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One Way To Buy A Cheap House

One of the simplest ways to buy a cheap house is to make a low offer. Sometimes called a "lowball" offer, this is a basic ploy used in real estate and many other negotiations. Everyone knows the technique, but most are afraid to use it. It can be a waste of time if you don't do it right, and it can be embarrassing, but it also can get you a cheap house.

A very successful real estate investor once told me,"If you aren't embarrassed by your offer, it isn't low enough." He's made millions in real estate, so I think he's worth listening to. However, you need to understand that a truly low offer isn't going to be accepted most of the time.

In fact, it will almost never be accepted. Does this mean it is a waste of time? Not at all! There will often be counter-offers, and a low initial offer is just a way to alter expectations.

Buy A Cheap House By Lowering Expectations

Once, when I was selling my car, a really nice guy looked at it. After crawling under and inside the car, he politely offered me half of what I was asking, and left his phone number (I said no). I wondered what was wrong with the car, and I found myself hoping I could get just a bit more than that half-price offer. My expectations had been altered quickly. Fortunately for me another person gave me the full asking price before I decided to pick up that phone.

The idea of a low offer then, is to alter expectations. If a seller is asking 0,000, and you offer 0,000, will he accept your offer? No. He'll almost certainly reject it. Buying a cheap house isn't going to be as easy as that.

However, he may counter-offer. Now suppose you go back and forth, and eventually agree to 2,000. He not have considered going this low before, but now it seems like victory to him after starting at 0,000.

The downside? You will lose a lot of potential homes this way. Some sellers won't even take subsequent offers seriously once you have offended them with your extreme offer. This then, is a technique to use when you have time to find that home, and really want the best deal you can get.

One investor in California routinely made dozens of offers at a time on houses. He didn't even look at them, but wrote the offers for 25% less than the asking price (he did include an inspection contingency to protect himself). Most of the sellers said no - most, but not all. He repeatedly got great deals in this way. That's one way to buy a cheap house.


About the Author: Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for ,500, visit http://www.HousesUnderFiftyThousand.com




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