Wednesday, February 13, 2019 / by Amber Tice
Getting an offer on your home is very exciting. Then, your agent presents the offer and you realize it’s not what you were expecting. Disappointment might be at the forefront of your mind, but don’t give up hope just yet! What do you do next? Answering an offer which is not acceptable is a matter of strategy. Here are a few of the strategies used by successful listing agents to handle a low offer.
The most common way to respond to a low offer is to send the buyers a counter offer. You can counter at the list price and terms to show you are firm on price, or come down and offer something in between list price and the offer. Be careful though, a buyer could walk if they don’t want to pay full price for the home. This could either be because they simply can’t afford it, or they don’t feel like they are getting the most for their money. Either way, consider negotiating with them before making a decision. Listen to your realtors advice and make the best decision for you and your family.
Highest and Best
This strategy allows the buyer to revise their offer, should they choose. This is most often used in a multiple offer situation, but works just as well with a single buyer who needs to know their offer isn’t acceptable. Some buyers might not bite with this strategy. They may feel frustrated that you are unwilling to negotiate, and they could just walk away.
Include Terms in Negotiation
The price is not the only part of an offer which can be negotiated; the terms can also be changed. Sometimes a seller can get a higher price by offering longer escrow or adding furniture. A buyer may negotiate terms as well. Sometimes a buyer can get a lower price by offering to put up more earnest money, shortening their inspection window, offering a quicker close (if their lender can make it happen), or by making a bigger down payment.
Reject the Offer
There is no reason to respond to an offer which isn’t even close to acceptable. A seller can reject the offer completely. Hopefully, a buyer’s agent is advising their client what a reasonable offer would be. However, it is important to remember that not everyone takes the advice of their agent. The amount a buyer offers on a home is completely up to them. Try not to become insulted by really low offers. Keep your feelings in check and try to understand that you don’t know the situation on the other side of the transaction.
Keep Your Ego in Check
As a seller, if you decide to negotiate with a buyer, it is important to put yourself in their shoes. If you decide not to negotiate certain repairs, ask for highest and best offers, or decide not to negotiate price it is possible your buyer will walk away. This can have ramifications for you as a seller. You may be thinking “I’ll just put my home back on the market and wait for the next person willing to pay full price, or more.” Stop! This tactic doesn’t always work.
When a home is listed in the multiple listing service database as “back on market”, or “BOM” this could put up red flags for buyers. Their immediate reaction usually is “What is wrong with the house?” You are now in danger of your home going stale, and buyers then become unwilling to offer full price, or even come take a look at the property. Also, keep in mind, if you are selling a home, you most likely need to find another one. You then become the buyer and the roles are flipped. You are all of a sudden faced with the same challenges as the person who just purchased your home.
Take advantage of your new knowledge of being on both sides of the stick when buying and selling real estate. If you can absorb as much information as possible during the process whether you are a buyer, or a seller it will be easier to walk down whichever real estate path your life takes you.