What do you do with a lowball offer when you know your home is fairly priced?

Asked by Blair Miller, Scarborough, ME Thu Aug 30, 2012

Our condo is listed at $140,000. We received an offer of $120,000. Our condo has technically been on the market since October of last year (it was under contract for about a month and half before it fell through). But based on the comps, it is very fairly priced.

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11
Murphy Team, Agent, Portland, ME
Sat Mar 22, 2014
Best not to "just say no". Could be that this particular buyer will come up to your desired price but is testing the water to determine your motivation and/or ability to negotiate to a less than asking price.
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Annette Law…, Agent, Palm Harbor, FL
Fri Mar 21, 2014
This question posted Aug 2012.
Confidence is high Blair has solved this over the course of two years.
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Laura B Byth…, Agent, Portland, ME
Fri Mar 21, 2014
Hello Blair, after 21 years in real estate , I can tell you 95 % of the time the first offer is the best one
to work with. I am not saying you should take $120 .But if you have a strong , full time professional
working for you, they will tell you to counter the offer and pull it as high as you can.
I have found over the years when you wait for the next buyer, they can come in lower each time.
The quicker you can sell the higher the offers. IE : simply waiting for another buyer to come along and
be willing to pay more just does not happen that way.

The seller sets the price but the buyer determines its' value based on the other properties you are
competing with. I hope this helps. If you get an offer right away , that is a good thing!
my cell 207-838-9990
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Ronald Hutch…, Agent, Harpswell, ME
Fri Aug 31, 2012
Hi Blair,

Did you list the condo with a Broker or are you all on your own with this? In today'smarket, correctly priced or not - most sellers understand the first offer will be lower than they'd hoped for. Don't take it as a personal assault or insult. Be happy you've got a party interested enough to make an offer - try and work things out with them.

I too think a $120k offer is a good place to start. If you believe your condo is properly priced, you need to give evidence to the buyers and prove your price position. You also need to give the buyer some price concession as you want them to feel as though you're sensitive to their needs and are willing to work with them. They need to feel they've won. If you can prove your price position with local comps and offe them a $5,000 concession - you just might have a deal.

Good luck!

Respectfully, Ron H
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Pat & Steve…, Agent, Westlake, OH
Thu Aug 30, 2012
From your question, it appears that you did not use a seller's agent to sell your condo. In my opinion, that's part of your problem. You need to decide what you can afford to do. What is the minimum amount you can sell your condo for to be able to move to your next home. If I were you, I would counter the offer to see what their highest and best offer is.
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Charlene Ham…, Agent, Camden, ME
Thu Aug 30, 2012
Blair,
I don't consider that a lowball offer. It sounds like an opening offer to me to see what kind of flexibility you have.

Condos are tough to sell - it is hard to get FHA approval for many units these days. Is your condo approved for FHA financing? You can ask your agent to contact a lender they work with to get the checklist.

If FHA doesn't approve it, then it is up to the bank - and that is 5, 10, or even 20% down

If you want to sell, I would suggest you counter and try to get it under contract. I have had sellers who turned down an offer and then a year later took a much lower offer - so the risk is that if you turn down the buyer, you won't see another one for a while.

Have you had a lot of showings? Have you had any other offers? How does this offer compare to the one that fell through? If you are seeing a lot of activity, then I would say it is fairly priced. But if this is the only offer you have had and you aren't getting a lot of showings, then condo prices in your area may have fallen again.

Obviously if the market turns around, you may be able to get a higher price - BUT - no one knows when that will happen and no one even knows for sure if prices won't drop more.. all you can do is figure out what is best for you right now. If selling it is best, then do what you can to sell it!

Good luck.
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Tim Moore, Agent, Kitty Hawk, NC
Thu Aug 30, 2012
I agree with Roland, 15% lower than list is not what I call a low-ball offer. I got one on a property I have listed last month that was 30% lower - THAT is a low ball offer. All buyers make a low first offer, many think that if they come in low you will meet in the middle. Most sellers don't so make a counter but don't go down much until they come up a lot.
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Roland Vinya…, Agent, Sprakers, NY
Thu Aug 30, 2012
I would hesitate to call an offer that is 85% of asking price "low ball". On the other hand, it is not something to get excited about. Sometimes, certainly not always, we respond with a "thank you" and explain that if the offer were higher, it would be countered, but this is not high enough for the owner to take seriously. You have to know your people; that can backfire too.

In defense of the buyers, I have seen many deals accepted that were far lower than 85% and they obviously think is worth a try. After all, buyers want to get something as cheap as they think they can and sellers want to part with it as dearly as they can.
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Suzanne MacD…, Agent, Morristown, NJ
Thu Aug 30, 2012
If it were me, I would counter the offer, even if you only reduce the price by $1000 it shows your willingness to be reasonable and negotiate as long as the offer is also reasonable. Ask your agent to see if prices are trending upward or downward in your area, or you can find your listing here on Trulia and I believe you will be able to see a chart showing that information. Base your counter offer on that data. If prices are trending downward, or if they are flat, and your home has been on the market for more than 30 days, you may want to take that information into consideration in framing a counter offer.

The others are right, you also have the option of accepting or rejecting the offer, but then you have eliminated any possibility of negotiating a price that everybody is happy with. You have an interested buyer, they are testing the waters to see just how good a bargain they can get, why not at least try to get them to come up to a price you are happy with as well?
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My NC Homes…, Agent, Chapel Hill, NC
Thu Aug 30, 2012
Your choices are simple:

Accept the offer.
Counter with another number.
Refuse the offer and don't counter.

You need to understand something (as do all Sellers) You and your agent don't set market value. Market value is only set by a ready willing and able buyer. If you've been on the market nearly a year and have no other offers my advice is to work hard to make this deal work or do yourself a favor and take the property off the market.

Condos are particularly tough to sell these days as many simply do not qualify for financing (there's a variety of reasons) While I don't know your market and can't comment on whether you'ref fairly priced or not, I do know real estate and if you want to sell, my advice is to have your agent send a nice non-adversarial email to the buyer broker thanking them for their clients offer, countering with a price in the range of $135,000 and supplying all current sales data (not active listings but recent sales of comparable units within your development) backing up your price.

I wish you all the best.
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Phil Rotondo, Agent, Melbourne, FL
Thu Aug 30, 2012
Depending on your motivation to sell:
1. Take the offer.
2. Counter at a number somewhere between the list price and the offer.
3. Counter at full price.
4. Just acknowledge receipt of the offer.
0 votes
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