It is no secret that today’s real estate market is favoring sellers. Inventories are low, prices have risen, and the average time a home is on the market has decreased. Even in the current Sellers market, buyers commonly state, “I want to get a great deal.”

Many buyers will feel empowered to place low offers on properties, on the hunt for the best deal possible. Sellers often become offended by low offers and refuse to negotiate and discourage submission of such an offer. Selling a home is a highly emotional experience, even in a strong real estate market. It is understandable why sellers would be hesitant to respond to a low offer, but sellers need to recognize that a low-ball offer is not an insult; rather it is a starting point in the negotiating process.

Why did they low-ball me?

A buyer may have several motivations for placing a low-ball offer.

They are unfamiliar with the market

Qualified buyers looking at properties have connected with a Realtor who should be educating them on the market and what to expect when negotiating. However, some buyers need to experience the market before believing it. Perhaps their last experience purchasing a home was in a Buyers market, when they were able to negotiate a significantly lowered contract price. It may take loosing a few homes for them to acknowledge the true market value in the current marketplace.

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They are investors

Investors are aggressive negotiators. Their purchases have very little emotion, it is about the dollar. When an investor places an offer, they are taking into consideration updates, repairs, and return on investment in a short period of time.

You are overpriced

Maybe the low-ball offer iisn’t so unreasonable. It is critical to continually evaluate your list price against the market and showing feedback. An experienced Realtor will keep a seller up-to-date and not be afraid of difficult conversations. Every Seller needs to be aware of the market reality.

What you see as a value, they may see as an expense

The graveled backyard may be low maintenance, but the buyer may be counting the amount of money it will cost to install sod and an irrigation system. What has value to one homeowner sometimes has the opposite to another.

What should you do with a low-ball offer?

It is difficult to evaluate the true motivation of a buyer or seller without seeing a negotiation through to completion. We’ve experienced many successful deals come together that at first were unreasonably low, with prices moving more than $50k through negotiating. Sometimes it may reach a dead end, but often it ends up in a successful closing.

Our advice is to look at every written offer that comes your way, no matter how low it is.  It is the difficult offers that make it imperative that you choose the right Realtor. With experience and knowledge, you can be guided to properly negotiate and ensure your expectations are in line with the current market.