Co-op and Condo Buyers Ask: What's a Lowball Offer and What's Realistic?

A willingness by co-op and condo buyers to enter the market despite persistently high interest rates led to a surge in Manhattan sales during the second quarter of 2024. In a rare switch, the increase in mortgage buys outpaced the increase in all-cash purchases.

Such signs that the city's dormant real estate market might be reviving have led one shopper to ask a newly relevant question: When it comes time to make an offer on an apartment, when is it lowballing, and when is it simply offering what the buyer thinks is a realistic market price? This shopper, unlike her agent, claims to belong to the "it doesn't hurt to ask" school.

No two potential home purchases are exactly the same, so there isn’t a universal answer to this question, replies the Ask Real Estate column in The New York Times. In any event, a buyer should be upfront with her agent about her strategy so there's a good working relationship, or find another agent who can support her goals.

A seller might have set the price using local market data, or because they know they want to achieve a certain price, or a combination of both, says John Avenia, a broker with Columbia County Real Estate Specialists.

One thing the buyer and her agent can do is have a conversation with the seller’s agent to understand what kinds of offers the seller might entertain. “Whether the seller is flexible or not, you should understand the local market, the comparable properties, and where the market is trending,” says Jeff Cohen, a real estate agent with NextStopNY.

An experienced real estate agent who knows the area can help a buyer strategize. If the seller is asking too much based on recent sales of comparable properties in the area, and if the days on market are above average for the neighborhood, the buyer should certainly consider submitting a lower offer.

“However,” Cohen advises, “keep in mind that the seller may not entertain such offers or respond with a counteroffer.”

Regardless, prospective buyers should limit any offer to the value of the property as they see it. While missing out on the purchase of a property to another buyer because you undervalued it is unfortunate, Avenia says, “overpaying for a property can be much worse.”

In other words, it doesn't hurt to ask, but it might hurt very much not to ask.