Gabe Sanders posted the following that I just had to re-blog.
This is great advice for all homeowners!
The painful truth: Sellers who do not price their property competitively are the most likely targets of lowball offers. In soft markets, buyers are more prone to make low offers on listings seen to be priced too high. Listings that don't sell usually require price reductions, which in turn often mean ultimately accepting an offer lower than you could have received by pricing aggressively from Day One.
Since selling your home can be such an emotional and subjective experience, it's easy to understand why you'd be reluctant to counter an offer below your asking price. But rather than feel insulted, try to see it as the beginning of a dialogue that could ultimately produce a sale.
If you feel any of the terms or conditions of the offer are unacceptable, ask your agent to present a counter-offer. Sometimes buyers and sellers don't really know beforehand what price they'll accept until they've begun the negotiations. For example, a buyer might agree to a higher price than planned if interest rates suddenly drop.
If you've received a lower than expected offer, but the buyers have proven their qualifications and commitment by securing loan pre-approval, you have grounds for serious consideration. The process of counter-offering can be swiftly settled or carry on ad nauseam. Be prepared to explore all options and act quickly before letting your negotiations fail.