As a seller, getting an offer on your home is exciting, especially if it comes soon after listing your property for sale. But just because there’s an offer on the table doesn’t necessarily means it’s going to be a good one. Unfortunately, lowball offers happen, more often than sellers would prefer.
Obviously, you want to get the highest bid on your home and walk away with the most money in your pocket. But what happens if you’re lowballed? Should you throw the offer out or counter it?
If you choose to disregard a lowball offer altogether, you’ll have to wait until another offer comes in. Otherwise, you can consider countering the lowball offer in hopes that you’ll be able to get the buyer to inch their price point up towards what you are hoping to get.
Here are some tips to countering a lowball offer on your home.
Keep Your Emotions in Check
It’s easy to get rattled by a lowball offer on your home. This is a place that you cherish and one that you may have spent years raising a family and creating memories in. To have someone offer you a price that you believe is much lower than what it’s worth can be insulting and offensive. However, it’s important to remember that selling real estate is an emotionally-charged process that can often involve letting feelings get in the way of the end goal.
Rather than automatically getting upset with the buyer for offering a low price on your home, take a deep breath and don’t let your emotions get the best of you. Instead, consider where the buyers are coming from. Remember that this is not their home – yet. They haven’t built up the memories that you have. To them, it’s just a house with four walls. And while some buyers can certainly be callous with their lowball offers, others may not have any malicious intentions.
At the end of the day, it doesn’t matter what the starting point of the negotiations is. What matters is the end result.
Remember That You’re in the Driver’s Seat
Receiving a lowball offer on your home can definitely be unsettling, but you need to remember who’s really in control – you. Just because you’re lowballed doesn’t mean that you have to accept it. Remember that you are the boss when selling your home. Regardless of whether an offer you receive is a lowball or a strong one, you have the power to make the decision about what to accept and what to leave by the wayside.
Review All Other Terms of the Offer
The offer price is certainly a critical factor on an offer that you receive, but there are other terms on the contract that should be looked at before you lose your cool on a lowball price. Make sure you’ve looked over all of the buyer’s terms before tearing up the contract, such as the following:
• Closing date
• Deposit amount
• Requested repair credits
• Type of financing the buyer will be getting
• Down payment percentage
• Personal property to be included
It’s possible that most of these terms will be favorable and can help ease your mind about the offer altogether. Just keep these terms in mind when assessing the overall contract.
Reassess Your Asking Price
It’s possible that the offer you’ve classified as a lowball may actually be more in line with your home’s current market value than your listing price.
Before you even put your home up for sale, it’s critical that you list it at a competitive price that’s congruent with what the current market in your area dictates. Don’t price your home so high for the sole purpose of leaving some wiggle room for negotiations. Doing so will only scare off qualified buyers who would have otherwise put in a fair offer on your home.
If you do price over market value, some offers that you might get may seem far too low compared to your asking price, when in fact they may actually be closer to market value than your listing price.
If your home has been sitting on the market for quite some time, you might want to have another look at comparables in your area to see how much similar recently-sold homes in your area have sold for. The housing market never stands still and is always changing, which means prices can change right along with it in either direction. Maybe the listing price you’re at is no longer in line with today’s market.
As mentioned earlier, don’t just tear up a lowball offer right off the bat. Instead, consider countering it. You just never know where the deal will end up.
When countering a lowball offer, you’ve got some options as to how to respond. For starters, consider countering with the absolute lowest price that you’d be willing to take. This approach can help avoid countless back-and-forth bantering.
Another way to go about responding to the offer is by countering back to the full asking price. This will show the buyer that you are serious about the price you’ve listed your home at and are not interested in entertaining any offers that are not serious. Just keep in mind that this approach could potentially intimidate or discourage the buyer from carrying on with any further negotiations.
The Bottom Line
It’s important to understand that you may be able to effectively reduce the odds of getting hit with a lowball offer if you price your home right from the get-go. That said, if you do receive a lowball offer, make sure you keep your cool and respond with a counter offer that will be more likely to get you closer to a price you can live with.