You invested a lot of blood, sweat and tears (and money!) into your home. You raised your kids here. You celebrated many birthdays and Thanksgivings here. When it comes time to sell your home, you may find it difficult not to become insulted by a low-ball offer that gets presented. Here is some advice for how to handle offers that fall significantly below your asking price.
- Is it really a low-ball offer, or is it just less than what you wanted? Depending on your local real estate market and the inventory of homes for sale, many real estate professionals consider a low-ball offer to be between 20% to 25% below list. Even then, the price range your home is in makes a difference as well. While an offer of $75,000 on a $100,000 home would likely be rejected, a $1.5 million offer on a $2 million home would more than likely be considered for negotiation.
- Should you reject a low-ball bid right out of the gate? While it may be tough trying to set aside hurt feelings, remember, someone is showing interest in purchasing your home, and that’s a good thing. In this mindset, you should counter every offer – unless it’s just totally ridiculous. What’s constitutes a “ridiculous” offer? Anything significantly less than 25% below your list price should be a red flag. If you find yourself in this position, rely on your realtor’s expertise to help determine an appropriate response. Usually, a good rule of thumb is to counter a low offer to send the message that you are willing to negotiate and work with the right buyer. After all, it’s not where buyers begin, but there they end up. However, if you allow your emotions to affect your judgement, you may never get to that final number.
- Is your home priced right? If you receive one or more low-ball offers, you may have to consider that your home is priced too high for the market it’s currently in. Before you set a list price, your agent will provide you with comps, which are comparable listings of properties for sale that are similar to yours in the area. Your agent will also give his or her expert recommendation on where your home should be priced at. It’s wise to choose a price that reflects the comps so that you can be competitive and get reasonable offers. If you start out too high and have to reduce your price later, you are just delaying the sale of your home and spending more days on market. You don’t want your home to spend too may days on market and risk it becoming a “stale listing”. In today’s Tampa Bay area real estate market, a home for sale that is on the market for over 65 days is going to lose buyer interest and will most likely be considered overpriced.
- What factors are important to you in selling your home aside from the price? Do you need to sell quickly because you are purchasing another home? Are you looking for an all-cash deal? There are certain incentives that can sweeten a deal that may make looking at a lower offer worth your time. They may include:
- A preferred closing date
- A solid mortgage pre-approval letter fro the buyer (not just a pre-qualification)
- A larger down payment
- Fewer inspection contingencies
- Don’t worry about looking desperate. Perception doesn’t matter when you entertain a low-ball offer. What matters most is the end result. Don’t get caught up in feeling offended when faced with an “insulting” offer to the point where you cut off communication with the buyers or their agent. This reaction won’t help you sell your house, and it’s worth it to get feedback from every offer, regardless of how things turn out.
Lastly, choose an experienced real estate professional who knows the market. NextHome SunRaye real estate professionals live and work in the Tampa Bay area and stay current on local market trends. Our 30+ years of real estate industry knowledge and experience drives our success, as it has helped us build valuable relationships with clients, as well as a sizable amount of referral business. If you are looking to sell your home in Tampa Bay, give our office a call at (727) 343-8600 to discuss your home’s value and how we can help you sell in this market. When you enlist NextHome SunRaye to sell your home, we ensure a swift and smooth transaction as well as a stress free experience.
Image via Flickr by Roger W