As a real estate agent, one of your jobs is to act as an advocate for clients who are selling their home. This includes making sure the offers they receive are comparable to (or better than) homes on the market in their area. However, the reality is lowball offers sometimes happen.
In the Realtor.com article “Get a Lowball Offer? Here’s How to Turn It Into a Home Run” posted July 15, Daniel Bortz, a Realtor in the Maryland, Virginia and Washington, D.C., areas, noted an offer that is 10% to 30% below asking is almost as bad as the seller not being able to sell the home at all. With the help of broker Kimberly Sands of Coldwell Banker Advantage in Apex, N.C., Bortz offered advice for dealing with lowball offers.
“A lowball offer can lead to a successful sale if the seller plays their cards right,” Sands said in the article. Here are some tips from the article you can pass along to your clients:
Don’t get insulted — A low offer doesn’t mean the buyer is trying to take advantage. They may have relocated from an area where home values are lower or where starting off with a low offer is the norm.
Respond gracefully — Be gracious in your response to the offer. “It doesn’t do you any good to let the buyer know that you think their offer is rubbish,” Sands said. “It sounds like common sense—don’t piss off the buyer—but many sellers get caught up in their emotions.”
Your best response is a “cushioned” counteroffer. “Try: “We greatly appreciate your offer and we’d love to work with you. Here is our counteroffer,” Bortz wrote.
Write a strategic counteroffer — If your clients priced their home appropriately for the market, they shouldn’t feel pressure to reduce the price to an uncomfortable amount for them. Instead, Sands suggested, they should write a counteroffer with a slight price reduction that includes their reasoning behind pricing the home the way they have. This is where you, as their advocate, can help by providing information regarding comparable properties used in the pricing.
“Another option: Have your agent draw the buyer’s attention to some of your home’s great features (e.g., your new energy-efficient HVAC system),” Bortz wrote.
Expect a counteroffer to your counteroffer — Sellers may get a response that will, again, be lower than their counteroffer. It isn’t uncommon for buyers and sellers to go back a forth a few times before an agreed upon price is reached. Sands’ advice is to be patient while negotiations take place.
Negotiate other terms — If it’s taking too long to agree on a price, sellers can negotiate others terms, such as asking for an earlier settlement date, an information-only home inspection (one in which the sellers won’t be asked to make repairs) or asking the buyers to up the amount of their earnest money, according Sands.
“As a seller, you always want the buyer to have more skin in the game,” she said.