How To Handle A Low Ball Offer
Low ball offers are frustrating to homeowners and can be one of the top challenges when selling a home. Most, if not all homeowners have a certain amount they want to sell their home for and when an offer rolls in that’s $15,000 - $20,000+ less than asking it can be downright infuriating.
Real estate transactions have hurdles to work through and they’re not all easily put together. Negotiation is a part of real estate and it’s a regular occurrence for there to be back and forth between the buyer and seller before mutually agreeable terms are found. A low ball offer can be the start of negotiation but, it requires the proper steps be taken in order to turn that offer into something that’s acceptable for the seller and the buyer.
If you are selling your home and have received a low ball offer take a deep breath and consider the following advice on how to handle a low ball offer in real estate.
Why Do Buyers Make Low Ball Offers?
From trusting Zestimates or thinking the house isn’t worth what it’s listed for, to taking advice from their agent or family and friends there are a plethora of reasons buyers make low ball offers. Some buyers just like to throw something up against the wall to see if it will stick, testing the waters if you will.
How To Handle A Low Ball Offer In Real Estate
Control Your Emotions
Easier said than done, I know but, remind yourself this is a business transaction and emotions don’t mix well with business. Letting your emotions take control is only going to cause you more stress. A low ball offer might make you want to tell the buyer to pound sand however before you do that remind yourself that the offer is just a starting point.
The goal is to sell your home and if you tear up the low ball offer and trash it you’re not going to be any closer to achieving your end goal.
Always Respond With A Counter
If you don’t respond to a low ball offer you have zero chance of finding common ground and coming to agreeable terms. On the flip side if you counter there is always a chance through negotiation all parties will come to terms.
There are different strategies when countering a low ball offer.
Going back at full price is one that is very common to send a signal to the buyer that you aren’t messing around. This is not the best negotiation strategy in my opinion because it could deter the buyer altogether.
A strategy I’ve found to be more successful is to respond with the lowest and final price you are willing to accept. Taking this route can eliminate back and forth with the buyer and shows them you are serious about selling but, not at a low ball price.
Whatever strategy you opt to take always, always, always counter a low ball offer.
Review All Of The Terms In The Offer
Price is just one factor of an offer and while it’s an important one it’s not the only component to look at. There are other contingencies and terms in a purchase offer and when you’re deciding how to respond you want to look at each detail closely.
What other terms should you consider?
→Seller Concessions
→Earnest Money Deposit
→Inspection Contingencies (home inspection, radon, and termite in Virginia)
→Appraisal Contingency
→Financing Contingency or Cash Buyer
→Closing Date
It’s never just as simple as price when it comes to a purchase offer in real estate. An offer is a total package and while the price is often what you first look at it’s not the only term to consider.
Look To Your Realtor For Guidance
Low ball offers are just one of many reasons it’s imperative to hire a top Realtor to sell your home. If you are working with a pro a low ball offer is just another day at the office. Your Realtor will be able to guide you on how best to respond and remain calm and professional. Rely on your Realtor for advice and allow them to be your advocate.
Closing Thoughts On Low Ball Offers
You’re not the first seller to receive a low ball offer and you definitely won’t be the last. Take a deep breath and remove your emotions when it’s time to consider how you want to counter. Your end goal is selling your home and making that your priority is what matters most.
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Good morning, Amanda - this is a real issue in real estate and one where upfront discussion between broker and client helps prepare homesellers with the possibilities that come when a property comes on the market for sale. Your post serves as a good guide in education.
Good morning, Amanda S. Davidson what a nice video....and great advice to all sellers who are receiving offers..... those in your area would be wise to list with you and get the proper guidance....
Hi Amanda... I always tell my clients not to get emotional about low offers... it's just a door opening to negotiations and there's always a way to respond to send a clear message to the buyers that the offer is unaccaptable and put the ball back into their court to come back with something more reasonable.
Great video and great advice, I am glad that your transaction worked out through counter offers and I hope that it continues to be smooth through closing. It definitely never hurts to counter, the worst that can happen is the lowball thinks the counter is a highball, haha.
Good morning Amanda - this is good information both in your video and in your blog. It is about negotiation and have a skilled agent will help.
I also believe in "one" counter back - real estate is not a volley ball match. I also think far too many sellers take offers too personally - it's always worth countering to see if an unrealistic buyer sees the light. There's really nothing to lose. Good one.
Good morning Amanda S. Davidson
Thank you for sharing your information about how to handle low ball offers.
Have a great day.
Sunday May 5, 2019.
Hi Amanda S. Davidson - normally I would be agreeing with everything you and others have said. However, I just recently had a ridiculous offer come through with many contingencies and $85,000 under asking. I happen to know the agent well. No matter who you are, you would have been insulted by this offer. My seller told me not to respond back period.
We knew this home would sell for asking or close to it. The seller felt this would be an extremely bumpy road with this buyer if we proceeded.
Personally, I think this was spaghetti against the wall and the other agent and buyer were looking to see how much negotiation room they had. It was a gut feeling and sometimes you have to go with that feeling.
The agent called me ranting..."WHY didn't you respond to our offer and WHY didn't you counter back?" She made me feel as if she was embarrassed that she either agreed to or came up with the ridiculous offer and now she has egg on her face with her buyer.
BTW - We got full price offer with no bumps in the road at all! We are currently in contract.
I realize this is probably the exception and not the rule, but our sellers pay for our experience, and our ability to price properly and negotiate on their behalf...and sometimes you just have to walk away.
We had a low-ball offer on a condo that the seller was totally insulted by. I said let's counter the offer and see what happens. The buyer was only "testing the waters" and came up to a much more realistic offer that was accepted!
Hello Amanda, Great video and one that mkaes sense. Hope you are in for a fun day!
This is excellent advice to share with home sellers.
They are in good hands when they select you as their listing agent.
Amanda, I've had buyers that put in low ball offers and when the sellers came back with a counter of full price, the buyers said they were just testing the water. They both got serious and purchased the properties.
Hi Amanda:
Wise advice here for sellers to bear in mind in the event a buyer decides a low offer is the way to go. Can't say I have seen one on any of my listings for some time given the seller's market but you never know. Low offers definitely get the emotions rankled.
Jeff
Terrific post and title too..I hope you are getting a bunch of calls and clients!
We counter every written offer. Don't call me with an offer your client wants to make and you think it is too low to write. You will not get a response on that one, but if a person believes enough to put it in writing, they deserve a written response. As brokers, we also educate buyers on what the average is and how to write an offer that will get accepted.
Low to the seller is high to the buyer. The market will determine the correct price but the two parties need a starting point. It is part of our responsibility to provide that starting point and work towards the final goal of a happy closing for all involved. No is the first step to a yes.
So how low can you go? In my market it's either full price or $5,000 lower than asking (mobile homes in parks on leased land). If the seller has to continue paying space rent until it's sold, that is a determining factor.