Lowballing is back. Here’s how to ace the “insult offer”

Homebuyers, it’s time to sharpen your haggling skills.

Nearly two-thirds of buyers paid under list price last year, the highest share in six years. The typical discount was 7.9%, the biggest markdown in 13 years—about $31,600 off the typical home. And with mortgage rates now below 6%, buyers stand to save even more this year.

But how do you convince a seller to accept your indecent proposal? We got lowballers to share their dos and don’ts.

Do look for long days on the market. The clearest sign of seller fatigue is a listing that’s been on the market for a while. That’s how San Francisco–based real estate agent Julie Upton helped all her buyers pay under list price last year, including one who purchased a house in Sebastopol, CA, listed at $1.3 million. “After 90 days on the market, we submitted a $1 million offer,” she recalls. “They outright rejected it, but started negotiating three weeks later.”

Don’t say the house is a dump. Even if it is a dump, that’s worth sugarcoating. On the Sebastopol property, Upton simply said it “needed improvements” totalling $300k–$400k. It can also help to make the offer feel less personal. “Play the pauper,” Upton says. “I write letters on behalf of buyers saying they’d love to offer full price, but won’t qualify for the loan.”

Do know your numbers: After eyeing a $499,000 house in Tacoma, WA, that had sat on the market 68 days, investor Tom Hume offered $460,000. “I explained that it was simply a matter of cap rate: At $460k, the cash-on-cash return would be just north of our 5% threshold,” he explains. “The listing agent did not seem offended.”

Do come armed with comps. New York City–based real estate agent Jane Katz made an “embarrassingly low” offer of $1.8m on an apartment asking for $2.5m. To prove her buyer hadn’t plucked that figure out of thin air, Katz pointed to similar properties nearby with dramatically lower fees. At a nearby building, maintenance was 66% lower, while other Fifth Avenue apartments were 66% lower as well. These comps helped the seller reduce their expectations.

Do solve the seller’s problem. Chad Cummings recently spotted a $1.2 million home in Cape Coral, FL, that had been sitting on the market for 247 days. “My client offered $714,000,” he says. “The listing agent laughed and hung up.” But Cummings knew the seller needed to liquidate due to divorce, so they sent an offer with proof of funds, a 14-day close, and no inspection or financing contingency. “The seller’s attorney called back, and we closed at $740,000.”