Turning Lowball Offers from Cash Buyers into Favorable Deals
Turning Lowball Offers from Cash Buyers into Favorable Deals
It’s common to receive a lowball offer from a potential buyer when selling a property. A lowball offer is one that is substantially less than the asking price or market value. While receiving a lowball offer can be disappointing, keep in mind that negotiation is a regular aspect of the selling process. You may effectively negotiate a fair price and strike a mutually beneficial agreement with the appropriate strategy.
“A lowball offer can lead to a successful sale if the seller plays their cards right,” says Kimberly Sands, a broker at Coldwell Banker Advantage in Apex, NC. After all, you’re the one who ultimately decides whether to accept or reject the bids that come your way.(1)
Why You Would Receive a Lowball Offer
You can receive an offer far below your asking price for various reasons.
They’re not serious.
A ridiculously cheap offer could hint that the buyer (or their agent) has no idea what they’re doing. They could just be throwing figures about, hoping to get a decent bargain.
They are Inexperienced in the Market
Assuming they have an agent, buyers should be educated on what to expect in your real estate market. Even so, perhaps they need to see it to believe it. Perhaps they are from another market where a home like yours is far less valuable. They are simply relying on previous experiences.
They Are Putting You to the Test
Some buyers are only concerned with getting the greatest deal possible. It’s no surprise that everyone wants a good deal. They don’t want to risk offering too much, so they go low. This is why countering any offer from these buyers is always wise.
They simply want to gauge your level of motivation. Once they’re happy that you’re not just going to hand them the keys and a deed, they could be willing to agree to some satisfactory terms.
They Are at their Full Budget
The eyes of home buyers are frequently greater than their wallets. And they can see your home even if it is more than they want (or can) afford. To them, it’s only an outside chance that you’ll be able to work inside their budget. If not, they’ll likely walk on, satisfied that they tried.
Their lender prequalification document may show them at or near their offer price. However, it is normal for purchasers to receive new letters for each offer, precisely at the proposed price, even if they can afford more. Don’t let the fact that “this is all we can afford” cloud your judgment. If this is the case, they are most likely not the suitable buyer.
They Are Financiers
Investor math is significantly more difficult on sellers than most sellers or real estate agents realize. There may be times when selling to an investor, like we buy houses Odessa, FL makes a lot of sense (e.g., must sell quickly and/or extensive repairs are required). Some investors you can sell your house to include we buy houses Hudson FL companies, iBuyer, and more.
Maybe they’re not underestimating you. Perhaps you’re asking far too much, and they’re offering a reasonable amount. Review your market study or conduct a new one if it has been a few months, and ensure that your expectations are grounded in reality.
Tips and Tactics for Dealing with a Lowball Buyer Offer
Take Nothing Personally
When someone makes a lowball offer, it’s natural to be insulted, especially if you’ve put a lot of time and effort into your property. However, keep in mind that a lowball offer is simply a business practice, and the buyer is not necessarily attempting to belittle you or your work. Rather than becoming irritated, try to remain calm and professional while focusing on finding a solution.
Use Your Value Proposition to Account Your Price
If the buyer questions the worthiness of your property, be ready to explain why it is worth the asking price. This could include emphasizing your property’s unique amenities or features. For example, a heated driveway could mean a higher price for your home. You may help the buyer realize why your price is reasonable by showcasing the value of your property.
Be Prepared to Bargain
Lowball proposals are usually merely a jumping-off point for further negotiations. Don’t be afraid to reject the offer or demand a higher price. It is critical to be forceful but fair and willing to make adjustments to reach an agreement. Consider what you’re willing to tolerate and what you’re not.
Be willing to compromise, and be prepared to explain this to the buyer.
Understand The Market Value
Before you begin negotiating, you should have a firm grasp on the worth of your property in your market. Investigate comparable products or services in the market to determine the going rate. This will assist you in determining whether the lowball offer is reasonable or well below market value.
If Necessary, Take a Step Back
Finally, remember that you are not required to accept any offer, even if it is the only one you have received. If the lowball offer is simply too low and you are unwilling to make a concession, walking away from the sale may be advisable. While it can be difficult to say no, it’s vital to prioritize your personal wants and interests while making an offer. Other buyers could be out there prepared to pay a reasonable amount for your property.
Consider Other Choices
Consider presenting alternate possibilities if the buyer’s lowball offer is too low and you are unwilling to accept it. Adding value through additional features or renovations could be an example of this. If you give additional possibilities, you can find a solution that suits the buyer’s budget while still being fair to you.
You can effectively negotiate a lowball offer from a buyer by following these suggestions and reaching a fair and mutually beneficial deal. Remember to be professional, to know your market value, to be prepared to negotiate, to utilize your value proposition to justify your pricing, to evaluate alternative possibilities, and to be willing to walk away if necessary. You can successfully maneuver the selling process and obtain the price you deserve for your property if you take the appropriate approach.
Justin Setzer is a highly motivated entrepreneur with a passion for real estate investing. He is the founder and CEO of Home Options, a company that specializes in buying homes for cash. Home Options helps homeowners who are in difficult situations, such as facing foreclosure, needing to relocate quickly, or inheriting unwanted property.
Justin has several years of experience in the real estate industry and has helped many homeowners sell their homes quickly and easily. He is dedicated to providing exceptional customer service and creating win-win solutions for all parties involved.