Low Ball Offers: How to Respond When You Get a Low Ball Offer

The Guide to Dealing With LowBall Offers in Real Estate

The definition of lowball offers is to provide a deceptively low price or unfairly low offer. It can be frustrating to deal with a lowballer as a home seller.

Do you know how to deal with a lowball offer on your home? The current real estate market strongly indicates how likely you will get a lower offer.

Lowball offers tend to happen far more frequently in buyers’ real estate markets. Potential buyers often believe they don’t have to make a higher offer.

Even in a buyer’s market, that is sometimes not the case. In a seller’s market, you’re far more likely to get an offer over the listing price than a lowball.

Most real estate professionals and home sellers have their sights set on a price that’s considered reasonable.

It can be upsetting when the low-ball offer comes in, but it doesn’t have to be. The fact that someone wants to buy your home is good, and you should deal with every offer – unless it is entirely ridiculous.

What’s Considered a Lowball House Offer?

The answer depends on the current state of the housing market. A bid 1o percent less than the asking price in a buyer’s market could be considered a lowball offer.

The price range of the home could also be a factor. A lowball could be considered much different in a seller’s market, where constant bidding wars and homes are selling over the asking price.

Anything under the asking price could be considered a lowball house offer.

The number of days the property has been on the market could also influence a buyer’s decision to make a lowball. Homes that have been on the market for a substantial amount of time are prime candidates for a low offer.

Lowball Offers Can Turn Into Home Sales

Negotiation is how selling a home works; lowball offers are better than no offers. A lower offer can turn into a reasonable offer relatively quickly. Maybe it will even turn into the perfect sale. The chance of a higher offer is something every seller should consider before emotions take over and slam the door on prospective buyers.

Getting lowballed sucks – no doubt about it, but the story can have a happy ending.

Before you are done reading, you will see how to handle a low-ball offer on your house by following the advice provided. Sometimes, a lowball offer will turn into a sale you never expected.

Working as a real estate agent for the past thirty-eight years, I always tell my clients that it’s not where a buyer starts their offer but where they finish up.

Numerous potential buyers over the years have made an initial lowball offer only to come to terms with the range where the seller expected to sell the home.

Handling Lowball Offers on Your House

Control Your Emotions When getting a lowball offer

Selling a home can be surprisingly emotional. You may have spent years living in your house, raised a family, and done a ton of renovations. All of this can make the place seem like a treasure instead of a piece of real estate.

When you sell, though, it is time to leave your emotional attachments at the door. You are engaging in business, and it is a business of negotiation. The first person to lose their cool is the one who loses.

This may be a hidden opportunity, so remain calm and deal with the offer appropriately. A few years ago, I was selling a home in Hopkinton, Massachusetts, and the homeowner received what would be considered a lowball offer.

The seller’s immediate reaction was one of disgust. Of course, this is a normal reaction that numerous Realtors have to deal with. The homeowner wanted me to tell them to leap off a bridge, as you can probably guess.

Cooler Heads Usually Prevail

They wanted me to counteroffer back to the buyer over the asking price. Taking their emotions to the extreme, they tried to use the “I’ll show them” mentality. Instead, I asked them to take a deep breath and not act the same way the buyer did.

As a listing agent, one of my functions is to provide sound negotiating advice.

I tell my seller clients to remain calm, cool, and collected. It doesn’t matter where a buyer starts with their offer. What matters is where they end up! As a real estate agent with years of experience, there are times when you can tell that the sale stands a strong chance of coming together even though the buyer has made a lowball offer.

Other times, you know it won’t. This was a case where I was pretty confident it would end up coming together, and it did. The buyer happened to be a first-timer getting bad advice from their parents.

While most parents’ intentions are good, many think they are real estate or negotiation experts. Rarely is this ever the case, and the parents could have cost this buyer purchasing their dream home. Ultimately, it worked out because I convinced the seller to treat the sale of their home as a business transaction and nothing more.

The buyer of this particular home initially offered $70,000 less than the asking price on a house priced well. The initial counter we made to the buyer was $5000 less than asking.

