In real estate, all parties involved are trying to get the best deal possible. For homebuyers, offering a lowball offer — one significantly below asking price — is a risky move that can either result in snagging a bargain or losing a desired home before negotiations even begin.
Learn More: I’m a Realtor — This Is Why No One Wants To See Your Home
Check Out: How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
Sellers still hold the upper hand in today’s market, but that doesn’t mean they can afford to ignore offers that fall below their financial expectations. According to real estate experts GOBankingRates talked to, a lowball offer is just a starting point and something sellers shouldn’t dismiss out of hand.
Here are five things you should do if you receive a lowball offer on your house.
Trending Now: Suze Orman’s Secret to a Wealthy Retirement–Have You Made This Money Move?
Don’t Take It Personally
Lowball offers are common in real estate circles and a part of any trade or business transaction. As a seller, you know your end of the deal, but the buyer’s motivations will largely remain a mystery.
“The first thing I’d mention about a lowball offer is that it isn’t an insult, it’s a data point,” said Rachel Fiegler, co-founder and realtor at Pinpointe Group in New York City. “Sellers are allowed to feel emotional about their home, but my job is to eliminate that emotion and use the offer to gather intel.”
Jeff Lichtenstein, CEO and broker at Echo Fine Properties in West Palm Beach, agreed.
“Never be insulted,” he stated. “It’s key to take emotion out of it. Once a party writes an offer, often one party starts to visualize themselves in there and just has to have it. You can’t get an offer done if an offer isn’t written.”
Consider This: Barbara Corcoran — This Is the ‘Real Problem’ With the Housing Market Right Now
Evaluate the Offer Objectively
If you’re working with a realtor worth their salt, you should have arrived at a competitive price. But you’ll inevitably be surprised at the offers that come in once your property hits the open market.
“There are so many variables to a lowball offer, mainly starting with what the buyers motivations are and whether they are serious or not,” said Michelle Mumoli, real estate broker with Compass. “This is going to be controversial, but many new buyer agents may not actually know enough to help their buyers make an informed offer.”
“It depends on how low the offer is,” said Adam Hamilton, REI Hub’s co-founder. “If it is unreasonably low compared to the listed price, you don’t necessarily have to pursue negotiations with that buyer. You can wait it out or even just directly tell the buyer no.
“But, if it’s not unreasonably low, you can negotiate,” he added. “Buyers’ initial offers will be lower than what they are actually willing to spend, so negotiating is key.”
Treat It as a Starting Point
A seller is in the enviable position of offering an in-demand property into a competitive market with an anchor price that will influence how buyers bid. That won’t stop prospective buyers from undercutting your confidence.
“It’s been my experience that most of my clients find lowball offers frustrating,” said Charissa Bright, owner and founder of Bright Buys Houses. “But instead of getting insulted and walking away, I always tell my sellers to treat it as a starting point, not a slap in the face. It doesn’t mean your home isn’t worth what you’re asking. It just means the buyer is testing the waters or maybe hoping to snag a deal.”
Negotiate Strategically
Obviously, price is the main discussion driver for both the homebuyer and seller. But if both parties can’t come to financial terms, that doesn’t mean other contingencies can’t be negotiated. Things like a higher deposit or faster closing timeline could make all the difference, according to Sarah Strohschein, an Atlanta area agent and advisor with Engel & Völkers.
“It’s also worth looking beyond just the number — some low offers come with favorable terms like cash, a quick close or minimal contingencies, which can carry significant value depending on your goals,” Strohschein explained. “And while it may feel like a waste of time, every offer — whether accepted or not — provides useful insight into how the market is responding.”
“I also could use [a lowball] to get other offers,” said Fiegler. “Sometimes a lowball wakes up other prospects. When word gets out that an offer (any offer) is on the table, sideline buyers come in with stronger numbers. I pay attention to see if it becomes a pattern.”
Trust Your Realtor
If a buyer isn’t sincere, the seller and their realtor can move on from them immediately. But lowballs, cash purchases and walk-away points are things you should work out with your agent prior to listing, when emotions aren’t in question.
“My experience working extensively with both sellers and buyers, is setting expectations up front,” said Mumoli. “So, if I know a buyer will come in too low, I will make them aware of all potential scenarios that will play out from that lowball offer.”
“If it’s a steady stream of lowball offers, then it suggests our price or property condition is scaring away qualified buyers,” Fiegler said. “That feedback lets us recalibrate, whether it’s a strategic price adjustment or targeted improvements.”
More From GOBankingRates
-
I’m a Realtor: This Is Why No One Wants To See Your Home
-
3 Things Retirees Should Stop Buying To Save Money Amid Tariffs
-
How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
-
7 Wealth-Building Shortcuts Proven To Add $1K to Your Wallet This Month
This article originally appeared on GOBankingRates.com: 5 Things To Do If You Get a Lowball Offer on Your House, According to Real Estate Agents
