How To Respond To A Low Offer On Your Home

By
Commercial Real Estate Agent with Access Capital
http://actvra.in/hpn

Consider before you ignore a very low purchase offer for your home. A counteroffer and negotiation could turn that low purchase offer into a sale. When you receive a low offer on your house, the best response is to counter with a price you're willing to accept.

You just received a purchase offer from someone who wants to buy your home. You’re excited and relieved, until you realize the purchase offer is much lower than your asking price. How should you respond? Set aside your emotions, focus on the facts, and prepare a counteroffer that keeps the buyers involved in the deal.

 

Check your emotions

A low purchase offer still means someone wants to purchase your home. Unless the offer is rediculously low, it deserves a response. Remain calm and discuss with your Realtor the many ways you can respond to a low purchase offer.

Counter the purchase offer

Unless you have multiple purchase offers, the best response is to counter the low offer with a price and terms you’re willing to accept. Some buyers make a low offer because they think that’s customary, they’re afraid they’ll overpay, or they want to test your limits.

A counteroffer signals that you’re willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that you’d like to take with you.

Consider the terms

Price is paramount for most buyers and sellers, but it’s not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work.

Review your comps

Ask your REALTOR® whether any homes that are comparable to yours have been sold or put on the market since your home was listed for sale. If those new comps are at lower prices, you might have to lower your price to match them if you want to sell.

Consider the buyer’s comps

Buyers sometimes attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Take a look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes and your own comps that justify your asking price.

If the buyers don’t include comps to justify their low purchase offer, have your real estate agent ask the buyers’ agent for those comps.

Get the Realtors together

If the purchase offer is too low ask your Realtor to call the buyer’s agent and try to narrow the price gap so that a counteroffer would make sense.

Posted by

All The Best,

Herb Johnson

859-372-8019 Direct Line

Herb@HerbJohnson.com  Email

www.HerbJohnson.com      Website

Buyers and Sellers wanted. Referrals Appreciated!

4895 Houston Road

Florence, Kentucky  41042

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Re-Bloggged 6 times:

Re-Blogged By Re-Blogged At
  1. Stacey Matsuda 08/22/2011 08:20 AM
  2. Lori Stenbeck 08/22/2011 10:24 AM
  3. Erica Ramus 08/24/2011 11:42 PM
  4. Daniel H. Fisher 09/08/2011 11:18 PM
  5. Barbara Martino-Sliva 01/28/2012 10:33 PM
  6. Gabe Sanders 01/30/2012 06:29 AM
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Anonymous #40
Anonymous
Susan Fox

Herb,

Great article, well written from an experienced agent. Here on Maui it is hard to determine what is ridiculously low, I always try and get my sellers to respond to every offer no matter how low. So many buyers seem to be testing the owners and looking for a steal. I always coach my sellers with it is "just business, not personal"

Thanks for sharing,
Susan

August 25, 2011 02:32 PM
Rainer
168,750
Herb Johnson
Access Capital

@Susan:

Think getting people to not take things personal is one of the toughest challenges we face.

All the best,

Herb

August 25, 2011 03:53 PM
Anonymous #42
Anonymous
Bonnie Voss

Thank You for your article.  Good advice. Our market is flooded with short sales and foreclosures, so low offers based on the conditions around a solid sale are sometimes hard to for a seller to understand and accept. But our job as REALTORS is to work a low offer into a acceptable one.  Good Luck to all  Bonnie

August 30, 2011 01:38 PM
Rainer
168,750
Herb Johnson
Access Capital

Bonnie:

Thank you for the kind and encouraging words.

All the best,

Herb

 

August 30, 2011 03:07 PM
Anonymous #44
Anonymous
William Young

As an investor in short sales I can offer my perspective on 'low'ball' offers. If a seller is facing foreclosure, holding out in hope for an unrealistic offer is only prolonging the pain. If a house is long on the market, the agent has a duty to the seller to present all offers. Time is of the essence in short sales.
Investors today can make a positive difference in the marketplace through purchasing the properties, keeping the seller out of foreclosure, keeping over-leveraged properties off the lenders' books, allowing a new owner to make a good buy on the property and creating commissions for agents. Any way we can all work together to stimulate the market while Washington wrings its' hands is pro-active and good for everyone.

