Low Offer on Your House? How Should a Seller Respond?

You just received an offer on your home and you are ecstatic…. until you look at it closely and see that the offer amount is significantly lower than your asking price.  How should you respond?

For most sellers, receiving what they consider to be a “low ball” offer generates an immediate and, usually, very negative response.  For many, their first thought may be, “That is way too low. I am not even going to respond.”  But, any seasoned real estate agent will tell you “STOP now, before you lose a sale!”

Before you choose to ignore any offer on your property you must first stop to think that a written offer means that there is a buyer who is seriously interested in your home.  The price may not be where you want it to be, but a responding counteroffer may well turn that low price offer into a sale with a bit of strategic negotiation.

 

Stop and Think

No matter how low, all purchase offers deserve a response.  In some cases this may be a counteroffer in others it may be an outright rejection. In order to determine which way is best in your situation, you will need to check your emotions and deal strictly with the facts. A frank discussion with your real estate agent will help you determine the best way to respond and still keep the negotiations open.

Keep in mind: At the end of the day, it is your goal to sell your home so you, and your agent, must make every effort to progress the negotiations, if possible.

 

Try Not to Take It Personally

Selling a home can feel very personal. You know how much time, money, and effort you have put into the property, so a low offer can feel insulting.  In the current market climate I make every effort to prepare my home sellers up front for this possibility.

Most buyers are not trying to offend you. They may simply be “fishing” – testing the waters to see how flexible you are. They may be looking at different comparable sales, factoring in updates they feel the home needs, or trying to stay within a certain budget. Whatever the reason, the best approach is to take the emotion out of the decision and look at the offer from a business standpoint.

A low offer does not always mean a bad offer. It shouldn’t be the end of the discussion – just the beginning of the negotiation.

 

Consider Making a Counteroffer

If the offer is lower than you are willing to accept but the buyer appears serious, a counteroffer may be the best next step. A counteroffer simply signals to the buyer that you are willing to negotiate.  Curb the instinct to respond at full price. While real estate “feels” very emotional, in the end, it is a business transaction and the best response is usually a reasoned response.

You might decide to:

• Adjust the price but remove requested closing-cost assistance

• Hold firmer on price while agreeing to another term that is important to the buyer

• Modify the closing date or possession terms

• Make a smaller price adjustment while keeping stronger contract terms

• Agree to include certain appliances or other items

The goal is to determine whether there is a deal that works for you.

 

Review Recent Changes in the Market

The real estate market can change while your home is listed.

New homes come on the market. Other properties go under contract. Comparable homes close. Sellers make price adjustments.

That is why it is important to review the most current market data before rejecting an offer based solely on price.

Ask your agent to review recent comparable sales and current competition. An updated Comparative Market Analysis, or CMA, can help determine whether the offer is truly unreasonable or whether the market has changed since your home was originally listed.

This is also important if the buyer is financing the purchase. Even if you and the buyer agree on a price, the home may still need to appraise at or near that value.

Current market data gives you a much better foundation for deciding how to respond.

 

Have Your “People” Call My “People”

Sometimes the most helpful thing your agent can do is simply pick up the phone and call the buyer’s agent.  A buyer’s agent cannot necessarily speak to their client’s “motivation”, but understanding the reasoning behind the offer can help you decide whether a counteroffer makes sense and how best to structure it.

If the buyer is using questionable comparable properties, your agent may be able to provide better market data.

If the buyer simply cannot get anywhere near a price you would consider acceptable, then rejecting the offer may make the most sense.

Basically, you won’t know unless you ask and information is king when negotiating a sale.

 

Be Mindful of the Message Your Listing Sends

Certain situations can make buyers think a seller may be especially motivated.

A vacant home, a long time on the market, multiple price reductions, or wording that sounds overly urgent can sometimes encourage buyers to submit aggressive offers. **Stay away from words like “motivated seller” or “bring all offers”.

That does not mean you should hide anything or mislead buyers. It simply means your pricing, presentation, condition, and marketing should support the value you are trying to achieve.

A home that shows well, is priced appropriately, and is marketed effectively puts you in a much stronger position when offers come in.

 

Is It Ever Okay to Reject a Low Offer?

Absolutely.

Not every offer needs to turn into a long negotiation.

If the buyer’s price and terms are so far from anything you would reasonably consider, then rejecting the offer may be the best choice.

The important thing is to make that decision based on the facts, not simply because the first number was disappointing.

 

The Bottom Line

When a low offer comes in, try not to react too quickly.

Take a good look at the entire offer. Review the latest comparable sales. Consider your competition. Look at your estimated net proceeds. Ask questions. Then decide whether a counteroffer could move the buyer closer to terms that work for you.

Sometimes an offer that looks disappointing at first can turn into a successful sale.

And sometimes saying no is the right decision.

The key is knowing which situation you are dealing with.

 

Thinking About Selling a Home in North Georgia?

If you are considering selling a home in Cumming, Suwanee, Johns Creek, Alpharetta, Milton, Roswell, or the surrounding Forsyth, North Fulton, and East Cherokee County communities, having an experienced negotiator on your side can make a big difference when offers start coming in.

I help my seller clients look beyond the purchase price and evaluate the full offer, including the terms, current comparable sales, competition, appraisal considerations, and overall strength of the transaction. Feel free to call or text me at 404 710 0204. I offer complimentary home evaluations and selling strategy consulting.

 

 

 

 

This Local Real Estate blog is hosted by Gayle Barton, a top producing Realtor® with BERKSHIRE HATHAWAY HomeServices Georgia Properties. Gayle Barton is ranked among the top 6% of BHHS agents nationwide. Licensed since 1983, she brings significant experience in negotiation and client advocacy and has closed more than $100 million in local sales.

Meet Gayle Barton | Forsyth County Real Estate | Gayle Barton Google Business Profile | Barton Team Real Estate

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Disclaimer: Information contained in this post is deemed reliable on the date of publication, but it is not guaranteed, and it is subject to change without notice. All content, including text, original art, photographs and images, is the exclusive property of Gayle Barton and may not be used without expressed written permission.