How to Handle a Low-Ball Offer on Your Home
One of the biggest fears that sellers have is receiving an offer that’s well under the listing price. Homeowners typically have a dollar figure in their minds that they want to sell their properties for, and if an initial offer comes in well under that price, it’s obviously frustrating and even insulting. However, that doesn’t mean you shouldn’t necessarily assume the deal is dead just yet.
Before you rip up a low-ball offer on your home, here are some considerations to make when handling these potentially unpleasant situations.
Be Prepared
Not every real estate transaction is structured the same way. While many times a very attractive offer will come in, other times the offers are unacceptably low. It’s important for sellers to be prepared for this potential situation rather than be blindsided by a low-ball offer. Understand what would actually be considered a “low-ball” offer before reacting to one.
Every market is different. In some markets, a low-ball offer can be considered a number that’s 10% under the asking price, while in other markets it may be as low as 30% below. Go into the game fully prepared for anything to happen and you’ll be better equipped to handle yourself.
Keep Your Emotions in Check
Your first thought when being presented with a low-ball offer might be to tear the contract to shreds and tell the prospective buyers to take a hike. Selling a home is certainly an emotional process, but it’s important to keep your feelings under control to ensure you don’t lose out at the end of the process. What you should remember is that where the process ends is more important than where it starts. If you can end off somewhere that’s acceptable to you, starting off with a low-ball offer is essentially irrelevant.
Counter it
That brings us to our next point. You won’t end up anywhere that you want to be if you throw the offer out completely without countering. Even if you are presented with a low-ball offer, always counter it. Sure, you might be shut down, but you might as well entertain the potential of getting the price back up there while an offer is on the table. Keep the negotiation lines open. Come back with a counter offer and see how the buyers react and what they counter with. How much you counter with should be discussed with your real estate agent.
Keep an Open Mind About Where the Buyers Are Coming From
Don’t always assume that the buyer is intentionally trying to insult you by putting in a very lower offer. There might be any number of reasons for their low-ball offer. Perhaps that’s all the buyers can afford and thought they would try their hand at putting in an offer on a home that they love, even if the offer is well under the listing price.
Maybe they are coming from a location where comparable properties are selling for less than what you are asking, or perhaps they are first-time buyers who may be confused about how the negotiating process on buying a new home works. Of course, they could also be an investor who’s just trying to get a property for dirt cheap in order to maximize profit margins. Your real estate agent can help you determine what the buyer’s motivations are behind their low-ball offer.
Don’t Settle For Less Than What Your Home is Worth
As long as you are certain that the price you’ve listed your home at is at par with the current market, then there’s no reason to accept much less than what it’s worth. This is why pricing the property accurately from the get-go is so important.
Your real estate agent should pull a list of comparable sales of similar properties in the neighborhood that recently sold to identify what price point you can list at. If other homes that are very similar to yours have recently sold for $400,000, for instance, there’s no reason why you can’t get somewhere close to that.
The Bottom Line
Keep in mind that selling a home is essentially a business endeavor where each party is trying to get the best deal possible. Taking emotions out of the equation will help you to see more clearly and make better decisions. If you let your emotions get the better of you, you’ll only wind up frustrated with no deal. If you do get a low-ball offer, there’s still a chance that you can come out of the transaction with a home sold at an acceptable price if you take the right steps in the process.
