So you have your home on the market for a while now and you just got an offer. It’s from a buyer who wants your home.... Yay! Of course you're excited and feeling great. That is, until you realize the buyer submitted low ball offer. How should you respond?
Start by setting aside your emotions, make sure you focus on the facts, and then prepare to make a counter offer that will keep the buyers involved in the offer.
Check Your Emotions
When you get an offer, even a very low one, it usually means that that person wants to buy your home. Even if the offer is offensively low, it deserves a response, whether it’s a counter offer, or if the terms are really bad, then a total rejection may be necessary. Either way, it’s important to remain calm and discuss with your options with your REALTOR® for responding to a low ball purchase offer.
Sending Back a Counter Offer
Unless you are in a hot market and you are getting multiple offers, it’s important to consider a counter offer. Counter the low offer with an offer that has price and terms you're willing to accept. Some buyers make a low offer because they think that's customary, they're afraid they'll overpay, or they want to test your limits. Many times after this initial offer, they are ready to seriously play ball.
When it comes to dealing with the buyers, a counteroffer signals that you're willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as changing the closing date, or any add ins like the kitchen appliances that you'd like to take with you.
Consider the Terms
For most buyers and sellers, price is paramount, but it's not the only clincher. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, there are limited conditions in the offer and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to get the deal to come together so you are happy with it.
Review the Comps
Ask your REALTOR® whether any homes that are comparable to yours (known as "comps") have been sold or put on the market since your home was listed for sale. The market can shift very quickly, especially in different neighbourhoods. If the market has shifted, you may have to lower the price you were expecting if you want to sell.
Consider the Buyer Comps if Necessary
When the buyer’s agent puts together an offer, they will do their own market research and supply comps for their buyers. Sometimes they will attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Don’t dismiss them. Make sure you take a close look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes as well as the comps your REALTOR ® and you used when pricing your home that will justify your asking price.
Get all Parties Together
If the purchase offer is too low to counter, but you don't have a better option, ask your real estate agent to call the buyer's agent and try to narrow the price gap so that a counteroffer would make sense. Also, ask your real estate agent whether the buyer (or buyer's agent) has a reputation for lowball purchase offers. If that's the case, you might feel freer to reject the offer.
Sometimes agents and buyers just low ball everyone hoping that someone will be desperate enough to accept the offer. That is why it is imperative that your REALTOR® educates you on what the market is really like so you are prepared when offers come in.
Don't Signal Desperation
Buyers are sensitive to signs that a seller may be receptive to a low purchase offer. If your home is vacant or your home's listing describes you as a "motivated" seller, “Quick closing available”, you may be signaling you're open to a low offer.
If you can remedy the situation, staging the property or asking your agent not to mention in your home listing that you're motivated, the next purchase offer you get might be more to your liking.
Hopefully when your next offer comes in, it’s a good one! If it’s not, hopefully you are now better armed to deal with any low ball offers you may get.
Selling your home?
If you are selling your home and are wondering what your home is worth, be sure to check out our free service and find out what your home is worth in TODAY’S market!
CLICK HERE TO FIND OUT WHAT YOUR HOME IS WORTH
The Premier Home Group
Ryan Smith & Lindsay Russell
Keller Williams Edge Realty, Brokerage
Not sure where to start? Here are 3 ways we can help:
CLICK HERE TO FIND OUT HOW MUCH YOUR HOME IS WORTH
CLICK HERE TO GET HOMES SENT TO YOUR INBOX DAILY
CLICK HERE TO GET INSTANT UPDATES WHEN YOUR NEIGHBOURS ARE SELLING