Avoid Making Low Ball Offers - And How to Handle One that Lands in Your Lap

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So many sellers these days are finding themselves in a quandary when they take a look at the offer they receive on their home.  The prevailing question among them is, “Why are the buyers trying to beat us up?  We’re not all in distressed sale situations!”  With the market the way it has been lately, it’s no wonder that buyers feel they can step all over homeowners selling their homes.  The process of making and accepting an offer, no matter how low it might be, can be managed tastefully however, by following these guidelines for both buyers and sellers.

Steps To Take Before Making An Offer On a Home

Find out what kind of sale it is.  If the property is being sold as a short sale or foreclosure then you might handle it differently than if it were a regular re-sale where the seller is not in a distressed situation.  It’s important to be careful of not offending sellers that may just be looking to move up into a better home by making an unrealistic offer on their home.  By doing so, you can risk losing the house if the sellers choose not to entertain your offer at all.

Learn whether other buyers out there have made any offers on the property you are considering.  The presence of one or more additional offers drastically impacts the likelihood of success when it comes to providing a winning bid on the home.  Consider whether losing the sale is a risk you are willing to take by making too low an offer.

Be prepared with documented knowledge of the home’s true assessed value. When you go to make an offer this will have a significant impact on the viability of your offer when you can corroborate the amount with the current assessed value of the home.  It is important to do so based on comparable, like-kind properties located in the same vicinity.

Make sure a prequalification letter, demonstrating that you are a serious contender for the purchase of the home, accompanies your offer.  When sellers see that a lender has reviewed your application and is willing to entertain your loan, they will likely take your offer to heart and continue with negotiations.  Sellers now often prefer to deal only with prospective buyers that have a prequalification letter on hand at the time of making an offer.

Communicate the reason for your offer if it is substantially lower than the asking price.  Many times potential buyers make lower offers as a means to compensate for repairs that may need to be done or to accommodate other things such as purchasing new major appliances. Sellers do appreciate the need for a home to be move-in ready and when any repairs that may be needed are documented and supported with quotes from contractors, the offer then makes more sense to the seller and reasonable negotiations can begin on that basis.

What To Do When You Receive a Lowball Offer

It is important to keep in mind that given the soft market we are experiencing right now, there are less buyers vying for more homes so they will try to get the best deal possible.  Try not to take it personally, rather handle it professionally by discussing with your agent how to respond to the lowball offer.

Any offer received is a good offer.  Since negotiations begin with that very first step – an offer should be viewed by the seller as a starting point.

Buying and selling real estate is purely a business transaction and it should be treated as such.  It is not anything to be offended about.

Keep in mind that a sale is not possible without negotiations and negotiations are not possible without an offer.  So when an offer is presented, it’s a good thing.

The process of selling (and buying) a home is like a rollercoaster ride.  It is important not to get too disheartened if a low offer is received.  As with the many ups and downs that can occur during the process, it is usually something that is overcome in a way where all parties are satisfied.

Do not underestimate the power of making a counter offer.  Not only does it communicate to buyers that you value your home and believe you have priced it effectively, but it also brings to light just how serious the buyer is about purchasing the home.  Believing that the prospective buyer is not realistic or serious can hinder your chances of securing a successful sale.
The key on all sides of the fence is communication.  As long as there is an open line of communication between all parties – no matter how low an offer may be, if it is the right home for the right buyers, the sale will most likely happen.  Happy negotiating!

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