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Recently a buyer decided to make an offer on a house that had been on the market for some time. His agent showed him comparable sales information, which indicated that the list price was too high. So, he made a low offer.
The offer price was lower than the seller was willing to accept, so he didn't respond. When the buyer learned that his offer was going nowhere, he asked the seller to give him a counteroffer. The seller did and the buyer accepted. Thirty days later the sale closed.
Another seller was so offended when the buyers' agent presented him with a low offer that he asked the buyers' agent to leave his house. Again, the seller refused to respond to the offer. After many hours of persistent conversation, the seller's agent talked the seller into issuing a counteroffer to the buyers. They accepted and the listing sold.
A seller's reaction to a low offer may be outrage or despair. Some sellers feel insulted by a low offer and want to wait for a better offer, which usually means a higher price. Others feel that countering a low offer is a waste of time.
HOME SELLER TIP:
Receiving a low offer is disappointing. But, before rejecting it, try to find out something about the buyers and, particularly why they offered the price they did.
The buyer could be used to negotiating in his line of work. For such a buyer, offering less than the asking price may be nothing more than business as usual. Buyers want to buy at the lowest price possible, just as sellers want the highest price possible. Don't fault a buyer for trying to get a discount, particularly if he's well qualified and sincere in his desire to buy your home.
Buyers often don't know in advance how high they'll be willing to go in order to get the home they want. Sellers may not know their bottom line until they get into the negotiations. Even if a buyer says he won't go higher than a certain price, he may be willing to pay a little more if it makes the difference between putting the deal together and no deal at all.
You may discover that the buyer offered a low price because he thinks your home is listed too high. If so, find out what comparable sales he's using to support his price opinion. Out-of-area buyers and agents may not be up on current market value. In this case, provide comparables sales information that validates your price.
If the buyer's comparables are the same as yours, one of you needs a reality check. Sellers can let pride of ownership get in the way of making a rational decision about selling their home. The better price you dream of may not be forthcoming. Buyers tend to offer less for listings that have been on the market for sometime. Keep an open mind to any offer from a well-qualified buyer.
Most sellers focus on price, sometimes overlooking other terms of the offer that could be negotiated to their advantage. For instance, let's say you're closing on a new home in a few weeks and want to avoid paying for interim financing. It might be advantageous to accept a lower price on the home you're selling provided the buyer agrees to a quick close.
THE CLOSING:
Before countering any offer, make sure the buyer is qualified. If the buyer isn't already preapproved, include a provision in your counteroffer that requires the buyer to be preapproved within a day or two.
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