Carol-Ann Palmieri & Al Mussi's Blog
Receiving a low offer on a home can be frustrating for a seller. But, you’re likely to see at least one or two offers on your property that are lower than you would like.
Right now, the housing market is filled with young professionals burdened with student loans, rising costs of living, and stagnating wages. So, it’s no wonder that they’re trying to save money anywhere they can.
In today’s post, we’re going to talk about what to do when you get a low offer so you can set yourself up for a sale that you’re happy with.
Don’t refuse outright
The first thing to know about low offers is that they can sometimes turn into something that both you and the buyer are happy with. Many successful home sales started at a number that the seller considered too low, but--through negotiation--was brought to a higher price and better deal overall.
Many sellers are uncomfortable with the idea of negotiation. Most people seldom negotiate prices unless they are buying a car, and even then would prefer to avoid the hassle.
For others, negotiation is a normal part of everyday life. Flatout refusing an offer, especially if you aren’t receiving many other higher offers, could be a missed opportunity.
Compare your asking price with similar homes nearby
Odds are that you and your agent have already done your research and found an asking price that is comparable in your neighborhood. But home prices fluctuate. To reassure yourself that your asking price is fair, take another look at homes up for sale that are around the same age and size of your home.
Take time to craft a counteroffer
Once you’ve had time to talk the offer over with your family and real estate agent (and maybe vented a bit), it’s time to come up with a counteroffer.
There are a few options for making a counteroffer that don’t involve significantly lowering the amount you stand to gain from the home sale. First, you could offer to relieve the buyer of some of the closing costs, such as paying for the inspection. Or, if you planned on leaving new appliances in the home, you could lower your asking price but take the appliances when you move.
Weigh your options
If the buyer still won’t raise their offer close to your asking price, it’s probably a good time to move on and rethink your sale strategy.
Take some time to consider the sale as a whole. If you aren’t receiving many other offers, it might be time to consider lowering to price or rethinking your marketing plan. You might consider repainting and taking new photos, or changing up your listing to highlight some other features of the house.
If you get an offer to buy your house, there is no need to make a snap decision. Instead, it generally is a good idea to allocate the necessary time and resources to analyze an offer and determine the best course of action.
Ultimately, there are lots of reasons why you should analyze a home offer, and these include:
1. You can boost the likelihood of getting the best price for your house.
An offer may fall at, above or below your house's initial asking price. However, regardless of the offer that you receive, it pays to perform a full evaluation to ensure you can maximize the value of your residence.
For many home sellers, it is beneficial to conduct a home appraisal prior to listing a residence. That way, when a home offer arrives, a seller can compare the proposal to a property valuation and proceed accordingly.
2. You can weigh the pros and cons of all of your options.
Let's face it – deciding whether to accept, reject or counter a homebuying proposal can be tough. Luckily, analyzing an offer enables you to weight the pros and cons of each option, making it easier than ever before to make an informed choice.
Oftentimes, creating a list of pros and cons can be helpful. This list will enable you to assess the advantages and disadvantages of each potential home selling decision. Then, you can use your list to guide the decision-making process.
3. You can receive expert housing market insights before you finalize your decision.
Imagine what it would be like to take a data-driven approach to decide whether to approve a homebuying proposal. Now, you can, thanks to the wealth of housing market data that is readily available to sellers.
As a home seller, you should have no trouble examining the prices of comparable houses that recently sold in your city or town. You then can use this housing market data to determine whether a proposal is "fair" based on the current real estate market's conditions.
Of course, as you assess a home offer, it often helps to collaborate with a real estate agent. This housing market professional knows exactly what it takes to sell a house – regardless of the real estate market's conditions. As such, he or she will enable you to conduct an in-depth review of any homebuying proposal, at any time.
A real estate agent also is happy to help you after you determine whether to accept, reject or counter a proposal. If you accept an offer, a real estate agent will help you move forward with the home selling journey. Or, if you reject an offer, a real estate agent will show you how to promote your house to potential buyers to boost your chances of receiving better proposals in the future. And if you counter an offer, a real estate agent can negotiate with a buyer's agent on your behalf.
