If you’re planning to sell during the current market, it’s important to be prepared to receive a lowball offer. Housing market activity has slowed since interest rates rose, and prices are still higher in most markets This has created a situation where many homebuyers have warped expectations of what a “good” first offer on your property should look like, and you need to know how to respond. I know a low offer can be insulting, but it’s important to think strategically when selling your biggest asset. Today, I’ll go over how you should strategically react to a low offer to ultimately get the deal you wanted all along.
- Check the comparables one more time. Before you deal with your lowball offer, double-check that it’s actually as low as you think it is. The housing market changes at a rapid pace, so make sure your property is still worth what you thought it was. You might even be pleasantly surprised if the price has gone up. Check comparable homes in your area to see where prices are trending. Also, ask the buyer’s agent if they reached their price based on their own comparables. If you can prove home prices in your area are actually higher than they thought, they might be willing to increase their offer without much negotiating. Remember, the market ultimately decides the value of your property, not your asking price.
- (Almost) Always counteroffer. So, you’ve checked the comparables, your property is still as valuable as you thought, and your buyer isn’t moving. What now? It’s still always worth it to counteroffer unless you suspect the buyer isn’t acting in good faith. If the buyer rejects your counteroffer immediately and insists on their lowball price, you can safely walk away knowing they were probably just fishing around for a deal from unprepared sellers.
- Compromise on other terms. One of the reasons why your buyer may have offered a lowball price upfront is because they don’t have enough money to offer the full asking price. While many sellers see this as a dealbreaker, I highly recommend at least hearing your buyer out. Chances are, they’ll be willing to give you great terms on other negotiating items to make up for their lower price. For example, if you need a longer close, a leaseback, shorter inspection period, or other contingencies waived, you might be willing to budge on price. However, if price is the main sticking point, we recommend offering something like covering the buyer’s closing costs or buying down their interest rate to free up cash.
Dealing with lowball offers isn’t fun, but if they come in, it’s important to react with logic and not emotion. If you have any questions about our market or lowball offers, please contact us!