Send a Clear Message When Receiving Lowball House Offers

The firm pricing stance sent an unmistakable message to the buyer, saying we are not desperate. The listing price is fair. We want serious offers from a serious buyer.

The home ended up selling for $15,000 less than asking, which was in line with the seller’s expectations. The seller followed my advice to a tee and got what they wanted.

Does this happen in every circumstance with lowball offers? No, of course not. However, you are much better off not to put the kibosh on your sale by acting with emotion.

Home Buyers Should Avoid a Bad Negotiation Tactic

From a buyer’s perspective, the last thing you want to do is insult the seller with a lowball offer.

More than likely, the house you have set your sights on is something you want. You don’t want to get off on the wrong foot with the seller and completely blow your chances.

Most buyers forget the seller may have lived in the home for years. It is a place where lasting memories have been built, like kids’ birthdays, first children, opening toys at Christmas, and numerous gatherings with friends and family.

At this point, you may think of it as just another house; to a seller, they think of it as “home.” Never underestimate the emotional attachment homes can bring.

While the goal of any buyer who makes a low-ball offer is to get a great deal if you have no deal at all because you have royally pissed off the seller, where will that leave you!

Sometimes, The Buyer’s Agent is Out in Left Field

At times, the buyer’s agent may give their clients bad advice. Over the years, I’ve seen plenty of occasions where the buyer’s agent wants to be the hero. To get their clients the best deal, the starting point of the buyer’s offer doesn’t make sense.

The seller’s and buyer’s agents should conduct a comparative market analysis to determine the appropriate market value. It’s a bad idea for a buyer’s agent to offer a low price to get a good deal intentionally.

Trying to gain the upper hand deceptively could backfire and cost the buyer the home they want. Unfortunately, the buyer’s agent sometimes doesn’t know the local housing market and uses poor real estate comparables to determine value. Similar properties should always be used in a market evaluation.

Doing so can lead to a price range that doesn’t make sense.

Home Sellers, You Are In Control

It would be best to remember that you’re in control of selling your house. You don’t have to accept any offer you don’t want to.

Granted, you may be under some deadline – you found another home you want to buy – or you may need the money. Circumstances are different for everyone. But you do not have to say yes to any lowball offer you don’t want to.

Make a Counteroffer

There are several reasons why a person could offer you an amount much lower than you are willing to accept. Buyers are sometimes worried that they will pay too much for a home, and they make low offers initially as a customary gesture.

They are interested in your home and want to get the negotiations going without committing too much. It’s a sound reason you don’t want to get worked up over a low initial offer. A higher price could be coming in the form of a counteroffer.

Another thing to remember is that some cultures teach you always to negotiate. Your home could be the best value in town, but that doesn’t necessarily mean the buyer will start the negotiations where you want them to.

It is possible the buyer could not be listening to their Realtor instead of looking at a Zillow estimate of value. While most Real Estate agents understand the chances of Zillow pegging a real estate value accurately are as good as seeing bigfoot in your backyard, buyers do not.

Instead, they rely on data that is entirely out in left field.

When you are confident you have priced your home correctly, this is when you want to hold the line very close to your asking price. Often, sellers will put a little cushion between their home’s list price and, ultimately, where they expect it to sell.

For the same reason, the buyer is bidding low because they probably expect to meet somewhere in the middle. When you want or need to sell, meeting in the middle makes everyone feel like a winner.

What Are Your Choices?

1. Do nothing and tell the buyer the offer is insulting.
2. Counteroffer over asking price.
3. Counter with something minimal.

When dealing with a low offer, choice #3 is the best course of action in most circumstances. So when a client asks if I should counter a low ball offer, the vast majority of the time, the answer is YES!

The first two choices are confrontational. They make you feel better in the short term but don’t accomplish the desired goal of selling your home.

You know you are wasting your time if you have countered with something minimal and the buyer does not come up substantially. At some point, you’ll know getting lowballed was the buyer’s plan to fish for a deal too good to be true.

