Ask An Agent: How Am I Supposed To Respond To A Low-Ball Offer?
Erik Paige knows what it’s like when unexpected circumstances up-end your original plans.
For a long time, the agent at PSR brokerage was a committed academic. But, when his mother died while he was pursuing a master’s degree in environmental management at Dalhousie University, he decided to change course and become the real estate agent he’d always dreamed of becoming.
Given the challenges he’s overcome in his own life, Paige is probably one of a few agents out there who can empathize when his clients get an offer they weren’t expecting and can help them roll with it like no other.
How Am I Supposed To Respond To Low-ball Offers?
Don’t get upset or emotional about a low-ball offer because at least you have something on paper. If the other terms of the sale are okay and you don’t mind them, I would say it’s best to counter because some people just put something on paper just to see where it goes. They don’t want to overpay, so they throw it out there to see what happens.
As an agent, if my client gets a low-ball offer, the thing I would do is call every single person that set foot in that place and try to get a second offer. This way, you can get a little competition going with another person showing interest. Competition always works in favour of the seller.
As a client, I would still say don’t get emotional. Counter with something that is reasonable and in the middle and if they want to see all the research that goes into pricing strategies, I would ask the agent to send that along, just in case they try to counter your counter. You also have to be okay with the terms. If it’s a quick close where the buyer is already approved for a mortgage and it’s a pretty clean offer, tighten it up on your side and try to close the gap on the price.
Good terms to want as a seller are a quick closing date, a buyer who has been pre-approved for a mortgage, buyer visits are fine, so is a home inspection. If it’s a condo, I like to have the status certificate ready so they can review it on their own time. It just makes the whole process go quicker. If you have things that are conditional, sometimes the best offers can fall through. It’s best to have the offer and terms as clean as possible.
A low-ball offer is often a good thing because it’s a starting point for negotiation. Unless the terms that go with it are something outlandish like, “I want everything in your house.”
I always advise my buyer clients to get their initial offers on paper, even if they’re just thinking about it. When a buyer dips their toe in the water and you send back a reasonable counter, it shows that you’re willing to negotiate and the deal could work for all of you.
Don’t forget, that the buyer does want your house or they wouldn’t have put out an offer at all. Sometimes it just takes one offer for the avalanche of offers to come in because once someone puts an offer in – no matter how low — it creates a sense of urgency for anyone who wants the property and can eventually get you much closer to asking.
So, getting things on paper as fast and as cleanly as you can is really the name of the game, especially if there’s a market where all the good properties are moving really, really fast.