A “lowball offer” is an offer that is far below the list price—sometimes ridiculously low, sometimes not quite at ridiculous level, but the threshold of “low” is in the eyes of the seller. There is not really a benchmark for how low an offer is to be considered a “low ball,” but believe me, if you get one when selling your property, you’ll know!
So…how should you respond? Should you tell them where they can stick it? My answer? No, never! More than likely, you are irritated, angry and insulted. Its tricky to do, but try to set your emotions aside—this is a business transaction (it just happens to be a personal one.) The good news is…you’ve got an offer! A “meh” offer is better than none because at least you have a negotiation dialogue started. I might be in the minority of agents with my opinion on this one, but you can’t make a deal with no offers!
The rationales behind an offer can vary—maybe they have seen too many episodes of some real estate show or went to some real estate investing seminar or Uncle Joe is giving them advice. Typically, the reason for their low offer is not that they can’t afford it, but they think they can “get a deal” or that you are supposed to start super low and “meet in the middle.”
So…Should you and How should you respond to low offers?
Of course, every offer and situation is different, but if the offer doesn’t work for you, counter it back. Your Agent is invaluable to help navigate the negotiation waters. The goal is to try to get a real and reasonable negotiation going and get out of the dreamland pricing. If they are serious, a counter offer will 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 get lost, then you have nothing to gain!
The main takeaway from all this is that you have nothing to lose by countering even the most ridiculous offer. Always discuss the pros and cons of each offer with your real estate agent. Your agent should create a net sheet for you, which is an estimate of your final check after all expenses. There are many other contributing factors of an acceptable offer, aside from price, but the biggest and most debated factor of a sale is and will always be the price. In a perfect world, you wouldn’t get a low ball offer; but if you do, then don’t just say no—try to work the offer up!
Lisa Priest loves a good negotiation and is a Texas Broker / REALTOR® with Picket Fence Realty, Inc. You can reach her via phone or text at 903-948-3343 or read more at BuyPalestine.com