How Should You Respond to a Low Offer on Your Home?

By Kandie Frederick

Growing up on the central coast, Kandie is a third generation family in the North County and a second generation family in real estate. Joining Country Real Estate in 2000, and graduating from Cal Poly in San Luis Obispo, she brings a background of Agricultural Business to combine with her knowledge of the local real estate market. Working with her family and their decades of local real estate development, she is deeply connected to the roots of our community and its growth.
“This area continues to grow as people discover what a great travel destination it is, and what a great wine region it has become. Eventually, they realize what a great place it is to live and work as well. Adapting to the needs of our clients in a changing environment is always a priority. We remain the longest standing brokerage in a community we are deeply invested in. Our longevity is attributed to our innate ability to understand the North County: its people, its properties, and its culture.” -Kandie

Recently, I received a call from a friend asking about a “lowball” offer they received while trying to sell one of their out-of-area properties. Even though they had priced their home very reasonably, this offer was well below what they were expecting, and frankly, it offended them. So, what was happening? As it turned out, this offer came from an investor.

Offers from investors are becoming more common again. According to Business Insider, 44% of homes in the U.S. were purchased by investors last year, and this number is expected to increase.So, if investors pay below market value for homes, why do so many people accept their offers? Does it make sense for you to consider an investor offer when selling? To answer these questions, today, I’m going over three benefits of investor offers you could consider when selling your home.

1. Investors don’t care about the condition of your home. To get top dollar on the open market, you usually need to put in a little work. Painting, landscaping, staging, marketing, repairs, and more are necessary to truly maximize your sale. If you don’t have the time or money to put in this work, or you just don’t want to deal with the hassle, you might want to consider an investor offer. They will pay for your home as-is.They are usually cash, which means there is no loan or other condition requiring those repairs to be made.

2. (Almost) Always counteroffer. So, you’ve checked the comps, your home is still as valuable as you thought, and your buyer isn’t moving. What now? In my opinion, it’s always worth it to counteroffer unless you suspect the buyer isn’t acting in good faith. If the buyer rejects your counteroffer immediately and insists on their lowball price, you can safely walk away knowing they were probably just fishing around for a deal from unprepared sellers.

3. Compromise on other terms. One of the reasons why your buyer may have offered a lowball price upfront is because they don’t have enough money to offer the full asking price. While many sellers see this as a dealbreaker, I highly recommend at least hearing your buyer out. Chances are, they’ll be willing to give you great terms on other negotiating items to make up for their lower price. For example, if you need a longer close, shorter inspection period, or other contingencies waived, you might be willing to budge on price. However, if price is the main sticking point, I recommend offering something like covering the buyer’s closing costs or buying down their interest rate to free up cash.

Dealing with lowball offers isn’t fun, but it’s necessary if you want to get the best deal possible for your home. If you have any questions about our spring market, lowball offers, or something else, please call or email me. I am always willing to help!