Lowball Offers: When They Work, When They Backfire, and How to Tell the Difference

With inventory near five months of supply and most metro sales now involving either a price reduction or seller concessions, we are hearing a question we did not hear much from 2020 through 2022: how low can I offer? Some buyers have read that it is a buyer's market and assume every seller will take 15% off. Others are afraid of offending a seller and offer close to list price on homes that have been sitting for months.

Both approaches leave money or opportunity on the table. Here is how we think about aggressive offers, honestly.

What a Lowball Offer Actually Is

A lowball offer is not just a number below list price. It is an offer that is meaningfully below what the market data says the home is worth. If a home is listed at $650,000 and comparable sales suggest it is worth $600,000, an offer at $595,000 is not a lowball. It is a well-researched offer on an overpriced listing. An offer at $520,000 on a home that is fairly priced at $600,000 is a lowball.

That distinction matters because sellers and their agents react to offers relative to what they believe the home is worth. Your offer should be anchored to the comps, not to the list price and not to a percentage you read online.

When an Aggressive Offer Can Work

An offer well below list price has a real chance when several things are true. The home has been on the market for a long time, especially 60 days or more, with one or more price reductions. The list price is clearly above what comparable homes have sold for recently. The seller is motivated, for example because they have already bought another home, are relocating, or are selling an estate. And the home has issues that other buyers are walking away from, such as an older roof, dated systems, a busy street, or a layout that is hard to sell.

Right now, those conditions are most common with condos and townhomes, where the metro median has fallen more than 6% over the past year and median days on market are in the mid-40s. They also show up with new construction spec homes on the edges of the metro, where builders are carrying inventory and offering large incentives.

When It Backfires

An aggressive offer tends to backfire when the home is well priced, fresh to the market, or in a segment that is still competitive. Detached homes in established neighborhoods such as Wash Park, Platt Park, Highland, and much of Arvada and Littleton are still selling relatively quickly. A seller who listed last week at a fair price and has had steady showings is not going to take 15% off, and may not even respond.

There is also a human factor. Sellers are people, and many have strong feelings about their homes. An offer that feels insulting can make a seller less willing to negotiate with you later, even if you raise your number. We have seen sellers accept a lower offer from a different buyer simply because the first buyer's approach soured the relationship.

Finally, a lowball offer combined with lots of contingencies, a long closing timeline, and requests for personal property sends a clear signal that you are not serious. If your price is aggressive, the rest of your offer should be clean.

How to Make an Aggressive Offer the Right Way

Do the homework first. Ask your agent for recent closed sales, not just active listings, and look at how long similar homes have taken to sell. Look at the listing's history: price reductions, previous listings that expired, and how long it has been on the market. Those details tell you how motivated the seller is likely to be.

Explain your number. A short note from your agent to the listing agent with the comps behind your offer changes the tone completely. A seller is much more likely to counter an offer that is clearly based on data than one that seems pulled from thin air.

Strengthen the terms you can. Strong pre-approval, a reasonable earnest money deposit, a flexible closing date, and a straightforward inspection period make a lower price easier to accept.

Consider asking for concessions instead of a lower price. In today's market, many sellers will agree to pay toward a rate buydown or closing costs more readily than they will cut the price, partly because it protects the recorded sale price that future comps are based on. For buyers, a buydown can reduce the monthly payment more than an equivalent price reduction, at least for the first few years.

Be ready to negotiate. A first offer is the start of a conversation. If you come in aggressively, expect a counter and decide in advance how far you are willing to go.

What Sellers Should Do With a Lowball Offer

If you are on the other side of this, the best response to a low offer is almost always a counteroffer, not silence. A buyer who makes an aggressive offer is still a buyer who wants your house. Counter at a number you can support with data, and focus on the full picture, including concessions, timing, and inspection terms, not just the price. Some of the best deals we have closed started with an offer the seller initially found frustrating.

The Honest Answer

There is no magic percentage. The right offer depends on the specific house, the specific seller, and what the market data says it is worth today. In the current Denver market, buyers have more room to negotiate than they have in years, especially on condos, townhomes, and homes that have been sitting. But a fairly priced home in a desirable neighborhood is still going to command close to its asking price.

A good agent's job is to help you tell the difference, so you do not overpay for a stale listing or lose the right house by being too aggressive. That is a conversation we have with every buyer before we write an offer.