Low-ball Offers: How to Keep Your Cool While Keeping Your Eyes on The Prize

It’s not personal, it’s business. It’s not personal, it’s business. When it comes to real estate, we all understand this but I guarantee, when you’re selling your home, it will feel very personal; especially when you receive a low-ball offer.

This very scenario happened to a friend of mine recently and as he vented his frustration on social media, I watched in horror as the comments rolled in from well-meaning friends and family. The avalanche of terrible advice inspired me to write this article; to share with you, dear future seller, some tips to keep in mind if you ever find yourself on the receiving end of the dreaded low-ball offer.

First, let me say that the feelings are normal. The most common reactions are anger and defensiveness. The most common desires are to either ignore the offer completely or to counter back even higher than your asking price, just to make your anger clear. I urge you to hold the line until you’ve considered a few points.

1.   It’s only a lowball offer if your house is priced correctly. This is a hard truth and I can feel the anger flags flying already, but just make sure that you (and your agent if you have one) are using relevant and current sales data to base your listing price. The numbers don’t lie. If you have simply increased your purchase price by how much you invested in the home, used the listing price of the home down the street, or listed for the amount you would need to satisfy your mortgage and other selling expenses, it is entirely possible your home is over-priced and an informed buyer has little choice but to offer less.

2.   You don’t know the buyer’s circumstances. It is possible that this is the best offer the buyer can give. Perhaps they were over-reaching when they looked at your home and fell in love. Perhaps they are not disregarding the value of your home, but rather playing a long-shot. This is even more likely if the buyer doesn’t have an agent representing them; many do not verify their purchasing power with a lender before house hunting. It’s also possible if the buyer doesn’t have an agent (or has a bad one), that they have not seen the comparable sales data to understand the value of your home. Worst of all, an uninformed buyer may be operating on some bad advice to always offer a certain percentage below asking for an initial offer.

3.   The buyer doesn’t know your circumstances either. Some sellers are more desperate to move than others. A buyer may be testing out how rushed you are to get to the closing table and while this definitely feels insensitive, you can’t blame them for trying. Or maybe you can…

So, what should you do if you receive a lowball offer?

First, revisit your comparable sales data and verify your home is correctly priced. If your home has been on the market a few months, double check that the data are still accurate as the market may have changed. If the buyer has an agent, ask to see the data they used to justify their offer. It may be that they are approaching something differently. Areas such as basements or additions can be confusing when it comes to price per square foot, for example.

If you’re firm your price is correct, take a deep breath and consider a counter offer; especially if you have not received any offers in a while. Remember, the goal of listing your house is not to win, but to sell for the best possible price. Don’t let a potentially viable buyer slip away over pride. Counter back at the price your home is worth and go from there.

Lastly, turn to your agent to vent your frustrations rather than taking advice from social media. Keep in mind that real estate laws and customs vary from state to state so input from friends scattered across the country may be incorrect, as well as almost always, emotional.