Responding to Low Offers

Learn how to respond strategically to lowball offers on your home and secure the best deal possible. Check current market value, always counteroffer, and be open to negotiating other terms to turn a low offer into a successful sale.

If you're planning on selling your home this spring, you need to be prepared to receive a lowball offer. Housing market activity has slowed since interest rates stagnated around 7%, but prices are still high in most markets due to low inventory. This has created a situation where many home buyers have warped expectations of what a good first offer on your home should look like, and you need to know how to respond. A lowball offer can be frustrating, but it’s crucial to think strategically when selling your biggest asset. Let’s discuss how to react strategically to a low offer and secure the deal you want.
Verify Current Market Value
First off, check the comps one more time. Before you deal with a lowball offer, double-check that it’s actually as low as you think it is. The housing market changes at a rapid pace, so ensure your home is still worth what you thought it was. You might even be pleasantly surprised. Some experts predict home prices to increase by 5% this spring.
Check comparable homes in your area to see where prices are trending. Also, ask your buyer’s agent if they reached their price based on their own comps. If you can prove home prices in your area are higher than they thought, they might be willing to increase their offer without much negotiating. Remember, the market ultimately decides the value of your home, not your asking price.
Always Counter Offer
So you check the comps, your home is still as valuable as you thought, and your buyer isn’t moving. What now? In my opinion, it’s almost always worth it to counter an offer unless you suspect the buyer isn’t acting in good faith. If the buyer rejects your counter offer immediately and insists on their lowball price, you can safely walk away knowing they were probably just fishing for a deal from unprepared sellers.
Compromise on Other Terms
One reason 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 deal breaker, I highly recommend at least hearing your buyer out. They might 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, shorter inspection period, or other contingencies waived, you might be willing to budge on price. 
If price is the main sticking point, consider 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 it’s necessary if you want to get the best deal possible for your home.

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