You’ve spent weeks preparing your home for sale, carefully staging each room, and setting a price that reflects its true value. Then it happens: your agent calls with news of an offer, but your excitement quickly fades when you hear the number. It’s nowhere near your asking price. Your first reaction might be disappointment or even anger.
Receiving a lowball offer can feel like a personal slight after all the work you’ve invested in your home. However, understanding how to handle these offers professionally can make the difference between a failed sale and a successful negotiation.
What is a Lowball Offer?
A lowball offer is a purchase proposal significantly below your home’s listing price or fair market value. These offers can come from various types of buyers for different reasons. Some buyers might be testing the waters to see how flexible you are on price, while others might genuinely believe they’re making a reasonable offer based on their market research or budget constraints.
Lowball offers are common in buyer’s markets where inventory exceeds demand. However, they can happen in any market condition, especially if a property has been listed for an extended period or if buyers perceive issues with the home that could affect its value.
What is Considered a Lowball Offer on a House
The definition of what constitutes a lowball offer can vary depending on market conditions, location, and property specifics. However, most real estate professionals consider an offer to be a lowball offer when it falls 15 percent or more below the listing price.
For example, if your home is listed at $400,000, an offer of $340,000 or less might be considered a lowball offer. In competitive markets, even offers at the asking price might be considered low in comparison to what other buyers are willing to pay.
Several factors might influence whether an offer is truly “lowball” or simply reflective of market realities:
- Current Market Conditions: In a strong buyer’s market, offers 10-15 percent below asking might be standard.
- Property Condition: If your home needs major repairs, buyers may factor those costs into their offer.
- Days on Market: The longer your property has been listed, the more likely buyers might assume you’re willing to accept a lower price.
- Comparable Sales: If recent sales in your area suggest your home is overpriced, what seems like a lowball offer might actually be aligned with market value.
How to Respond to Lowball Offers on Your House
Receiving a lowball offer doesn’t mean you should immediately reject it or feel offended. Instead, consider it an opportunity to engage with an interested buyer. Here’s a step-by-step approach to handling a lowball offer on your house:
- Work with your real estate agent to evaluate all aspects of the offer, not just the price. Consider:
- Contingencies (fewer is better for you)
- Proposed closing timeline
- Financing pre-approval status
- Earnest money amount
- Any included personal property requests
- Try to determine why the buyer submitted a lowball offer. Are they uninformed about the market? Working with a tight budget? Looking for a bargain? Understanding their motivation can help you formulate an appropriate response.
- Prepare a counteroffer that includes market data supporting your price point. This might include:
- Recent comparable sales
- Upgrades or improvements you’ve made
- Special features that add value
- Current market conditions
- Instead of outright rejection, consider countering with a price that shows you’re willing to negotiate but not willing to give your home away. A counteroffer slightly below your asking price shows good faith while maintaining your position of strength.
- Establish the absolute minimum price you’re willing to accept. This helps prevent emotion-driven decisions during back-and-forth negotiations.
- If the price gap seems unbridgeable, look for other terms that could make the deal more acceptable:
- A faster closing
- Reduced contingency periods
- As-is sale components
- Flexible move-out dates
- If the offer is truly too low to consider, you can reject it while leaving the door open for a more reasonable offer. Your agent can communicate that you appreciate their interest but need an offer closer to market value to continue negotiations.
- Be patient. Sometimes buyers who make lowball offers will come back with more reasonable proposals once they’ve tested the waters. Don’t burn bridges by responding angrily to their initial offer.
- If negotiations stall and the buyer won’t budge from a price you consider too low, walk away. Sometimes the best response to a persistent lowball offer is to wait for a more suitable buyer.
When you’re ready to list your home or need advice on an offer you’ve received, contact your local REMAX agent. Their expertise will help you maximize your home’s value and guide you through every step of the selling process, from listing to closing.
