It's not personal: How to handle low-ball offers

December 24, 2007

It’s a day to celebrate in a slower housing market: you get an offer on your home.  But then you look at the number and your face turns red – it’s so low, you can’t believe anyone would dare suggest that your precious home is worth so little.

Take a deep breath, step back, and remember: it’s not personal.

Just as you want to get the best deal – the highest price for your home – so does the buyer want to get the best deal, which for him means paying the lowest possible price. 

Sometimes savvy prospective buyers will make a low-ball offer just to see if you’ll take it; maybe the buyer thinks you’re that desperate to sell.  Other times, the buyer isn’t really serious about buying your home, or can’t afford anything close to your asking price.

The best thing you can do: learn how to tell the difference between a savvy prospective buyer who’s really serious and willing to negotiate and a buyer who’s not really serious.

If your buyer is serious, negotiations will get you and your buyer to a middle ground – a price you can both feel good about.

Know that most buyers will initially give you a low offer to see if you’ll take it.  Analyze their offer objectively, and then decide with your real estate agent what an appropriate counteroffer would be.  Remember to walk the line between giving in too easily and trying to drive too hard a bargain.  You want to stand up for yourself and ask for a fair price, but also remember that successful negotiation will involve some give on your part.

During negotiations, even when you feel like you want to scream, maintain a civil, gracious tone.  Remind the buyer (and yourself) how much you want to see the negotiation work out.  Say “We’re so close to a deal.  We can’t wait to close so we can all celebrate.”  Or “We’re so glad that you want to buy this house, and we really want to sell it to you.  We’re sure that we can both meet in the middle and work out a deal where everyone wins.”

It may happen that the buyer’s offer is so low that you think the buyer isn’t serious.  Maybe he’s not.  He may be just fishing – sending out low-ball offers to see if any un-savvy sellers bite.  Or he may not be qualified for a large enough mortgage to afford anything close to your asking price.  If you believe that a prospective buyer isn’t serious, remind him of how you arrived at your asking price (by evaluating the market for homes like yours) and thank him for his interest – and then walk away.

Most importantly, remember that you always have a choice: you can accept the buyer’s final offer – however low it may seem to you – or you can keep your house on the market, taking the chance on another buyer.  Whichever decision you make, know that the decision is yours – don’t let it be forced by the prospective buyer.