3 types of Low Ball Offers (and how to respond to them)

3 types of low ball offers and how to respond to them

3 types of Low Ball Offers (and how to respond to them)

3 types of Low Ball Offers (and how to respond to them)

So you got a “Low Ball” Offer on your house for sale…Unfortunately, “low ball offers” on homes are more common than you may think, particularly among investors. A “lowball offer” is an offer that is far below a home’s asking price (sometimes ridiculously low—but the value of “low” is in the eyes of the recipient). There is not really a benchmark for how low an offer is to be considered a “low ball,” but believe me, if you receive one when selling your home, you’ll know!

So…how should you respond? Should you tell them where they can stick it?

(It is soooo tempting!!) I say, usually, no! WHY?? You know, a bird in the hand and all that…

More than likely, you are angry. You are probably also insulted. It is difficult to do, but try to place your emotions aside—this is a business transaction (albeit a VERY personal one when selling your home!) The good news is…any offer is better than none because at least you have a negotiation dialogue started. I am probably in the minority of agents on this one. Most Real Estate Agents are likely more annoyed than I am when receiving a low ball offer. (However, I am an investor too, and have myself written low ball offers, when the situation warranted it. Not often!)

There are, for 99% of these types of offers, 3 core low-ball real estate buyer groups:

1.  THE UNINFORMED YET HOPEFUL HOMEBUYER – This is a buyer who is shopping for his/her personal residence. They might possibly have seen too many episodes of “Flip This House,” or own some real estate “Investing” CDS…so, this buyer sees him/herself as a real….let’s just say, “expert.” Typically, the rationale for their low offer is not that they can’t afford it—but they think they can “get a deal” because they know about the real estate secrets! (LOL!!) and somehow sneak into the deal of a lifetime. (It can happen, but believe me, it is rare!)   Basically, the potential buyer is testing your response and they do want the house, even at a higher price.

How to respond to the offer? In this instance, I would advise my seller to counter back to the offer with a reasonable offer. Let’s try to get a REAL and REASONABLE negotiation dialogue going and get out of the dreamland pricing. If the potential home buyer is of this variety, this should give them a nice nudge back into reality on this purchase. If not, nothing lost—they weren’t serious anyway. There is no harm in countering back a realistic price, you literally have nothing to lose—but if you get mad and tell them to eat rocks and get lost, then you have nothing to gain!

 2.  THE INVESTOR – Many investors write low ball offers on homes and properties all the time—it is a numbers game. The thought is, if you throw it (offers) at the wall (home sellers) often enough, eventually something will stick. They have no emotional ties to the property, its just an investment to them…and real estate investment properties are a dime a dozen. They are hoping that you’re desperate enough to take the (typically cash with quick closing) offer and run.

How to respond? If you are the desperate seller who wants to take the money and run, take the offer (you can run after closing). If you want to get them up a little (or a lot), counter back. Always use a counter if you do not accept the offer straight away. This is my biggest point to this whole blog post—YOU HAVE NOTHING TO LOSE BY COUNTERING, IF THE INITIAL OFFER IS NOT ACCEPTABLE! I would advise, when dealing with investors, to add a clause in the contract that the counter offer is good until 5pm the next day. It gives them a sense of urgency that is sometimes needed…remember, they don’t need it to close before their lease is up because they aren’t buying personal real estate!

 3.  THE BOTTOM FEEDER – This could be either an individual buyer or an investor—this real estate buyer only writes extremely low ball offers, usually on distressed homes or properties that have been listed for sale for long periods. Distressed vacant properties are like homing beacons to the real estate bottom feeder, they can smell the desperation (or so they hope.)

This buyer has no intention of negotiating—the lowball offer is a “take it or leave it.” This buyer will typically not ever respond to your counter offers and disappear into the abyss just as quickly as he/she entered. They are on to await the responses of the 10 other low ball offers they submitted the same day…just waiting for that one that is desperate enough to take it.

Luckily, this is the rarest of the 3 groups. You may not realize this is the type of buyer until later, as any response other than a signature to the initial offer is likely ignored. However, sometimes you get lucky and the buyer’s agent lets it slip that they made several other offers at the same time—that should put you on notice quickly that this probably isn’t going anywhere. However, my professional advice remains the same….if the offer is not acceptable, always counter back! I have not been seeing many of these buyers lately, probably because prices are going up and entering a seller’s market, so they don’t have as many possible victims sellers as they have the past few years.

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Always discuss the pros & cons of every offer with your real esatate agent. Your agent should create a NET sheet for you, so that you know how much your check will be at closing after all the fees. There are many other contributing factors of an acceptable offer, aside from price. Although, yes the biggest and most argued factor of a sale is and will always be the price! The price typically determines whether or not you even care to hear the other offer details.

I TRULY hope you never receive a lowball offer and never need to use this information! Always get your REALTOR’s input and maybe, just maybe, you can turn that low-ball offer into a legit contract!

~May your offers be high and your days on market low!~ 😉



Lisa E. Priest is a Texas REALTOR® / Real Estate Agent  with Picket Fence Realty, Inc.  in Palestine, Texas focused on buying and selling in Palestine and surrounding areas and proving that customer service isn’t dead, one client at a time!   You can reach her via voice / text: 903-948-3343 or email: lisa@rentpalestine.com

www.RentPalestine.com www.BuyPalestine.com

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