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Low Ball offers for real estate just comes with the territory. Should they be dismissed altogether? Should the seller get angry or insulted? I say no. A low ball offer doesn't necessarily mean the buyers aren't serious. So I'm going to offer a little advice to home sellers.
Even as the market is turning in the seller's favor I believe low ball offers should not be dismissed entirely. Low ball offers are better than no offers at all. There is a right way and a wrong way to handle them. The buyer may be making a low ball offer because that is all they can afford. If that is the case, then shame on the buyer's agent for letting them waste everyone's time. More likely the buyer is fishing or testing the seller. I disagree with the strategy but it still must be dealt with. The seller may think theses aren't serious buyers and likely want to refuse it outright. Now Why not dismiss it altogether?[link deleted by Zillow moderator.please see our Good Neighbor Policy for posting guidelines]
If you've only had it on the market for a couple of weeks it seems too soon to take a low ball offer. I don't believe I'd counter at all, if I did I suppose I'd counter with asking price or just a little below. I am assuming it is priced to sell already. If it's not you should still lower the price before dropping way down to a low ball offer. There might be another buyer out there that is close to your asking price but doesn't see it in their search results because it's just over their limit.
Why buyers start with a low-ball offer: Just because buyers bid low doesn't mean they're trying to steal your property. They:
* may not see the value as you see it.
* could come from an area where comparable homes cost significantly less.
* could be from a market where overpricing or large reductions are common.
* are comfortable with aggressive negotiation.
* may be first time home buyers and everyone tells them to start low.
* want to see if you're at a point where you want to just get it over with.
How to respond:
When buyers give you a low-ball offer, let them know you'll get back to them shortly. Then call back in a few minutes, or if it's an in-person situation, confer with someone briefly, even if you have to feign a serious call with your mother-in-law. This gives the impression that you did think about it and that you're not just coming back with an automatic rejection.
Now tell them that you like them as buyers, but that you really would like to have an opening offer that "you could consider more seriously."
If questioned about the value, educate your prospect. Show them comparisons and why it is priced where it is. Also be sure to find out where they are coming from–both figuratively and in their offer. If they are indeed moving in from another area, perhaps the housing market there is considerably different.
If they are earnest in their purchasing aspirations, this will stop them from coming back with just a little higher offer and look foolish. It also tells them that you're not a desperate seller.
If their initial offer was really low, another response is to say, "I'll counter at xxx,xxx (come down $1,000 from the asking price) so that you know that I'm willing to negotiate, but I really would like to hear a more realistic figure."
These techniques are more effective in achieving your goal of selling than simply blowing off the buyer. It doesn't do you any good to let them know how you really feel about their offer and embarrass a potentially good prospect.
Experienced real estate agents have an advantage when they respond to a low-ball offer; they remain objective. They don't get emotional or personally involved in the offer. Strive to remain cool and keep focused on selling your home with counter offers that will get your home sold.
"This is all we can afford"
Do not give in to this attempt to pull on your heartstrings. Simply respond with, "I'm sorry, but it's worth more than that." If you can't take their "poor me" approach, come back with your own, "This is how much we have to have in order to move" counteroffer.
Point out how they could get some family member to help provide additional down payment, look into a longer term loan (40 year) with lower payments or a lower rate with an adjustable mortgage.
See if they will give you the name of their lender. Let them know that you'd like to contact the lender and see what it would cost you to buy down the interest rate for a period (one–two years). It would have to be enough to lower their monthly payments to a level acceptable to the lender, but at a higher price on the home to offset this expenditure (the buy down). The lender will be willing to work with you since they have a potential loan to make.
If they really want the house, they'll seek alternative help. Don't fall for the buyers' pity-me overtures. If their low offer truly is all they can afford, and it's not realistic, then they should not have been looking at your home in the first place. After all, real estate taxes, homeowner's insurance, utility costs and ongoing maintenance expenses will also not fit in with their financial situation.
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