Three tips on how to handle a low offer

It is a pretty amazing feeling for home sellers when the offers start coming in. However, that excitement can quickly be shrouded by a low offer, or an offer that is far lower than their asking price. But once the seller gets over the initial shock and that slightly insulted feeling, they’ve got to make a decision.

Does the seller counter the offer and try to get to a price point that is more reasonable? Does the vendor refuse to acknowledge it and have the real estate agent turn the prospective buyer away for submitting such a ridiculous offer? Before a seller makes any decision on a low offer, they need to consider these three things:

1. Is it really too low to consider?

As shocking as a low offer can be, it also can be a bit of a reality check. What seller doesn’t want buyers competing for their home, which can result in a sales price that exceeds the asking price? Unfortunately, that is not a reality for everyone—even during the busiest seller’s markets. So, when a low offer comes in, try to put it into perspective. Is the offer simply lower than the price they were hoping to get for their home? If they’re asking $450,000 for their home, and an offer of $445,000 comes in it probably doesn’t qualify as a low offer. With that being said, the vendor doesn’t have to accept any offer. But, an offer that is only slightly lower than the asking price is still one worth considering—even if the seller decides to counter.

2. Is the asking price too much?

If a low offer is the only offer, or a vendor receives a series of offers that just don’t measure up to their asking price, it may be time to take another hard look at their listing. Setting the right price for the home is crucial to selling when you’re first on the market. At the time a seller decides to list, their real estate agent should complete a comparative market analysis to make sure the asking price is reasonable, based on other similar homes that have recently sold or are currently listed. If a vendor sets their own price, they may let their emotional attachment to their home or their knowledge of all the money and work they have put into the home set a price that puts them right out of the market. If they are finding that they are only receiving low offers, the vendor may need to reset the price of the home, so that it is more competitive. In this case, just know that the seller may also prolong the sale of their home.

3. Is there something that might sweeten the deal?

When it comes to the vendor’s decision to consider a low offer on their home, it may help to consider a few other factors of the sales process. If they’re selling and buying a new home at the same time, it may benefit them to entertain a low offer, so that they can move according to their own schedule. If the low offer comes with little to no special conditions attached, it may also be worth considering. Finally, if a low offer is accompanied by loan preapproval, the vendor may also be looking at a smoother closing process. Don’t simply consider the low offer alone, but look at what other factors, such as a flexible settlement, which may contribute to the sale before they turn any offer away.

Though a low offer on a vendor’s home may not be an ideal offer, they should know that it may not be as bad—or as low—as it seems. Before a seller simply ignores an offer that doesn’t seem as sweet as they’d like and close the door on a potential home sale, consider these few factors first.

                              email: kooweerup@oneagency.com.au                    web: oneagencykooweerup.com.au

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Three tips on how to handle a low offer