Review The Other Terms of The Low Ball

The home’s purchase price is not the only thing essential for you or the buyer. There could be other terms to evaluate.

As stated earlier, you may want to sell the house quickly because you are buying another home you want.

If this is the case, a buyer willing to close quickly may be worth catering to, even if it is for a slightly lower price than you want.

There are other factors at play besides price. Review your goals and decide if it’s worth lowering your asking price.

Here are some reasons that could make one offer more appealing than another besides price:

• A preferred closing date.
• A rock-solid mortgage pre-approval letter from the buyer instead of a pre-qualification.
• The buyer is making a larger down payment.
• A buyer is paying cash, so there is no mortgage contingency.
• The buyer has fewer inspection contingencies or other real estate contingencies.

Look at The Comps Again Before Ruling Out The Offers

Is the offer you have received a lowball? Did your real estate agent suggest a different list price, and you didn’t listen?

The comparable listings may have changed depending on where you are in your sale since you set your initial price. The price of homes goes up and down constantly, and your asking price may no longer be competitive.

The buyer may also have a list of comps you want to review. In buyer’s markets, market values can go down quickly.

There is no point in blindly insisting that the price you set is the only reasonable price for the property.

How other similar homes are selling right now is an essential indicator of how much you can sell your home for. Maybe the price the buyer suggested isn’t a lowball offer?

Sometimes, you may not be able to get a better price. The best offer may be sitting in front of you.

In the example I shared above, the home had just come on the market, so I was highly confident in the value provided to the seller.

How to Get Low Offers Raised

We got the buyer to come up substantially from their original offer to provide them with comparable sales data. The buyer’s agent was not from the area and did not know the town as well as I did. I could easily share how the home’s market value was determined.

Neither the buyer nor their agent understood the differences of one neighborhood to the next, which plays a substantial role in a property’s value. Location is one of the most critical factors in appraising a home.

All comparable properties sold in the area had very narrow list price-to-sale price ratios.

I made sure this was pointed out to the buyer’s agent. The market dictated that homes were selling reasonably quickly and going close to asking prices.

If your home is overpriced on the slip side, a buyer who makes an offer substantially under the list price is not a low-ball offer. They offer what they feel is the actual market value or close to it.

Today’s home buyers are pretty astute, so they will know if your home has been on the market for months longer than the time it takes for the average property to sell in your area.

Most buyers know how to tell if a home is overpriced.  If you have had tons of showings on your property and it has been on the market for quite a long time, you might want to consider why that is the case.

Look to Your Agent For Advice on Dealing With Undesirable Offers

This is part of why you hire a Realtor. You want a team member who is willing to negotiate and get you what you want. The Realtor does this for a living, so they are best suited to get you top dollar for your home.

Let the agents discuss the deal together and see where you wind up. It may be that your Realtor is the key to getting you the value you want for your house.

One thing to remember is that not every agent is equipped to keep their emotions in check.

You don’t want an agent that will act emotionally any more than you would wish to yourself. Unfortunately, some Realtors relish “the drama” of selling real estate.

You don’t want a drama queen as part of your negotiating team. The level-headed agent is the Real Estate professional you want in your corner.

Final Thoughts

A skilled real estate agent should never overreact to a lowball real estate offer. It should be business as usual.

The agent’s job is to get you the most money with the least hassle so you end up at a closing table! The bottom line is every real estate transaction is different.

As a homeowner, keeping up with the market trend is a good idea to know if you’re making the best decision.

Hopefully, the best way to deal with a lowball offer on your home has become clearer! By keeping your emotions in check, you can make much better decisions if lowball offers come your way.

Additional Resources on Negotiating and Selling a Home

• How to negotiate the purchase of a home, car, or other items of consideration by Wiki How.
• Some of the best home-selling tips money can buy via Maximum Real Estate Exposure.

Use these additional helpful resources to keep your emotions in check and negotiate the best possible sale price for your home!

About the author: The above Real Estate information on how to deal with a lowball offer on my home was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for 35+ Years.

Are you thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.