September 02, 2011 02:40 PM
Rainmaker
88,970
Kathleen Vetrano
Luxury Home Real Estate Consultant
Coldwell Banker Residential Brokerage

It is an offer and why not counter?  I have seen low ball offers turn into fruitful negotiations and settlements.  Great post and strategies.

September 08, 2011 11:43 PM
Rainer
168,750
Herb Johnson
Access Capital

Kathleen:

Exactly!!Thank you!

All the best,

Herb

September 09, 2011 05:52 AM
Rainmaker
698,193
Sharon Parisi
Dallas Homes
Keller Williams Dallas Premier Realty

It is always worth countering a low offer. Like Kathleen said above, we never know what a buyer is really willing to pay for a property.

January 26, 2012 10:07 AM
Rainer
168,750
Herb Johnson
Access Capital

Sharon:

You're absolutely right and when people get emotionally involved some times bruised egos keep deals from happening!

All the best,

Herb

January 26, 2012 05:02 PM
Rainer
115,537
Linda Edelwich
William Raveis Real Estate

I think you should always counter...it is really about a meeting of the minds..A seller will not sell for less than what they want for a house and a buyer will not pay more than they think its worth. Sometimes, they dont always know those numbers themselves until they are actually faced with an offer or a counter offer! Nice posting!

January 27, 2012 08:54 AM
Rainer
168,750
Herb Johnson
Access Capital

Linda:

You're absolutely right and thank you for the kind words of encouragement.

All the best,

Herb

January 28, 2012 01:09 PM
Rainmaker
582,897
Susan Neal
Fair Oaks CA & Sacramento Area Real Estate Broker
RE/MAX Gold, Fair Oaks

Hi Herb - If the low offer is th eonly one at the time, I always advise my sellers to counter it rather than simply rejecting.  It takes only a couple of minutes and who knows?  The first offer might have been a test, but if they really want the house, they might just accept the counter.  It's worth a try.

January 28, 2012 10:40 PM
Ambassador
1,327,466
Jon Zolsky, Daytona Beach, FL
Selling Daytona paradise for heavenly good prices
Daytona Condo Realty, 386-405-4408

Came from the reblog by Barbara. When we recieve a reallylow offer, I suggest that my Sellers do not counter. It works. It is the strongest message relaying that the offer is too low.

January 28, 2012 10:43 PM
Ambassador
1,061,499
Ellie McIntire
CDPE, Howard County Homes for Sale
Ellicott City Clarksville Howard County Maryland Real Estate

This is great. I would reblog it but I think one of my current clients will think that I am directing it at them.....although I would be!

January 28, 2012 10:43 PM
Rainmaker
1,774,882
Gabe Sanders
Stuart Florida Real Estate
the BlueWater Realty team specializing in Martin County Residential Homes, Condos and Land Sales

An offer is an offer.  And this is great advise, though there are times that I recommend just a flat out no.  It's all in the details and circumstances.

January 29, 2012 07:01 AM
Rainer
168,750
Herb Johnson
Access Capital

@Susan: We are in agreement, there is very little downside to a response.

@Jon & Gabe: I'm not suggesting time be wasted on people who are low balling. Yet in the current environment my belief engaging a buyer is in the best interest of my clients. I've had several offers that were close to only 75% of the list price, yet after nogtiations closed for more than 90%.

@Ellie: Feel free to use any of the content you wish for your clients.

 

January 29, 2012 01:31 PM
Rainmaker
628,967
Stephanie/Bob The Ruiz/Miller Team
The Ocala Dream Team
Keller Williams Cornerstone Realty

Hi Herb, great post and congratulations on your top ten.  Great suggestions especially since I have received two insulting offers this month.

January 29, 2012 08:18 PM
Rainer
168,750
Herb Johnson
Access Capital

@ Bob:

Thank you for the kind words and don't take those offers personally!!

All the best,

Herb

January 29, 2012 09:23 PM
Rainer
373,069
Bill Reddington
Destin Florida Real Estate
Re/max Southern Realty

I agree the best thing to do is counter at a price you are willing to accept. The job is to keep sellers from being insulted and counter.

February 02, 2012 05:32 PM
Rainer
168,750
Herb Johnson
Access Capital

Bill:

Thank you for your comment, you are absolutely right in my opinion.

All the best,

Herb

February 03, 2012 07:49 AM
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