Getting lowballed on your home stinks. No doubt about it, but the story can have a happy ending. If you know how to effectively handle a low-ball offer on your house, it oftentimes can turn into selling your house at a price you didn’t even think possible. By the time you’re done reading, you will see that it’s not where a buyer starts their home offer, but where they finish.
What’s in it for you
In a normal market, the most common definition of a lowball house offer is 10% below a home’s current market value. In a buyer’s market, where there are more houses for sale than there are buyers, that definition changes to 20% below a home’s existing market value. In a seller’s market, where bidding wars are the norm with homes selling for thousands over their market value, a lowball offer might be considered anything less than full asking price.
In all practical purposes, a low-ball offer is anything you, the seller, think is significantly too low. This means that what you consider a lowball home offer is a matter of personal perception which is commonly influenced by 3 things: (1) your knowledge of the current state of the real estate market, (2) your access, or lack thereof, to legitimate comparable sales data, and (3) using online home valuations like Zillow or Opendoor and pegging them as correct (which the chances of these online tools accurately valuing real estate are about as good as seeing Bigfoot in your backyard!).
(In August 2022, Zillow partnered with Opendoor to feed its users to Opendoor’s iBuying platform to request offers from Opendoor)
If you’ve received an offer, and the purchase amount offends you, keep reading before emotions take over and you slam the door shut on a buyer who’s probably ready to up their offer!
There are many reasons homebuyers might make you offers that are much lower than you’re willing to accept. Buyers know that sellers often put a cushion between their asking price and what they’re willing to sell for. For the same reason, house buyers often open with lower home offers as they’re hoping to meet you somewhere in the middle. Other reasons people receive lowball offers on their property include:
You installed a beautiful pool for $30,000 and it’s so beautiful that it must be worth $50,000. Yet, home buyers think your pool will cost $10,000 to fill-in, and if they don’t, its maintenance will cost $4,000/year. What one homeowner values can be the opposite to another owner (note: according to Investopedia and many other credible sources, pools do not add value to a home).
Receiving a ridiculously low offer on your house could mean that the buyer has very little experience or that they’re just flinging out numbers hoping that a home owner will bite.
If a buyer’s first offer gets accepted, most feel like they lost and offered the seller too much. People and most companies who buy houses don’t want there to be any chance of this, so they offer low to test your motivation for selling. Don’t be alarmed, just read on, and follow the advice below.
Investor math can be rough on sellers. To make a profit, most sellers don’t realize (or believe) the costs an investor takes on and therefore home purchase offers from investors are often seen as lowball. Unlike the industry standard 15% profit, at GVH we target a 10% profit margin meaning that we can pay 5% more for your house. We even offer selling solutions that pay homeowners more than market value!
Is the offer you received really a low ball? Perhaps it’s not. Maybe instead you’re asking way too much, and the buyer is offering you a fair price. Review your comparable sales report or have a new one prepared and make sure your expectations are rooted in reality.
When thinking about selling a home, 1 factor to success always holds true: homeowners must treat the sale of their house as a business transaction and nothing more. At the same time, it can be hard to not take getting lowballed personally. After all, you’ve proudly maintained and have called this house your home for years.
Although it might make you feel good in the short term, you should never throw away or reply harshly to lowball offers. Doing so does nothing to accomplish your goal of selling your home. The fact that someone wants to buy it is a great thing, and you should respond to every offer because, as you’ll read, lowball home situations can turn into exactly what you’re looking for. Here are the most effective comebacks to lowball house offers:
Think about the last time you bought a home, was your first purchase offer at or above the asking price? We didn’t think so (unless you bought during the 2021-22 real estate bubble). Remember that, in fact, expect low ball house offers because, like you, buyers want to get the best deal possible. Be glad you have an offer and remain calm so that you can effectively respond (more on this below) to the home selling opportunity. If you react combatively or negatively, you might be building a wall where there could have been a bridge.
Snapping back also drags the buyer into a like mindset, making it harder for you to get what you want from them.
For instance, a few years ago our central Texas real estate investors sent what a seller considered to be a low-ball purchase offer. The seller’s reaction was one of disgust and they told Phil and Will to leap off a bridge.
This seller let their emotions go to the extreme, countering back with a sale price that was nearly double the home’s true market value. What did our homebuyers do? They responded to the seller’s counter in a calm, cool, and collected manner when offering to provide a free comparable sales report and asking the seller what they needed to get out of the home.
In the end, cooler heads prevailed when the seller realized we were serious house buyers who would provide multiple benefits like a free local move, a cash advance, and the ability to make cash offers on their next house with our sell and stay program.
Our local investors initially offered $25,000 less than what the seller wanted but upon realizing how serious we were about buying their home, the seller countered at $5,000 below their asking price. The firm stance the seller took showed 2 critical things: they were willing to negotiate a fair home sale price and their $5,000 counter sent an unmistakable message – I’m interested in, but I am not desperate to sell. Long story short, the homeowner ended up selling for $11,000 less than asking and they were able to take advantage of our industry leading program to sell and stay in their home 180 days after closing.
As is human nature, most home sellers are drawn to the highest price. However, buyers like GVH can provide terms that are more lucrative than the sale price itself. So, while you might be stalled on price, make headway elsewhere on terms that could make the offer more appealing to you, for instance: (a) no mortgage approval contingency, (b) no contingency that the buyer sells their current home before buying yours (c) no home inspections, appraisals, showings, and home repairs, (d) you choose the closing date, and (e) ask for multiple home selling options to pick from.
There’s no way of knowing for sure the reasons why you’re getting lowballed house offers. But when you do, you have 3 options:
The first 2 choices are confrontational and do absolutely nothing to advance your goal of selling your home. Option 3, therefore, is your best course of action. By countering with a minor concession, you can quickly figure out how serious your buyer is. Do they counter back and up their offer substantially? If they don’t, you can stop wasting your time and you will know that getting lowballed was the buyer’s plan to fish out a deal too good to be true.
1. How can I request a counter offer without making any commitment?
Use the Texas Association of Realtors form ‘seller’s invitation to buyer to submit new offer’ and email it to us at Thrive@GoodVibesHomebuyers.com. This makes it clear that you do not accept our original offer, however, that you’re willing to consider another offer if we make substantial changes.
2. What is an easy way to get lowball house offers raised?
We can speak only for our investment company when answering this question. If our offer is under your expectations, but your asking price is not based on real and recent comparable sales data, then our offer is probably much closer to your home’s real market value than you might think. On the flip side, our investors are good, not perfect, so if you feel we missed something that affects how much we should be able to pay, let us know and we’ll take time to reevaluate what makes your home special.
Our job at Good Vibes Homebuyers is to get you the most money with the least amount of hassle, so that you end up at the closing table! If you have received what you consider to be a low-ball offer and you want winning home offers – don’t get mad. Just counter. And get your property sold using our simple and certain process. Contact us today!
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