What is Considered a Lowball Offer on a House?

When selling a house, receiving an offer can be exciting—until it’s significantly lower than expected. A lowball offer, often well below the asking price, can feel frustrating or even insulting. But what is considered a lowball offer on a house? Let’s break down what qualifies as a lowball offer, why buyers make them, and how you can respond strategically to protect your property’s value. Whether you’re preparing to sell or already fielding offers, this information will help you approach the process with clarity and confidence.

What is Considered a Lowball Offer on a House?

A lowball offer is generally defined as a bid that falls significantly below the seller’s asking price—often by 20 percent or more. However, what qualifies as a lowball offer can vary depending on market conditions, local trends, and the property itself. For example, in a competitive seller’s market where homes are selling at or above their listing price, even a 10 percent reduction might be seen as unreasonable. On the other hand, in a buyer’s market, where properties sit unsold for extended periods, offers below 20 percent might not be uncommon.

Why Do Buyers Make Lowball Offers?

Receiving a lowball offer on a house can feel disheartening, but not all are made in bad faith. Buyers rarely make a low offer without reason, even if those reasons seem misguided or overly optimistic. Here are some of the most common explanations for why buyers submit lowball offers:

• Some buyers use lowball offers as a negotiation tactic to see how flexible a seller might be. They may assume that starting with a significantly lower price gives them room to negotiate upward while still landing below the asking price.
• If buyers believe a home is priced too high compared to similar properties in the area, they may submit a lower offer to reflect what they see as the home’s “true” market value. This can happen if the listing price doesn’t align with neighborhood trends, recent sales, or the condition of the home.
• In some cases, buyers genuinely want the property but can only afford to make a lower offer. This is particularly common among first-time buyers or those working within strict financial limits. While their offer may be below market value, it’s often the best they can do given their circumstances.
• Some buyers are simply bargain hunters looking for undervalued properties or sellers who might be desperate to close quickly. This is especially common among real estate investors or cash buyers who are less emotionally attached to a home and more focused on maximizing their return on investment.
• Buyers who are unfamiliar with the local market might make lowball offers because they don’t understand current demand or pricing trends. For example, in a seller’s market where bidding wars are common, they may mistakenly assume they have more negotiating power than they actually do.
• If a home has visible issues, such as outdated features, needed repairs, or cosmetic flaws, buyers may feel justified in submitting a lower offer. They may factor in the cost of renovations or upgrades when deciding how much they’re willing to pay.

How to Respond to Lowball Offers

Receiving a lowball offer on a house can be frustrating, but how you respond can make all the difference in turning a disappointing bid into a potential deal. Here’s how to approach lowball offer responses strategically:

1. Not all lowball offers are created equal. Before reacting, take a step back and evaluate the situation:
   • Is it a buyer’s market where lower offers are more common?
   • Is the buyer serious, or are they simply fishing for a bargain?
   • How does the offer compare to recent sales of similar homes in your area?
   • Could the buyer be factoring in needed repairs or upgrades?
2. Instead of meeting the buyer halfway, consider countering closer to your asking price. This communicates that you’re open to negotiation but won’t entertain unrealistic offers.
3. If the offer is unreasonably low and you sense the buyer isn’t serious, it’s okay to stand firm. Politely but firmly communicate that while you’re willing to negotiate, their current offer isn’t within an acceptable range. This conveys that you take the process seriously and won’t entertain offers that undervalue your home.
4. If the buyer refuses to budge or their offer is simply too far from what you’re willing to accept, don’t hesitate to walk away. Sometimes, holding out for a more serious buyer is the best decision, especially in a strong seller’s market.

Not sure how to handle lowball offers? A REMAX real estate agent can provide expert guidance, from understanding market conditions to crafting effective counteroffers. Let us help you navigate negotiations and secure the best value for your home.