling their homes get the idea in their head that their house should sell for, say, $200,000 because they bought it a few years ago for $175,000. The seller may become indignant when presented with a much lower offer (low ball offer). They may have bought the house when the market was hot, but in a soft market, their house may not be worth their asking price.
By nature, we foolish humans have a hard time dealing with the fact that our property might be worth less than we paid for it. In overdeveloped areas, houses can lose their value rapidly, and y ou can use this to your advantage when buying a recently built home. One area of Pembroke Pines, Florida, was bursting with development for a few years straight. People selling homes they had bought 2 years before were losing $20,000 on the sale of their home because they were competing with all the new construction nearby. Buyers bypassed 2- to 3-year-old houses in favor of brand-new homes with better amenities and updated building codes for the same price or only slightly higher.