Designing a Mortgage That's Right For You!
Would you know what to do if someone offered you a lowball price for your rest estate investment? It can be pretty frustrating at first to receive lowball offers for your home. Buyer's markets are more likely to see low ball offers than seller's markets. The selling process of a home requires negotiation, and a lowball offer is better than none. Sellers should consider this before they reject a low bid based only on their emotions.
It's your intention to get the most money possible for your real estate investment, and you have set your sights on a reasonable price.
There's nothing wrong with getting the lowball offer, but it can be upsetting. You should consider every offer – unless the submission is just outrageously low. This is where the art of negotiation is necessary for all real estate professionals.
As the name implies, a lowball offer is one that is largely below a seller's asking price or a quote that is substantially lower than the seller's price expectation. Another meaning of lowballing is to give a false estimate knowingly.
In real estate, most typical "low-ball offers" are around 10% less than the listed market price on the property.
Usually, the potential buyer making the low-ball offer is not actually expecting the seller to accept; instead, buyers can use it to start or push forward negotiations.
A low-ball offer is typically used to encourage a seller to sell assets quickly, particularly when a seller may need to liquidate assets. Prospective buyers may also begin negotiating a price with a lowball offer to gauge a seller's assessment of value. Negotiations can be more successful in the buyer's favor if the buyer has this information.
Offering a meager price works best when the buyer has the upper hand, giving them room to negotiate. Trying to low-ball the sale price in a tight housing market might not necessarily lead to good results if the seller already has the edge.
Despite the frustrating nature of lowball offers, a home seller can focus on the more important goal of selling their house and stop focusing on the lowball offer itself. Getting offers really just means, it's negotiation time.
You could be offered a much lower amount than your price range for a variety of reasons. Often homebuyers make low offers to start as a gesture of good faith that they won't pay too much.
Your home is of interest to them, and they are eager to get the negotiations started. So you shouldn't be alarmed if an offer is low.
Always respond with a counteroffer, regardless of whether the buyer feels your home is priced too high or believes no offer should come close to the asking price.
A lowball offer can be countered in several ways. Countering a low ball offer to your lowest and final price that you are willing to accept is one of the top negotiation strategies. The buyer and you won't have to correspond much back and forth.
The seller and their Realtor may also use the strategy of countering back to the original offer after receiving a lowball offer. Having a serious offer instead of an insulting low-ball offer can demonstrate to a buyer that you are not going to play games. A counteroffer at a full price might deter a buyer from continuing to pursue the property further, however.
It's ideal to consult your trusted real estate agent with the methods of negotiation to ensure you're getting the most out of the sale of your real estate investment property.
For more information contact us, the Mortgage Designers, Your Victoria BC Mortgage Brokers of Choice today!