No seller wants to receive a lowball offer when selling their home, but no buyers are immune to this common real estate tactic. Many sellers become insulted at a low offer and choose not to respond, but in my experience, they miss a great opportunity. Today, we are going to discuss the correct response to a lowball offer and how to get the most out of negotiations.
Keep your lips sealed
Rodrigo Guzman of Rutenberg Realty advises that “a seller’s broker needs to keep a lot of the personal reasons for selling confidential, because a well-prepared buyer’s broker will use all such information against the sellers when negotiating.” Confidential information such as a divorce, job loss or relocation could lead buyers to assume a seller is desperate and could bring on more low ball offers.
Don’t be offended
“There’s a natural tendency to get upset when you receive a lowball offer,” says Kimberly Sands, a broker at Coldwell Banker Advantage. “There’s usually room for negotiation, so I never tell a client to reject an offer outright.” A low offer doesn’t necessarily mean a buyer is trying to offend you or take advantage of you. The buyer doesn’t know your situation, your needs or desires, nor do they know your urgency for a contract. As the seller, you have memories and sentimental value attached to your home, while the buyer is looking at the bones of the home with no memories attached. A lowball is simply an attempt to gain a better price, even when it feels as though they have insulted the home you care deeply about. Some sellers become so offended, they choose not even to respond, but this could not be further from the correct response. Often, a promising contact can be drawn up from negotiations that begin with a low offer.
The bottom line is, always counter offer. An excellent realtor will have great advice as to how low or high you should counter. Depending on your situation and needs, your counter offer should reflect the strategy you and your realtor choose. If they counter to your counter offer, you should see this as a positive sign that they are very interested and have good odds of finding a price that works for both of you. The process can be long and drawn out, but an active buyer is a great sign of interest.
Be prepared to negotiate
Negotiating can help both you and the potential buyers get what they need. It is vital that you negotiate well to protect the areas that are most important. This is one of the many areas that you will rely heavily on a great realtor who should be proactive in protecting you, so rely on their expertise.
Think beyond price
Think deeper than the price if you have no more room to give. If you find yourself in a price deadlock after negotiating, it’s time to get creative. What other issues are you able to adjust to come to common ground? Can you assist with closing costs, closing timeline or adding/dropping contingencies? You could try to persuade the buyer to make their home inspection contingency an information-only inspection (meaning no repairs for you). Another negotiating point would be to get the buyer to increase their earnest money deposit to show greater assurance they are serious about purchasing.
Maureen Hughes is the Lead Listing Specialist of The Wayne Megill Real Estate Team of Keller Williams Brandywine Valley in West Chester. For buyer or seller representation, or for more perspective on the local and national real estate market, please email firstname.lastname@example.org and visit The Wayne Megill Team site at http://www.waynemegillteam.com.