What is a lowball offer?
A lowball offer is an offer significantly less than asking price and/or an offer price lower than the market value of a property.
From a seller’s perspective:
Low ball offers are insulting. In today’s market, your property has been on the market longer than anticipated. Some of your neighbors are sharing stories of how quickly homes sold 6 months ago and other neighbors are listing their home lower than your asking price, driving your home price down. Already frustrated by the lack of showings, you finally receive an offer. And it’s for less than any home has sold for in your neighborhood in 5 years. You are furious. What do you do?
Allow yourself to be frustrated and then check your emotions before replying. As a real estate agent, I’m legally obligated to present all offers. To help, I will call the buyer’s agent and try to get a feel for how serious the buyers are. Please remember, it’s not how an offer starts, it’s how it finishes. I’ve helped negotiate offers that were way out of line to near asking price. There’s also more to an offer than price. Accepting an offer considerably less than asking but with great terms and a quick close can be desirable based on your situation.
One of the most important things to do as a seller is to keep your cool and reply from a position of strength. If you are priced correctly based on the market activity, reply back with a reasonable counter. If they don’t want to pay a reasonable amount for your property, they’ll move on to the next house and make another lowball offer. If they do want your house, they’ll negotiate. Every offer is an opportunity.
From a buyer’s perspective:
Offering less than asking price for a home that has aged on the market and is priced outside of the current market range is smart. Offering less than any home has sold for in years is potentially insulting. Many sellers will not only refuse to counter your offer but refuse to negotiate with you even if you adjust your price. If submitting lowball offers is your strategy, be prepared to submit a lot of losing offers and be prepared to have successful agents refuse to work with you. To assist buyers make a decision on what is a good offer, I identify comparable sales, project where prices are going due to market activity and consider the other terms of the proposed offer: financing or cash, As Is or an extended Due Diligence period.
Buyers can experience significant savings by offering the right price with the right terms to folks who are fatigued with today’s changing market. I love helping buyers lock in a great price. Our current market will reward a cash buyer who offers great terms with a lower price. I am happy to help talk through your strategy to avoid a low ball offer slamming the door on your deal.
Are you thinking of buying or selling in today’s market? Please contact me and let’s talk through your circumstances and your goals. I would love to help you make the best decision for you and your family!