Evaluate a home offer closely – you'll be glad you did. If you perform a deep analysis of a homebuying proposal, you can assess a home offer from multiple angles and make the best-possible decision based on your individual needs.
If you’re a first-time homebuyer you might be worried or anxious about the process of making an offer on a home. After all, negotiating isn’t something most of us look forward to on a day to day basis and we try to avoid it when possible. When it comes to buying a home, however, negotiating is usually part of the process.
One of the benefits of working with a real estate agent is that they have the knowledge and expertise to help you out through the negotiation process. Not only will they help you formulate your offer, but they’ll also present the offer for you and handle the in-person negotiations.
Buyer’s vs seller’s market
Whether or not the odds are in your favor depends on many things. One important factor is the state of the real estate marketing. In a seller’s market, which is what we’re in right now, there are more buyers looking for homes than there are sellers trying to sell them.
However, you can still edge past the competition in a seller’s market if you plan accordingly. This is when negotiation comes into play, and when effective negotiation can get your offer accepted where others are declined.
Time is of the essence
When you’re shopping for a home in a seller’s market, you’ll need to be swift with your offer and counteroffers to stay ahead of other prospective buyers. However, being too hasty with your offers can seem imposing or reckless. It’s better to take a day longer to come up with a more effective offer than it is to make an offer that looks bad to the seller.
Be clear and concise
Just as you’re nervous making offers on a home, sellers are usually nervous fielding them. So, if you want to make things easier for you and your seller, make sure your offer is simple and straightforward.
This involves removing unnecessary contingencies and sticking to the contract basics--inspection, appraisal, and financing. If the seller receives another offer that is riddled with contingencies, they might prefer to work with you since you presented them with a simple contract.
Having your paperwork in order, getting preapproved, and making yourself available as much as possible will go a long way in the negotiation process. Now more than ever it’s important to be well-organized.
Do your homework on the house and neighborhood you’re interested in. Make sure you know if there is a lot of interest in the area and the house in particular. This will let you know how much breathing room you have.
Getting preapproved will not only help you know the limits you can offer but it will also signal to the seller that you’re a serious buyer.
Deciding whether to accept a buyer's offer to purchase your house can be exceedingly difficult. Fortunately, we're here to help you assess the pros and cons of a homebuying proposal and ensure you can make an informed decision.
Now, let's take a look at three tips to help you determine whether to accept an offer to buy your home.
1. Examine the Current Housing Market
The current housing market may play a role in your ability to stir up interest in your house. In addition, the real estate sector may impact whether you're able to receive multiple home offers at or above your residence's initial asking price.
To understand the present state of the housing market, you should look at the prices of recently sold houses in your city or town. If houses are selling quickly, you may be operating in a seller's market. Or, if houses linger on the market for many weeks or months before they sell, you may be operating in a buyer's market.
Ultimately, a seller's market may lead to many offers on your house in the foreseeable future. If you receive an offer that fails to match your expectations when you're operating in this type of market, you may want to decline or counter the proposal in the hopes of receiving superior offers down the line.
On the other hand, it usually requires hard work and persistence to sell a house in a buyer's market. And if you receive a competitive homebuying proposal in a buyer's market, you may want to accept this offer.
2. Consider Your Home's Condition
The condition of your house may prove to be a critical factor as you debate whether to accept an offer. If you assess your house's condition closely, you may be better equipped than ever before to make the best-possible decision about a homebuying proposal.
If you feel a home offer is fair based on the current condition of your house, you may want to accept the proposal. Conversely, if you feel a buyer has submitted a "lowball" proposal based on your home's condition, you should not hesitate to reject or counter this offer.
3. Consult with a Real Estate Agent
When it comes to evaluating a homebuying proposal, it generally is a good idea to collaborate with a real estate agent. This housing market professional can help you weigh the advantages and disadvantages of accepting an offer and determine the best course of action.
Typically, a real estate agent will present a buyer's offer to you and offer recommendations about how to proceed with this proposal. As you assess all of your options regarding a homebuying proposal, a real estate agent will be able to respond to any concerns or questions that you may have too.
Ready to take the guesswork out of reviewing a homebuying proposal? Use the aforementioned tips, and you can streamline the process of deciding whether to accept an offer to purchase your home.