How to Respond to a Low Offer on Your Home for Sale
Your home is on the market for sale. You have diligently prepared it with your agent – it looks great, you have your disclosures and inspections in order, and you are excited to sell it and move on. Then out of the blue, you receive a low offer. A very low offer. What should you do?
Put Emotions Aside
The very first thing — and the most difficult — is to put your emotions aside. It can be really disappointing and even infuriating to receive a low offer. However, this is what you have hired a real estate agent for — to not only provide strategic counsel, but also to act as a calming influence and buffer emotions between the two parties during what can be very tense negotiations.
A common response is “That offer is an insult! They don’t deserve this home! We won’t even dignify that offer with a counter offer!” Again, this is an understandable reaction to a low offer on your home, but most always it is the wrong approach. If you walk away from the negotiating table, you may never know what might have been. Was the buyer testing you but willing to come up? You will never know if you don’t counter the offer.
I always tell sellers to try and turn a low offer into the offer you want to accept.
Always Counter a Low Offer on Your Home
I advise my sellers to (almost) always counter a low offer, even if they counter at the full asking price. Why? Because it “keeps the ball in play” and allows discussion to continue. I cannot tell you how many times I have seen a low offer turn into an offer the sellers were happy to accept, surprising both the sellers and me.
You never know where the buyers are coming from. Perhaps they are working with an inexperienced agent who has not educated them on the value of homes in your area. Or perhaps they think making a low offer will induce you to “meet in the middle” between the selling price and the offer. It is best not to try to second-guess their position and instead be clear on yours and on what you are willing to accept for your home. I have found that when a response or counter offer is formalized and put in writing it can change the nature of the negotiations and increases the seller’s chances of a positive outcome.
Think of a Low Offer as the Beginning and Not the End to a Conversation
I can’t tell you how many times I have heard “It’s too much trouble to write up a counter.” I always tell my clients that I am happy to take the time to prepare a counter because you never know where it will lead to. It is almost always in their best interest to counter a low offer and watching after my clients’ best interests is my #1 priority.
Many great conversations begin with a question instead of a statement. Think of a low offer as the beginning and not the end of the negotiation. Yes, there are times buyers will come in with a “low ball” offer and not budge, but in my experience that is often not the case.
Also, the fact that an offer is in play and not yet agreed upon may encourage other circling buyers to step up to the plate, and in some cases you may end up with multiple interested parties if it is a seller’s market or the property is highly desirable.
The Market — Not You — Ultimately Determines the Selling Price
Remember when selling your home that the market — and not you — determines the final selling price. No amount of fancy photography or advertising is going to sell an overpriced home and that low offer may be telling you that your pricing needs to be adjusted.
It is important to take into consideration how long your home has been on the market, what the competition looks like, and even where the economy is headed.
Success Means Turning a Low Offer into a Sale
Sometimes a low offer on your home is just that — and the buyer will move on if it is not accepted. However sometimes – and I would say often – the buyer will move on their pricing if the seller shows some flexibility on pricing or terms and a deal will happen.
Helping clients respond to low offers and providing counsel is what we real estate agents do best, and one of the many ways we add value to what is often the largest financial transaction of our clients’ lives. If I can be of assistance in helping you attain your real estate goals, please call or text me at 415-847-5584.