Dear Real Estate Adviser,
In general, is it better for me to counteroffer or just simply turn down lowball offers when selling my home? If I counter, I feel I’m revealing that I may be desperate or am not serious about my price. But if I just turn them down, I may signal lack of interest.
Veteran agents will tell you that any offer can jump-start an ultimately successful negotiation. But don’t be afraid to play hardball with these lowballs. Unless you’re really time-pressured to sell due to financial or relocation circumstances, etc., you wield the clout.
What constitutes a lowball offer? Some agents say it’s 25 percent or more below list while others have revised that to 20 percent in this current limited-inventory environment. All things being unequal, the lowball definition varies from market to market and even submarket to submarket, but certainly from price range to price range. To wit, an offer of $80,000 on a $100,000 home is more likely to be quickly dismissed than $1.6 million offer on a $2 million home.
Don’t worry about how your willingness to counter is being perceived. What matters is the result. Remain gracious to all comers. Some sellers get so wrapped up in righteous indignation following an “insulting” offer that they tell their agents to refuse all further communication from the offender. The only winner there is ego gratification, which has a monetized value of precisely zero.
A sage agent will tell you that “lowbies” who are truly enamored with a home are often willing to raise their offers by hefty — and eventually acceptable — increments. In other words, never let a deal die on your end unless it’s plainly ridiculous. Make sure to tell your agent you want to hear all offers. When you do counter, give a little ground but not much, which should scare off the bottom fishers and quick-buck flippers.
If you don’t feel comfortable countering a seemingly absurd offer, you can convey to the lowballer that while you appreciate the offer, you’ll have to pass on it. That shifts the ball to the buyer’s court to come back with a better offer. If pressed, your agent can always tell the buyers that you’re confused by their far-under-list offer and would be more than willing to entertain a figure befitting the market. Your agent might even ask for a logical reason behind that initial low offer, assuming there is one. You may also learn something about your property this way.
When assessing an offer, be sure to consider all of the buying party’s terms — such as when they’re willing to close, what repair credits they request and their financial wherewithal to perform. You may not be as far apart as you think. Of course, homes are selling fast, making lowballers a little less relevant at his point in the cycle.
Realize you may need to ratchet down expectations somewhat if your house has lingered on the block well past the local time-on-the-market average. Pricing a home reasonably accurately from the get-go is still an industry best practice.
Here’s hoping you get top dollar for your place and that you don’t let those lowballers make you see red, Skeleton. Good luck!
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