No matter the seller, dealing with a low ball offer stirs up feelings of frustration. The most common mistake sellers make when they get a low offer is how they respond to it. But a low ball offer is still an offer. That means there’s interest in your home. With the right strategy, sellers can turn a mediocre bid into a sale that satisfies them. Here’s what to keep in mind when a buyer submits a lowball offer.
Take the right approachTake the right approach
Selling real estate is a business transaction. That means negotiations are an inevitable part of the process. Reminding yourself that this is business, not personal, is key. From that vantage point, you open yourself up to negotiations. Without a willingness to “do business” with potential buyers, you run the risk of letting a potentially good offer slip away.
Work with the offer, no matter whatWork with the offer, no matter what
One of the biggest mistakes that sellers make is not responding to a lowball offer. Not the way to handle the situation! You may feel like the buyer’s offer is ridiculously low. Even if it is, there’s always room for negotiation. The buyer may just be feeling gutsy and only testing how serious you are about sticking to your asking price. So even if you are insulted by how low the offer is, proceed with a counter offer!
Stay calmStay calm
Most people have an emotional attachment to their home. Maybe you lived there for a long time or raised your family there. Maybe selling your home is a last resort when facing financial hardship. In some cases, homeowners put a lot of work into their homes. These factors make your home feel like it’s a part of you.
But to sell your home, you must let go of these emotional attachments. Having emotional attachments to your home makes sellers lose their cool when they get a lowball offer.
It’s normal to have an extreme reaction to a lowball offer. Some sellers counter with an offer that’s higher than their original asking price. This “I’ll show you” mentality doesn’t get you anywhere. As mentioned before, a proposal is just an offer. It’s not a personal attack or insult to your home.
When you get a low ball offer, take a deep breath, and keep an open mind. Remember that you’re doing business. The buyer putting forth a low bid has the potential to come up with a price that works for you. It doesn’t matter where the offer starts, but where it ends up!
Remember that you’re in controlRemember that you’re in control
A low ball offer makes some sellers afraid that they can’t sell their homes for their desired price. It isn’t the case. It’s important to remember that you don’t have to say yes to anything you don’t want to say yes to. You determine the selling price of your home.
Reassess your asking priceReassess your asking price
After receiving a low ball offer, it’s a good idea to analyze the market. Ensure that your home is priced competitively with current market values. You and your realtor probably did that already, but a comparative market analysis has a shelf life of just a couple of months. The real estate market changes daily. Since prices go up and down, your home’s original list price may be no longer competitive.
You can ask your realtor to request a list of comparables from the buyer’s realtor in some situations. Why? Because it may be possible that the buyer’s agent doesn’t even have a list of comparables or familiarity with your specific neighborhood. If this is the case, the buyer’s realtor may have given their client a skewed perspective of competitive/comparable prices.
Prepare for the counteroffer to your counterofferPrepare for the counteroffer to your counteroffer
Agreeing on a purchase price is a game of chess. Remaining patient, prepare for some back and forth.
One negotiation strategy to a low ball offer is countering with the smallest and final price you’re willing to accept. For the most part, this eliminates the back and forth right then and there.
Another negotiation strategy is countering the offer back to the full price. It shows the buyer that you are not “playing games.” You only want serious offers. Of course, this strategy potentially ends negotiations with the buyer on the spot.
Another counteroffer option is to offer a slight price reduction—$5,000 to $10,000 for a $300,000 home, or $10,000 to $25,000 for a $1 million home, for example. It’s important to explain your reasoning. Your listing agent can present the buyer with a list of comparable properties. Then the buyer sees that your home is listed at a competitive price. Your realtor should also point out all of your home’s features and amenities. It backs up your asking price.
Create competitionCreate competition
Setting your home’s list price slightly under comparable properties is one way to make your home stand out. It encourages reasonable offers right away. Another strategy to attract buyers is setting a commission slightly above the going rate. This encourages agents to show your home.
Imposing a deadline for offer submissions is yet another way to send buyers the message that you’re serious and attract reasonable offers. In fact, according to The Wall Street Journal, home listings with published offer deadlines sometimes sell above their asking prices.