Selling your house? What to do with a lowball offer
With interest rates at their lowest levels in decades and a huge choice of inventory at the moment, quite a number of home buyers and investors are making really low offers to purchase in the hope of picking up property “bargains”.
But rather than taking offence and immediately rejecting these offers, sellers need to take a deep breath, recognize that they are (in most cases) only intended as opening bids in a negotiation, and get ready to make counter-offers as that negotiation proceeds, says Berry Everitt, CEO of the Chas Everitt International property group.
“Sellers should take the view that even a low offer is better than a total lack of interest, because it has a potential to lead to a satisfactory outcome - if handled correctly by a qualified agent with excellent negotiating skills. And of course they always retain the right to accept or reject any offer at any stage before the sale agreement is signed.”
On the other hand, he says, it is important to recognize that there is so much market information available online now that serious buyers will have a very good grasp of current trends, of what constitutes good value for money, and of selling prices rather than asking prices in the areas they prefer.
“In addition, the real estate sector is constantly becoming more efficient, with technology enabling prospective buyers to quickly sift out both unsuitable and overpriced properties during their preliminary home searches.
“Very likely, they will also have had even more time during the Covid-19 lockdown to really scrutinise online listings for good value – especially since, with physical viewings not being allowed, agents have been working hard to improve their listings with additional photos, video walk-throughs and virtual tours.”
And on top of that, Everitt says, an increasing number of buyers these days consider it prudent to obtain pre-qualification for a home loan, so they know exactly what they can spend and are ready to make an immediate offer when they see a property that they like and that they believe they can “land” within their budget.
“The one thing that buyers don’t know, however, is the difference between the advertised price and the price that a particular seller is actually prepared to accept. And in an attempt to discover that number, the negotiating style of some of them will be to start with a really low offer – which they actually don’t expect will be accepted – and work their way up.
“This is why it is so important for sellers to be able to trust that the agent to whom they give their mandate is a good negotiator as well as a good marketer, and can keep a cool head while retaining the buyer and guiding the transaction towards a win-win conclusion.”