When an aggressive low ball offer comes through on a real estate listing you represent, often the first reaction is for you and/or your seller to feel insulted.
Recognize that the low ball offer is typically just a tactic to see how the seller reacts. The listing agent should pre-position the seller to expect low ball offers and not react emotionally, which is sometimes easier said than done.
Defend Your Credible List Price
The best negotiation defense to a true low ball offer is a credible list price that can be defended by the market data and/or logical reasoning.
A good “anchor” is credible, defensible, and has staying power.
Sellers who over-list their property invite more aggressive offers from buyers, and sometimes even a reasonable offer will then look low relative to the over-listed price.
The seller has 3 basic options for a low ball offer: accept, reject, or counter.
Accept the Offer
Accepting the aggressive low ball offer is not normally the logical choice. There may be times when the seller is subject to extreme circumstances, but this is a rare exception. Even if the low ball offer is accepted, getting to closing could still be difficult with all the negative emotion.
Reject the Offer
One way to reject a low ball offer is for the listing agent to communicate to the buyer’s agent, “My seller will respond to a reasonable offer from your buyer but not an unreasonable offer that cannot be supported by the market data.”
The low ball offer is still a written offer and often results in an acceptable outcome for both parties. The seller’s agent needs to role model professional cooperation to set the tone for a reasonable exchange of counter offers in true real estate negotiation.Another way to reject a lowball offer is to ask for supporting data. This puts the buyer’s side on the defensive and focuses the negotiation on credible market-based numbers.
Counter the Offer
Countering with a slightly lower price can be an effective approach as it signals that the seller is willing to negotiate, but not willing to give the home away. The seller’s agent must communicate to the buyer right away that the low ball offer is not even in the realm of possibility to ensure that the buyer does not hold out false hope.
Whether you are in a buyer’s market or a seller’s market, your real estate negotiation should be based on facts and reason, not emotions and gamesmanship.