Low-ball offers are rather uncommon in a hot market like we have had in the Austin area the past few years, but they are not unheard of. So let’s take a look at how one might choose to respond in hopes of eventually getting to a price where we might make a deal.
First, it is critical to confirm that the buyer is actually qualified for more than the low offer. If the buyer is qualified for enough to make a better offer, I suggest to sellers that they consider taking an approach that is a little different. Many sellers choose to refuse to respond to low offers, and others often respond with slightly less than full price counteroffers. Neither approach is likely to move toward a contract. I suggest a third option, which is to send back a response on a form that is referred to as “Seller’s Invitation to Buyer to Submit New Offer.” I have found that this form is a more “gentle” way to refuse an offer, but possibly keep the buyer interested. The form is not a counteroffer, and clearly says so. It allows the seller to send the buyer a message that the offer has been refused, but has a space to outline what terms would be more acceptable. It still allows the seller to accept other offers. It is a refusal, but a refusal with the possibility of a dialogue.
Some personalities (and cultures) absolutely believe the first offer has to be an extremely low one. Their motto is, “Hey! Nothing ventured, nothing gained.” Sometimes it takes a seller standing firm, but without attitude . . . which I admit is difficult when it seem so personal because it is the home you have loved for years.
PLEASE READ: Texas law requires all real estate licensees provide the Information About Brokerage Services (IABS) to prospective buyers, tenants, sellers and landlords. Please see the link above.
Jeff Stewart, CCIM, SRES
Stanberry & Associates, REALTORS