Curse of the Lowball Offer
Doesn’t matter whether it’s a Buyer’s Market, or a Seller’s Market. Lowball offers are as old as the oldest profession.
Let’s say you just received an offer from someone who wants to buy your home. You’re excited and relieved, until you realize the offer is an unrealistic lowball price. Insulted? Disappointed? How should you respond to ensure the buyer doesn’t beat a fast retreat? Bottom line: set aside your emotions, focus on the facts, and prepare a counteroffer that keeps the buyers involved in the deal.
An offer, even the lowball type, means someone wants to buy your home. As Alec Baldwin in Glengarry Glen Ross so eloquently said, “a guy don’t walk on the lot unless he wants to buy.” Unless the offer is laughably low, it deserves a cordial response, whether that’s a counteroffer or an outright rejection. Remain calm and discuss with your agent the different ways you can respond to a lowball purchase offer.
So unless you’ve received multiple purchase offers, the best response is to counter the low offer with a price and terms you’re willing to accept. Some buyers make a low offer because they think that’s customary, they’re afraid they’ll overpay, or they want to test your limits. Sometimes it just feels like a class in Haggling 101.
A counteroffer signals that you’re willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that you’d like to take with you.
Consider the terms
Price is paramount for most buyers and sellers, but it’s not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work.
Review your comps
Ask your agent whether any comparable homes have been sold or put on the market since your home was listed for sale. If those new comps are at lower prices, you might have to lower your price to match them if you want to sell.
Consider the buyer’s comps
Buyers sometimes attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Take a look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes and your own comps that justify your asking price.
If the buyers don’t include comps to justify their low purchase offer, have your realtor ask the buyers’ agent for those comps.
Get the agents together
If the purchase offer is too low to counter, but you don’t have a better option, ask your agent to call the buyer’s agent and try to narrow the price gap so that a counteroffer would make sense. Also, ask your agent whether the buyer (or buyer’s agent) has a reputation for lowball purchase offers. If that’s the case, you might feel freer to reject the offer. No need to proverbially “drop your pants” if you really don’t need to.
Don’t signal desperation
Look, buyers aren’t dumb. Most buyers are sensitive to signs that a seller may be receptive to a low purchase offer. If your home is vacant or your home’s listing describes you as a “motivated” seller, you’re putting up a BIG SIGN that says “Make me a lowball offer.”
If you can remedy the situation, maybe by renting furniture or asking your agent not to mention in your home listing that you’re motivated, the next purchase offer you get might be more to your liking.
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It’s baaaack….From April 30 – May 2. The 2010 “Wild West Days”, aka, the Mt. Carmel Festival!
It’s safe to say that mortgage interest rates have been at historic lows since the summer of ’09, mostly around and sometimes even under 5%. Currently, they’ve been floating around the 5 & 1/8% range.
Upon receiving my latest email installment of Redwood City e-news (which you can get by signing up at 
So wrapped up in a statistic that would make any pessimist say “No way”, is the tell tale “% of LP” — or, the percentage of list price that a home sells for. In the last few months in the Mt. Carmel area, that average number was….drumroll, please…. 100%.
Be forewarned — no, this is not about 
Realtor, Marathon Man, "Man of a Thousand Voices".
