A few steps you can take to negotiate a great deal with lowball offers.
If you plan to sell your home this spring, be prepared to receive lowball offers. Housing market activity has slowed down since interest rates stagnated around 7%, but prices are still high in most markets due to low inventory. This has created a situation where a lot of homebuyers have warped expectations of what a “good” first offer on your home should look like, and you need to know how to respond.
I know that a low offer can be insulting, but you need to think strategically when selling your biggest asset. Today, I’ll go over how you should strategically react to a low offer to ultimately get the deal you wanted all along.
1. Check the comps one more time. Before reacting, double-check that it’s actually as low as you think it is. Market conditions can shift quickly, so make sure your home is still worth what you thought it was. You might even be pleasantly surprised—some experts predict home prices to increase by 5% this spring.
Check comparable homes in your area to see whether trending prices are up, neutral, or down. You can also ask your neighbor’s buyer’s agent if they based their price on their own comps. If you can prove home prices in your area are actually higher than they thought, they might be willing to increase their offer without much negotiating. Remember, the market ultimately decides the value of your home, not your asking price.
“Always double-check the comps—you’ll never know what you find!”
2. (Almost) Always counteroffer. After checking the comps, you find out that your home is still as valuable as you thought, and your buyer isn’t moving. What now? In my opinion, it’s always worth it to counteroffer unless you suspect the buyer isn’t acting in good faith. If the buyer rejects your counteroffer immediately and insists on their lowball price, you can safely walk away knowing they were probably just fishing around for a deal from unprepared sellers.
3. Compromise on other terms. A lowball offer might mean that the buyer has limited funds and not because they think your home has less value. While many sellers see this as a dealbreaker, try to hear the buyer out. Chances are, they’ll be willing to give you great terms on other negotiating items to make up for their lower price.
For example, if you need a longer close, shorter inspection period, or other contingencies waived, you might be willing to budge on price. However, if price is the main sticking point, I recommend offering something like covering the buyer’s closing costs or buying down their interest rate to free up cash.
Dealing with lowball offers isn’t fun, but it is part of the process if you want to get the best deal possible for your home. If you have any questions about our spring market, lowball offers, or something else, please call or email me. I am always willing to help!
