When buyers make lowball offers: What is the next step?
There are many challenges when it comes to selling a home. Between getting an appraisal, updating maintenance, and listing the house, the entire process can be tiring. When a potential buyer makes a lowball offer, this isn’t just another challenge – it can potentially end negotiations before they even get started.
While a low offer is a step up from no offer at all, it is important to take a deep breath and consider all of the options before getting angry. Here’s some advice to consider when a client wants to make a lowball offer (and remember, your partners at Essex Mortgage are always here should you have any questions):
1. Remind the buyer that it can be viewed as an insult
Make sure to remind the buyer that the seller has spent a significant part of their life living in this home. They may have raised a family in the house. Their heart and soul went into numerous renovations. This address was the site of countless memories for the homeowner.
A low offer can be taken as disrespect for all of the hard work and the experiences they’ve had. Remember that the process of buying and selling a home is a negotiation. Making a low offer is another business strategy, but an offer too low can end negotiations quickly. Remind the buyer that this could be their dream home. Do not insult the seller with an offer that is too low.
2. What is “too low?”
This is where your role as the agent is important. Come back to the buyer with a list of comps. Educate the buyer on what similar homes in the area have sold for. Remind the buyer that it isn’t realistic to purchase a home for a price significantly lower than similar homes on the comps listings.
Furthermore, remind your client that this isn’t the buyer’s market that it was in 2009. If the buyer is having trouble understanding this, reassess the price that the buyer is willing to pay. Many times, clients are reluctant to reveal that they simply don’t have the money to pay a price that is similar to the compas. If this is the case, it is time to look for a less expensive home.
3. Remember that other terms are open for negotiation
If the buyer isn’t willing to offer a reasonable price, remember to look at the other terms. Escrow, a preferred closing date, and inspection conditions are all on the table as well. Talk to the buyer and see if they are willing to forgo escrow, sacrifice a preferred closing date, or forgo some of the costly inspections in exchange for the low price.
If you can save the seller some time and money on these procedures, they are less likely to be insulted by the low offer. This will allow negotiations to begin in earnest where you will have more time to speak with your buyer about the low price. As negotiations continue, the buyer will likely realize their low price wasn’t realistic.
Finally, make sure the buyer has an honest and reliable mortgage provider. At Essex Mortgage, we have developed a long and impressive track record of helping individuals and families realize their dreams. With a commitment to integrity, we can help your buyer, too. Contact us today to speak with a mortgage professional.