Once upon a time, not too terribly long ago, homebuyers wouldn’t even dream of submitting an offer for less than what a home was listed.
That, however, is so last year. We are moving into a time where it appears that buyers will have more homes from which to choose, more time to shop for a home and more leeway in asking for concessions. They will also not hesitate to submit an offer lower than asking price.
Lowball offers, those that are 10% or more off the list price, aren’t common. Yet. That doesn’t mean, however, that you won’t receive one when your home is on the market.
It’s insulting, right? It takes a lot of nerve, as some sellers claim.
Others feel a sense of panic.
When homes begin to sit on the market longer than they did in the previous hot sellers’ market, some homeowners may feel a sense of desperation when faced with a very low offer. They may suffer from that gnawing feeling that anything is better than nothing.
Let’s take a look at how you can deal with such an offer without being sucked into common knee-jerk emotional responses.
Take a deep breath
As mentioned earlier, you may not get a lowball offer. But being prepared for one, emotionally at least, will help you deal with it should it come to pass.
There are two primary reasons that some homebuyers may submit a low offer on your home.
First, there are all those “news” stories claiming that home prices are falling, rapidly and dramatically. While that may be true in some markets, it is untrue in most. Misinformation rules the day when it comes to the current housing market.
But the average person in the market to buy a home doesn’t know that.
Let’s have a look at Vancouver West for the last 12 months. The Average home price in October 2021 was $3,205,000. 12 months later in October 2022, the average price was $3,103,500, a year over year reduction of 3.2%. Keep in mind though that at the height of the market in April 2022, the average price was $3,759,000! If we compare it against that price, the reduction is 17.5% if you timed it perfectly.
Then, understand that the buyer is most likely not intentionally insulting your home or you, as the seller. Many buyers treat the homebuying process as a business transaction, which it is. Others are adept at haggling over prices in other areas of their lives and aren’t about to stop when it comes to such a huge purchase.
In other words, put yourself in their shoes. Appreciate that they made an offer at all and the valiant effort put forth to get the home at a bargain price.
You don’t have to accept the offer
How you respond to the offer depends a lot on the type of market we are in. In a market such as the one we’ve seen in the past few years, with multiple offers on homes, often over asking price, and homes selling as soon as they hit the market, it makes no sense to waste time on a lowball offer.
In slower markets, however, you may want to entertain the offer by counteroffering at a price that’s more palatable to you. You might also consider countering any concessions the buyer has requested, such as paying for a percentage of the buyers closing costs.
Or, you may want to ignore the offer altogether and that’s okay as well. The buyer’s offer will simply expire on the date specified in the purchase agreement.
If, on the other hand, the offer is acceptable to you, in both price and terms, you will sign it and we’ll send it back to the buyer’s agent. We now have an executed contract with clearly defined tasks and time limits. It’s time to take the next step toward closing.
About the Author:
Lowball offer on Kitsilano your home was provided by Regan Pyke, a Vancouver Realtor and a leader in the field of sales, marketing, and real estate investing. Regan can be reached via email at [email protected] or by phone at 778-228-2448.
Thinking of buying or selling your Vancouver West, Kitsilano home, or Condo? I have a real passion for buying and selling Real Estate, as well as marketing & real estate investing. I’d love to share my expertise!
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