A seller’s worst nightmare is, needless to say, not being able to sell his home (it’s right up there with having his front yard designated as a Pokemon Go gym). But in addition scoring quite high on the would-be disaster list is receiving a lowball offer-as much as 10% to 30% below list price-from a purchaser who is in serious need of a reality check. So what’s up with that? Did the buyer not see the gorgeous kitchen you remodeled? Or even the beautiful landscaping in the backyard? What about the awesome home fitness center you built? Heck, this property is worth every penny that you’re asking for!
Stop, take a deep breath, and focus on the patch of blue in this stormy sky.
A lowball offer can lead to a successful sale should the seller plays their cards right. All things considered, you’re the one that ultimately decides whether to accept or reject the bids that come your way. To put it differently, the ball (or rather, lowball) is in your court. So take these steps to turn a bunt of an offer right into a home run.
Receive a Lowball Offer? How to Turn It Into a Home Run
First, don’t get insulted
Just because a buyer begins with a low offer doesn’t necessarily mean the person is trying to take advantage of you. She might be relocating to the area from a market where lowball offers are the norm, or where home values are substantially lower than they are where you live.
There’s a natural tendency to get upset when you receive a lowball offer, remember that the initial bid is a starting point. There’s usually room for negotiation, so I never tell a client to reject an offer outright.
Respond gracefully
A little gratitude-even if you’re not exactly thrilled with regards to the size of the offer-can do a lot.
It doesn’t do you any good to allow the buyer know that you believe their offer is rubbish. Responding in a negative tone could very well kill the deal permanently. It may sound like common sense-don’t piss off the buyer-but many sellers get caught up in their emotions. Place yourself in the buyer’s shoes: Would you wish to increase your offer for a rude seller? Most likely not. Thus, when sending the buyer your counteroffer, cushion your response. Try: “We greatly appreciate your offer and we’d love to work with you. Here is our counteroffer.”
Write a strategic counteroffer
Assuming you priced the property well, don’t feel pressure to drastically slash your selling price. Some people feel so eager to sell their home that their counteroffer is actually too low. It’s OK to give up some ground, but you don’t need to meet the buyer halfway. Offer the buyer a slight price reduction-$5,000 to $10,000 for a $300,000 home, or $10,000 to $20,000 for a $1 million home-and briefly explain your reasoning. You could provide information on the comparable properties that you used to determine your list price. Another option: We will draw the buyer’s attention to several of your home’s amazing features (e.g., your new energy-efficient HVAC system).
Expect a counteroffer to your counteroffer
Agreeing with a purchase price can feel like a chess game: You make one move and the buyer makes a countermove (in this case, a counteroffer). When a consumer comes in with a lowball offer, the buyer and seller might go back and forth for a while before both parties decide on a sale price. As a seller you need to remain patient throughout the process.
Negotiate other terms
Having difficulty deciding on a sale price? There are additional solutions to sweeten the sale in your favor. Dependant upon your timeline, you could potentially ask the purchaser for an earlier settlement date. If you’ve already purchased your future home, as an example, settling in 30 days as opposed to 45 days would reduce just how long you’ll need to carry two mortgages simultaneously.
You could ask the buyer for fewer contingencies. One that would help you save money: Persuade the buyer to make her home inspection contingency an information-only inspection, which basically ensures that you won’t be asked to make any repairs.
Another negotiating point: Have the buyer raise their earnest money deposit. This could give you greater assurance that the individual is serious about purchasing your home. As a seller, you typically want the purchaser to have more skin in the game.
The bottom line: No seller dreams of receiving a lowball offer, however with the right strategy you can turn a mediocre bid into a great sale.