The definition of a lowball offer when selling your house is different depending on the market. When the market is good, a lowball offer might be 5% below asking price, while in the current real estate market, 20% might be considered lucky. If you receive a lowball offer when selling your house, there are a few different things you need to consider before sending an angry letter.
Remove the Emotion
Sellers often respond angrily to lowball offers because they are insulted that someone who devalue their home, especially since they’ve cared for it lovingly for a decade or longer. The reality, however, is that buyers are not trying to be insulting when they make low offers; obviously, they are interested in buying your house.
When you start to receive offers on your home, try to remove your emotions from the equation. Don’t think of it as a personal attack on your beautiful abode, but a starting point at which to begin negotiations. You don’t have to accept lowball offers for your house; instead, you can counter with a more reasonable price in your estimation.
Do Your Research
Individual property values aren’t as important in a down real estate market than comparitive prices of other homes in the area. Check out the latest sales in your neighborhood and compare them to the price of your own house. It’s entirely possible that you’ve set the asking price too far above market value. What seems like a lowball offer might actually be more accurate than your own ideals.
Unfortunately, many home owners have been forced to entertain lowball offers to sell their houses. With the increased rate of foreclosures and the sheer volume of properties on the market, some homes don’t sell for years after they’ve first been advertised.
Determine Your Leverage
Knowing the buyer is almost as important as knowing the market when trying to sell your house. A lowball offer might very well be a jumping-off point from which you can raise the stakes. Some buyers assume that there will be ten rounds of negotiations before a price is agreed upon, so find out what your prospective buyer is looking for.
Buyers might be willing to increase their offering price if you throw in other incentives. For example, some buyers would jump at the opportunity for owner financing, and might be willing to pay more for that convenience. Other tactics include quick move-in dates, updated appliances and lower closing costs.
Increase Information Provided
Sometimes houses can’t be taken at face value, which is why it is up to sellers to advertise important information. For example, if you just rennovated your kitchen last year, buyers need to be made aware of that fact to avoid lowball offers in the first place. Make sure they know about updated appliances, new fixtures, recent construction and other attractive incentives to buy.
You’ll have to respond to lowball offers with as much grace as possible. You can either counter with another number or decline the offer altogether, depending on how insulting it was in the first place. It is also a good idea to communicate with your real estate agent to determine your options and potential avenues of sale, so don’t close doors before you have all the facts.