How to Handle Lowball Offers for your Home

Posted by Alex Narodny on Wednesday, March 15th, 2023 at 10:54am

It would be best if you always tried to get back as much of your initial investment in the home, both monetary and emotional, as possible when selling it. After coming up with what you believe to be a fair price, it is only normal to feel annoyed when a potential buyer submits a lowball offer. What's the meaning of a lowball offer in the real estate market? How to handle lowball offers when selling your home? That is entirely up to the sellers. Some people could accept an offer that is 20 or even 30 percent lower than they seek.

Nonetheless, some sellers would consider a lowball offer an insult. Real estate professionals often think a lowball offer is 20%-50% below the asking price. Is it wise for the sellers to accept these offers?

What lowball means in real estate?

You shouldn't have any trouble getting an offer for your house. In a buyer's market, in particular, sellers know that any offer they get will be lower than the asking price. That's how the game is played, after all.

Since it's hard to tell, how can you know whether a buyer's making a lowball offer? Unfortunately, there is no universally accepted definition of a lowball offer. Any offer below the seller's asking price can be seen as low, mainly if that amount represents the seller's absolute minimum acceptable offer.

In most situations, requesting a discount of more than 15% off the asking price is lowballing. Yet, that's not an excuse not to attempt it. Making a lowball offer might work in certain situations since it benefits both the buyer and the seller.

Types of lowball offer you can get

Feeling discouraged after receiving a low offer on your property is normal, but you don't have to settle for less than expected. The fact that you have received any offers is promising, regardless of how low they could be. There are many types of lowball offers when selling your home, but the following ones are the most common:

  • Personal buying lowballs offer
  • Lowball offers by investors
  • Extreme lowball offers both individuals and investors

Personal buying lowball offer

The client is in the market for a new home. They hope to get a good deal by making a low offer, but it's not because they can't afford it. Furthermore, the possible homebuyer wants to see how you react before buying the home at the increased price.

How to react to the offer?

What should you say in response to the offer? So, the seller should make a fair counteroffer. Irrational pricing can be avoided, and an honest discussion can begin if both parties are willing to put aside their ideals and start talking numbers. For this kind of potential buyer, this should provide a good reminder of reality.  You can safely respond with a reasonable offer since you will lose nothing if they refuse.

On receiving lowball offers when selling your home, always counteroffer your price.

Lowball offers by investors

Making lowball proposals on houses and other assets is standard practice for many investors. They are interested in the property as a financial investment and have no attachment. They expect you to be so financially unstable that you'll accept their offer (usually cash with fast closure) and leave.

How to respond to the offer?

You should accept the offer if you are a desperate seller who wants to get the money. Professionals from State to State Move always advise to think forward and rent storage. That is a crucial step for those selling a house like this. Additionally, moving in a rush can be challenging and requires units for storing your goods.

On the other hand, you can push them down a notch by counterattacking. You should always make a counteroffer if you don't want to accept the first offer when negotiating with investors, including a provision stating that the counteroffer is valid for 24 hours. That provides much-needed urgency for them to act quickly. Remember, because they are not purchasing a personal residence, the closing date does not need to coordinate with the end of their lease or rental agreement.

You can give a counteroffer with a time-limited period to create an urgent atmosphere for a potential buyer.

Extreme lowball offers both individual

A potential buyer could represent an individual or an investor. This real estate investor never makes bids beyond the asking price, even on foreclosed houses or properties that have been on the market for a long time. The prospective purchaser is not open to discussing the terms of the "take it or leave it" offer. In most cases, the buyer will ignore your counteroffers and look elsewhere.

Fortunately, this category is the least common of the three. You may not recognize this kind of client until after the event. Moreover, they are unlikely to care about anything but your signature on the original offer. On the other hand, if you're fortunate, the buyer's agent will mention that their client has already submitted many other offers. In other words, that is a clear warning that this deal isn't going anywhere.

How to handle this offer?

The recommendations, however, are the same. Always make a counteroffer if the first offer is not satisfactory. Due to rising prices and the resulting shift to a seller's market, there are fewer people than possible in the market looking to purchase right now.

Hire a real estate agent to handle lowball offers when selling your home

Maintain your composure when presented with a lowball offer. When selling a home, it's important to remember that you're dealing with a financial transaction. Leave your emotions behind. One of the advantages of working with a real estate agent is this very thing. An agent can act as a representative on your behalf in negotiations to help you achieve your goals. However, because this is what they do for a career, real estate agents are better positioned to negotiate a fair price for your house.

Respond to every bid with a counteroffer

Putting your emotions aside when dealing with lowball offers when selling your home is vital. You will come across many homebuyers that will buy you property for less money. It’s essential to make a counteroffer on any deal you are facing. Finally, dealing with any offer is better than dealing with no offer.

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