Top 3 Tips on How to Handle a Lowball Offer

Learn how to effectively handle lowball offers in a shifting market.

If you're planning on selling your house, be prepared for all types of offers. Recently, we’ve noticed a shift and slowdown in the market, which some buyers see as an opportunity to throw out lowball offers. So, what should you do if you're on the market and get a lowball offer? Here are my three top tips.

1. Go Back to the Facts. Before making an emotional decision to reject the offer, go back to the facts. Have your agent pull data on your area, price point, and school district. Look at the list price-to-sell price ratio for houses that have sold in the last 60 days. Is it 100%? 99%? 95%? Reviewing these facts can help you make a more informed decision rather than an emotional one.

"This is a cardinal rule for everyone I work with: always counter any offer that comes in."

2. Mind All the Terms in the Contract. Keep in mind that price is just one term in a contract out of many. While it's an important term, contracts have 233 lines of terms. Consider other favorable terms that might be included in the offer. How many contingencies are there? Does the closing and possession date work for you? How strong is the buyer? These are all critical factors your agent should help you evaluate when considering how to handle the offer.

3. Always Counteroffer. This is a cardinal rule for everyone I work with: always counter any offer that comes in. It might be low or even offensive, but countering keeps the negotiation alive. For example, just last week, we had a house listed at $550,000 and received a lowball offer of $500,000. My sellers wanted to reject it outright, but we discussed offering a small discount off our list price to show we weren't giving the house away. The buyer accepted our counteroffer, even though my sellers initially wanted to reject it. Always counter because you never know the true intentions and desires of the buyer.

If you're thinking about selling and want a professional to sit down with you, discuss how to handle this market, and determine the right price for your home, give us a call. We'd be happy to help you navigate your area and market.