6 Tips When Responding To Low Ball Offers on a House
June 8, 2022
Getting a low ball offer on a property you are selling can be discouraging. After all, home sellers want to make a profit or at least break even when they sell their property. And, as someone who has lived in the home and made plenty of memories there, the seller will have a strong idea of what their home is worth. When a buyer makes an offer that is significantly lower than the asking price, it can leave the seller feeling confused, intimidated, and even a little bit angry. However, responding out of anger is never the correct way to handle a low ball offer.
There are ways you can turn a low ball offer into a better one without offending the buyer or jeopardizing the sale. In this blog post, we give 6 tips on how to respond to low ball offers correctly.
What is a Low ball Offer?
Negotiations are a part of the home-buying journey. An offer below the asking price isn’t inherently a low ball offer, but if it’s significantly lower, it might be. A low ball offer is usually defined as an offer that is at least 10% below the asking price. However, certain market conditions merit a lower than asking price offer. The Days on the Market, the urgency of the sale, and market health all play a role in whether an offer should be lower or higher. Buyers make low ball offers for a variety of reasons and understanding why they made a low offer is important to decide what you should do next.
How To Respond To Low ball Offers
1. Don’t Get Emotional
If you are selling the house that you have lived in for years, it’s likely that you will have an emotional attachment to the property. When you receive a low ball offer, it can be easy to get offended and insulted. Remember that this is just a business transaction and try to keep your emotions in check because responding hastily out of emotion may close the door on a buyer that was willing to negotiate. Sometimes buyers make low ball offers on a house because of bad advice or unrealistic expectations, so take your time when responding and consider all options.
2. Review The Entire Offer
The purchase price isn’t the only thing included in an offer for a house. There are many other elements to an offer that can heavily affect what fees the buyer and seller pay. Some buyers may make a lower offer for the house while offering to pay more upfront costs in the offer. Here are a few details that are included in an offer for a house.
- The purchase price
- Amount of earnest money deposit
- Preapproval letter
- Expected closing date
- Expected move-in date
- Deadline to respond
- Inspection contingencies
- Potential repairs
Reviewing the whole offer closely and not just the purchase price can help you understand what the buyer is really offering. They may offer a lower offer while raising the amount of higher earnest money deposit or waiving inspection contingencies. Many buyers pay in cash which can be very appealing to sellers.
3. Reexamine Your Price
The real estate market is constantly changing. Property values shift as the market ebbs and flows. When you receive a low ball offer, take a moment to reexamine the comparable properties in your area. Is your house priced competitively against the properties in the neighborhood? If so, then ask to see the comparable properties that the buyer’s agent used to low ball your offer. There may be a chance that the low offer is a mistake that is easily corrected.
4. Respond Firmly and Graciously
A response that offends the buyer or comes off as hostile will only strain the relationship with the buyer, making negotiations difficult. Be firm when responding to the buyer but still maintain a sense of grace. Try to acknowledge that their offer was a low ball one and that it will not be considered while keeping the offer open for negotiation. Some buyers also make a low ball offer as a test to see how sellers will respond. They want to get the best deal possible and lowballing is a way to start the negotiation process. Responding firmly and graciously shows buyers that you aren’t budging on the asking price and need to be taken seriously in negotiations.
5. Countering a Low ball Offer
Always make a counteroffer when presented with a low ball offer on a house. Not doing so is only missing an opportunity to potentially sell your property. Buyers can low ball expecting to negotiate so making a reasonable counteroffer is key. You can counter an offer with the full asking price, but doing so may scare away potential buyers who can’t afford the full purchase price of the property. If you want to reach a decent middle ground, then counter with the lowest purchase price that you still feel comfortable with selling at. This could be a couple thousand under asking or ten. Ultimately, it’s important to sell where you feel comfortable. Knowing where the buyer came from when they lowballed you is a good first step to reach a decent counteroffer.
6. Look To Your Real Estate Agent For Advice
A good real estate agent is an expert in their field and has plenty of experience with low ball offers. An agent’s expertise will help when it comes to how to respond to a low ball offer and will help you get a better deal or at least reach a comfortable middle ground. Agents will know how to correctly price your house to avoid any mistakes when it comes to negotiating the purchase price so that the listing price isn’t too high or low. Working with a good real estate agent can be especially beneficial when dealing with buyers who are using strategic negotiating tactics.
Selling Your House? Then You Need a Negotiator!
Selling a house requires a lot of work and it’s not always easy. Between listing the house, packing, and negotiating the terms of a real estate deal, selling a house can be a full-time job on its own. Working with a good real estate agent when selling can take the burden of responsibility off your shoulders and put it onto an expert who’s trained to handle it.
Finding and vetting buyers is a time-consuming task, but despite what many believe, the bulk of a real estate agent’s value doesn’t come from finding a buyer for the seller. It comes from negotiating with the buyers to reach a deal that satisfies both parties. If you plan on selling your house and you need a good real estate agent, get in touch with a local Negotiator today!