Today, we’re looking at lowball offers, how to handle them if you’re a seller and how to make them if you’re a buyer.
The market is pretty crazy right now. The pendulum has swung the other way from where it was just a few years ago during the
chaos of Covid.
How Seller’s Should Handle Low Offers
First, remove your sentimental value and stubborn mindset and confirm if you’re priced right.
Unattractive offers of 10% or more under the asking price can feel like a slap in the face. It may be hard not to be insulted when the home you’ve lovingly maintained for years gets a lowball offer.
As a seller, your gut reaction may be not to respond at all. In a seller’s market, that may be a winning strategy, but it could be detrimental to your sale in this buyer’s market.
Here’s the thing: this is a business transaction, a big one. So, let’s remove the personal feelings from the equation. Instead of going on the defensive, it’s in your best interest to try to work with these offers by coming back with a strategic counteroffer. If you don’t respond, the buyer may become offended, and they’ll move on to the next house –they have many choices!
Everyone is looking for the best deal, and an initial lowball offer is often a strategy. Adrian had a recent listing that received a lowball offer more than 10% below the asking price on a $2M+ home that was only on the market for 24 hours. The sellers signed it back at the full asking price, and the buyers accepted it. From the buyers’ perspective, there was no harm in trying. However, because we had some inside information, along with knowing we were priced perfectly, we stuck to our price and sold the house.
It’s a good idea to act on any offer right now, even if you don’t think the buyer will respond to your counteroffer. You never know. We’re experiencing a buyers’ market. Supply continues to pile up, and buyers have more leverage.
A Successful Strategy for Making Low Ball Offers on Real Estate
Much has to do with how long the house has been on the market. When a listing has only been listed for a matter of days, the seller probably won’t feel inclined to make a drastic reduction in the price. The other trick is to find properties where your odds of success are higher.
When making what would be received as a lowball offer, find ways to support your number. If you have evidence to support your position, the seller’s realtor may be more convincing when breaking the news. This could be recent comparable sales, other active listings, or leveraging recent media that may indicate a downward trend in the market.
At the end of the day, as a homeowner selling your property, do your due diligence. Consult a professional realtor, not just your brother’s best friend, Bob. Visit comparable homes and scrutinize recent sales to determine the value of your property accurately.