Are They Serious? How to Respond to a Low Ball Offer on Your Home
It’s exciting for any Waterloo Region home seller when their real estate agent calls and says that an offer to buy has been made on their property. What’s not as exciting is when the sellers actually get to view said offer and it turns out to be almost the last thing they wanted; a low ball offer. But it’s an offer nevertheless and it has to be dealt with and responded to. So if a low ball offer comes your way how should you react and what should you do? Here are some tips from ‘the battlefield’:
Why Do People Make Low Ball Offers in the First Place?
A potential buyer may have made a lower than desired offer for a number of reasons, and not just because they are ‘cheap.’ These could include:
• They like the home but they just do not see the value that you see • They are planning to move in to your neighbourhood from out of the area and where they are coming from homes comparable to yours simply cost less • They are badly advised first-time buyers whose well meaning family and friends told them to start low so they did. • They are trying to feel out just how eager you really are to sell
Often a home seller’s gut reaction to a low-ball offer is to be insulted and angry. But take a few minutes to calm down and think. Why? Because there are ways that sometimes even the silliest low ball offer eventually becomes that great deal you were looking for all along.
Control Your Emotions
It wasn’t an easy decision to sell your home. You spent endless hours weighing up the pros and cons of moving on before deciding it was a must. You then spent lots of time and more than a few dollars to stage and prepare your home for sale. Then you receive what appears to be an insultingly low offer. No wonder your gut reaction may be to get angry.
While these reactions are understandable, it is important to remember that while selling a home is emotional it is also a business transaction and emotions are best kept in check. Take a deep breath and focus on your original goal. Ultimately that is getting the best price for your home as quickly as possible. While a low-ball offer is frustrating it might end up being the beginning of a negotiation that results in you selling your home the price you wanted.
Go on a Fact Finding Mission
The next step is to get a hold of your Realtor and work with them to determine the following:
Is the buyer serious?. Is the buyer qualified? (does he/she have a pre-approved mortgage?) Is the buyer open to a counter offer that reflects the true market value of your home? What should the counter offer be to keep the negotiation rolling?
One of the best negotiation strategies when responding to a low-ball offer is countering the offer to your lowest and final price that you’d be willing to accept. This eliminates lots of back and forth. They will see that you are taking them seriously and that a sale looks promising. They may even see themselves moving in! They may respond with another lower offer and at this time you inform them it is the bottom line price.
This isn’t an easy process. It takes knowledge and experience to get it right. That’s why working with a good real estate is essential. They have that knowledge and can be the key to turning a low ball offer into a great sale.