Sometimes sellers have an idea in their minds of what their homes are worth that’s a little inflated. As realtors, we can advise them what price we think they should list at, but at the end of the day, it’s their house and they have to make up their own minds. After all, pricing is an art, not a science, and until we’ve thrown a listing out on the market, we’re always guessing a little as to how the market will respond.
An offer is an opening bid. Most often, the buyer expects a counter-offer. As a seller, there’s no point in feeling insulted if the first offer is lower than you’d like. In the same way that the buyer doesn’t know what your bottom line is, you don’t actually know what their upper limit is either. In some cultures, the first offer is well below what the buyer expects to spend: they start off by trying to get a bargain.
There are also times when what may seem like a lowball offer actually isn’t. The market in condos in Ottawa, for example, is pretty soft right now. Prices in some buildings are down by 25% from a few years ago. I spoke with an agent last night whose client turned down an offer for $ 50K below list a month ago instead of countering back. With no other offers, they’ve dropped the price but now another unit (completely renovated) has just hit the market for around the same price. Anyone looking at both of them will choose the one with the greater value. He says in hindsight, he regrets that they didn’t counter back.
I’ve had clients who were so insulted by a lowball offer received shortly after they listed that they wanted to sign it back (counter) at their full listing price. Because they’d had lots of activity, they were convinced they’d get another offer. Guess what? They didn’t.
Weeks later, when their house hadn’t sold, they tied themselves in knots about letting that first offer go. And although we finally did sell the house for a good price eventually, they went through a lot of anxiety and stress that could have been avoided if they’d dealt with the offer they had instead of the one they hoped to get.
The important thing to remember is that any offer, even a lowball one, means there is someone interested in buying your house. Don’t let your pride get in the way of a deal. You can be offended after the negotiations are over; right now, your priority is to sell your house.