Are you upset when you receive a low offer? When an aggressive low-ball offer comes through, often the first reaction is for you to feel insulted. Don’t. Low offers are commonplace. It comes with the territory. A low-ball offer doesn’t necessarily mean the buyers aren’t serious. Buyers have a way of moving up in price and the result is often a deal acceptable to both parties.
Why Do Buyers Make Low-Ball Offers?
There are many reasons buyers make low offers:
1. Many buyers come in low hoping to meet somewhere in the middle. This is one of the most common strategies of a buyer. Remember that it’s not where the price starts, it’s where the price ends up.
2. The buyers may not be educated in the market. Perhaps they are from an area where the market is different and it is more of a buyer’s market. It is up to the real estate agent to educate them and provide comps to show them where the market is at.
3. Some buyers may just want to see if you are willing to get rid of it and get it over with. This is another common technique with buyers. Please remember that a realtor’s job is to present all offers. Don’t shoot the messenger.
What Are Tactics of Working With a Low Offer?
A seller has 3 basic options for a low-ball offer: accept, reject, or counter. Accepting the aggressive low-ball offer is not normally the logical choice. There may be times when the seller is subject to extreme circumstances, but this is a rare exception. Even if the low-ball offer is accepted, getting to closing could still be difficult with all the negative emotion.
Below are some common tactics of working with a low offer:
1. Provide comparable statistics. The best negotiation defense to a true low-ball offer is a credible list price that can be defended by the market data and/or logical reasoning. Showing the buyer comparable sales that justify the listing price is key.
2. Counter back at your bottom line. This will show the buyer that you made a significant price drop. If the buyers counter back with a higher place, stand firm. You have already made a significant price drop and that shows that you are willing to negotiate but cannot go any further.
3. Use your listing agent. One way to reject a low-ball offer is for the listing agent to communicate to the buyer’s agent, “My seller will respond to a reasonable offer from your buyer but not an unreasonable offer that cannot be supported by the market data.”
4. Countering with a price that is slightly lower than asking can be an effective approach as it signals that the seller is willing to negotiate, but not willing to give the home away. The seller’s agent must communicate to the buyer right away that the low-ball offer is not even in the realm of possibility to ensure that the buyer does not hold out false hope.
5. Always counter an offer. If it is a low-ball offer, counter high to see if they are willing to come up. If they don’t respond, then you know for sure they weren’t serious in the first place.
Try your best to keep your emotions out of it. Any offer is better than no offer and can be dealt with. Putting a written counter in front of a buyer gets a stronger response than any verbal tactic.