Selling a house is a uniquely personal experience. It had been your home once, even if for a short time, and a witness to a very specific period of your life. Now that you’ve renovated the bathroom, kitchen, and yard, it’s sure to fetch a high price from the right buyer.
That’s the theory, anyway.
But then an interested buyer sent a low ball offer so insulting, it surely must be a mistake. You aren’t likely to encounter these in a seller’s market, and if you did, it’d be easy to toss it aside. No, someone sent you a low ball offer and it’s your only offer.
So what do you do? Well, with the right moves you can turn a low ball offer into something acceptable for both parties. Follow this guide to learn everything you need to know about negotiating low ball offers.
1. Don’t Take It Personally
If you aren’t swimming in offers, it’s never a good idea to brush one off — even if it’s not currently to your liking. Some sellers make the mistake of taking personal offense. After all those renovations, someone had the gall to submit a bid 20% below the asking price?
Yes, they did. Rather than ignoring the low ball offer and cutting ties with the buyer, take advantage of the situation. Tell the bidding party that you’re happy for the bid, but you can’t accept it as it stands. This leaves flexibility for a negotiation that may, in turn, lead to a happy outcome.
Remember that you’re trying to sell the home. Cutting a buyer out of the running doesn’t help you accomplish this goal.
In fact, many buyer agents always suggest an offer under the asking price when the market is in good shape. Do they expect to get what they’re asking for?
Not at all. It’s an attempt to swing things in their direction. If they offer a bid that’s 20% under the asking price, it makes a 10% discount seem like a serious concession.
2. Return With a Better Offer
While a counteroffer isn’t necessary, it can start steering things in your favor. The trick is to provide a reasonable price point, even if it’s far different than the one they provided.
What’s reasonable? That’s up to you.
A good real estate counteroffer should be the lowest you’re willing to go and finalize on the sale. If you offer them something for less, you’ll be in negotiation limbo and likely never come to an agreement as you try to reach what you’re okay with.
This suggestion assumes you’re flexible about the asking price.
If the market in your area is in good shape, you can afford to wait for a better offer. That’s why some agents would argue that you counteroffer for the original asking price. This tells the buyers that you’re firm and not willing to negotiate for anything less.
This will scare low ball buyers away in most cases. Make sure you’re willing to wait for another bid before opting for this approach.
3. Evaluate Your Asking Price
Competitive pricing is only competitive for so long. Local housing markets are constantly in flux.
Many agents reduce the listing price quickly, just after one or two weeks. If your price is unchanged for a few months, it may be completely unaligned with surrounding homes.
Ask the bidders what made them propose an offer that’s well below your asking price. This isn’t supposed to grill them.
It’s an attempt to come to an understanding of their position. If this is the only offer you’ve received so far, there’s a good reason for it. You may discover that buyers are concerned about the roof that’s in need of replacement, so they aren’t willing to meet your price request.
But if the buyer’s agent suggests your home is overpriced, it’s time to re-evaluate. Ask the agents to go over their comparable price list. If an agent lacks experience with a certain neighborhood, their projected price could be flat-out wrong.
Otherwise, recent market changes may demand that you lower your asking price or take the home off the market until things turn around.
4. Look Beyond the Price
Selling a home is a complex process. It’s easy to focus on the sticker price and disregard everything else. But cold hard cash isn’t the only way to sweeten a deal when you’re trying to negotiate for something favorable.
Be open to lowering your asking price. In return, you can request a variety of concessions that can effectively raise your compensation.
Like what? Ask for a shorter closing date if you’ll avoid another mortgage payment. With one simple change, you’ve already saved a thousand dollars or more.
If you think your old home may have some undiagnosed damages, you can also ask the buyer to waive the inspection contingency or make it information-only. This means the inspector will alert the buyer of anything in need of repair, but they won’t be able to negotiate them.
Convert a Low Ball Offer Into a Great Sale
By ignoring a low ball offer, your property could end up on the market for months and cost you in mortgage payments and declining real estate value. That’s not ideal.
That’s why you should always give low ball offers the time of day even if many buyers are willing to pay more. They could always drop out before closing on a sale. A little strategic maneuvering is often all it takes to facilitate a negotiation that works for both parties.
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