So, a buyer has put in a lowball offer on your house and you aren't satisfied with the terms they are asking for. Don't worry though, this isn't uncommon and many sellers feel that their house is worth more than what someone is offering. Of course, this is understandable because as a seller you have worked hard to keep your house in great condition in order to keep its value.
A lowball offer is generally considered to be an offer that's more than 25% below the asking price. This can seem a little insulting because after all, it's your house. But if the lowball offer is the only one you've gotten, you might be tempted to counter offer in order to attempt to secure a sale.
Before you submit your counter offer, here are a few things you should know.
As off-putting as a lowball or just downright unfair offer can be, you want to remove your feelings from the situation as much as possible. It can be easy to feel like it's something personal, but at the end of the day, the buyer is also trying to get a good deal on a home that might be there's one day. It also might be hard to do any negotiating if you're letting your sentimental feelings get in the way.
You'll want to think about this offer as the next step of a business transaction. Also, you're probably selling your home for a reason. Maybe you're ready for a bigger home or just got a job promotion in a new city. Either way, you're moving on to the newest step of your life, and denying offers you think are unfair might be keeping you from that.
Consult Your Real Estate Agent
Your real estate agent is going to be your fountain of knowledge during this process. They will help you determine what should be negotiated and what shouldn't. They also might be able to talk to the buyer's agent to figure out what the buyer really needs from the purchase of this home. For example, maybe your house is close to their new job but they don't have quite enough for the sale price and repairs needed.
Your agent will also be able to go over a few comparable homes in your neighborhood. They're professionals in the real estate market and will be able to determine if the offer a buyer is asking for is actually within the fair market value of your house.
Read the Entire Offer
It might be easy to only focus on the actual price that the buyer has offered. However, in reality, there are way more factors that go into negotiating an offer. For example, they might be willing to excuse some of the much-needed repairs or the fact that your kitchen needs an upgrade. Instead of asking for a high price and expecting the buyer to front those other costs, they might be willing to pay for them if they pay less on the house.
Consider What You Need from the Sale
At the end of the day, your goal here is to sell your house. If you are pressed for time and don't need a large amount of money to pay off your home loan, maybe you have room to be flexible with an offer. Or, if you have the time to wait out other offers, you can have your agent submit a counter offer that clearly states what you need from the sale as a seller.
Put an Expiration on Your Offer
When a buyer submits an offer that you don't want to accept, you counter their offer. You're then involved in a legally binding negotiation with them and you can't accept a better offer if it comes along.
This can be frustrating for sellers who need to finish the sale sooner than later, or don't want to waste time with lowball offers. By putting an expiration on your offer, this compels the buyer to make a decision so you can either get your home under contract or move on. However, you want to avoid making a deadline so short that it scares the buyer away.
Another reason for an offer expiration is your house is still on the market even during the negotiation phase. Because you can't accept other offers if you have one on the table, this might deter other potential buyers from putting in their own offers.
The key to executing these negotiating strategies successfully is that you have to be offering a superior product. The home needs to be in good condition and have something that other properties don't. If buyers don't feel excited about the property you're offering, your hardball tactics won't cause them to up their game, instead, they might just walk away.
Navigating the negotiation process isn't easy without an experienced real estate agent. By working with Clever, you'll get connected with top local real estate agentsto help you save money and make the process smooth sailing.