How Should You Respond to a Low Offer on Your Home?

 

A few steps you can take to negotiate a great deal with lowball offers.

If you’re planning on selling your home this spring, you need to be prepared to receive a lowball offer. Housing market activity has slowed since interest rates stagnated around 7%, but prices are still high in most markets due to low inventory. This has created a situation where a lot of homebuyers have warped expectations of what a “good” first offer on your home should look like, and you need to know how to respond. I know a low offer can be insulting, but you need to think strategically when selling your biggest asset. Today, I’ll go over how you should strategically react to a low offer to ultimately get the deal you wanted all along.

1. Check the comps one more time. Before you deal with your lowball offer, double-check that it’s actually as low as you think it is. The housing market changes at a rapid pace, so make sure your home is still worth what you thought it was. You might even be pleasantly surprised—some experts predict home prices to increase by 5% this spring. Check comparable homes in your area to see where prices are trending. Also, ask your buyer’s agent if they reached their price based on their own comps. If you can prove home prices in your area are actually higher than they thought, they might be willing to increase their offer without much negotiating. Remember, the market ultimately decides the value of your home, not your asking price. 

2. (Almost) Always counteroffer. So, you’ve checked the comps, your home is still as valuable as you thought, and your buyer isn’t moving. What now? In my opinion, it’s always worth it to counteroffer unless you suspect the buyer isn’t acting in good faith. If the buyer rejects your counteroffer immediately and insists on their lowball price, you can safely walk away knowing they were probably just fishing around for a deal from unprepared sellers. 

3. Compromise on other terms. One of the reasons why your buyer may have offered a lowball price upfront is because they don’t have enough money to offer the full asking price. While many sellers see this as a dealbreaker, I highly recommend at least hearing your buyer out. Chances are, they’ll be willing to give you great terms on other negotiating items to make up for their lower price. For example, if you need a longer close, shorter inspection period, or other contingencies waived, you might be willing to budge on price. However, if price is the main sticking point, I recommend offering something like covering the buyer’s closing costs or buying down their interest rate to free up cash.

Dealing with lowball offers isn’t fun, but it’s necessary if you want to get the best deal possible for your home. If you have any questions about our spring market, lowball offers, or something else, please call or email me. I am always willing to help!

Are Home Prices Finally Coming Down?

 

Here’s what you need to know about the future of home prices.

With the recent substantial increase in mortgage interest rates, many homeowners have been asking, “Will this finally cause home prices to drop?” The answer isn’t cut and dry. In a market where rates are predicted to rise even further this year, buyer affordability could take a serious hit. To give you a better idea of whether your home is expected to lose value in the coming months, I’m going to address four key points that explain what’s happening to buyers in the real estate market and what you can expect in the future if you’re thinking about selling:

1. More expensive mortgages. A higher interest rate means a more expensive loan payment, but the rate at which they’re rising is astounding. Rates are up 2% since the start of the year, which means the average homebuyer’s affordability has dropped by 20%. This has already priced some buyers out of the market, and if rates continue to rise as expected, it will price out even more of them. This is going to make the pool of potential buyers for your home much shallower, resulting in fewer offers.

2. Increased rental rates. One often-overlooked factor in all of this is rental rates. As homeownership becomes more expensive and more out of reach for some buyers, rental demand is only going to increase, which means that rent prices will jump up as well. 

3. Supply is still short. Although homes are more expensive, the demand for them is still high. The increased interest rates have also caused home sellers to stay in their homes longer, and our typical summer surge of inventory just isn’t happening right now. Low supply is good news for homeowners because it will keep your property values up.

4. We’re not headed for a crash. Some buyers and sellers are rushing to the market in fear of an impending crash. However, there aren’t many parallels between this market and that of 2008 when the last crash occurred. That crisis was the result of irresponsible lending practices. Since then, underwriting standards have tightened significantly. 

The current frenzied market has been brought on by basic supply and demand, and any kind of market crash is pretty unlikely. According to Brandon Haefele, CEO of Catalyst Mortgage, “I think we’re now going to start seeing individual markets potentially have some slowdown…my reasoning is we still have extremely low inventory. But it’s not going to go the other way and crash.”

Although rising rates are going to cause some buyers to leave the market entirely, all of the evidence we’ve seen on the ground points to home values continuing to appreciate as long as supply remains this low. This is good news for you if you’re thinking about selling. In the meantime, call or email for more information; we look forward to hearing from you. 

Get Your House Ready for the Market in 3 Easy Steps

 

Here’s what you need to know about preparing your home for sale.

Selling your home can be a significant undertaking, but with careful preparation, you can enhance its appeal and increase the likelihood of a successful sale. Whether you're a first-time seller or have experience in the real estate market, taking specific steps to prepare your home is crucial. Today, we'll explore three key points to help you get your home ready for the market.

1. Enhance curb appeal. When potential buyers arrive at your property, the first thing they notice is the exterior. A well-maintained and visually appealing exterior creates a positive first impression, setting the stage for a successful home tour. To enhance your home's curb appeal, invest time in landscaping to create an inviting atmosphere. Inspect your home's exterior for any needed repairs. Address issues such as peeling paint, cracked siding, or damaged roofing. Upgrade your front door and entryway to make a lasting impression. Consider a fresh coat of paint, a stylish welcome mat, and well-placed potted plants. 

"With careful preparation, you can enhance your home’s appeal and increase the likelihood of a successful sale."

2. Declutter and depersonalize. Buyers want to envision themselves living in your home, and that's easier to do when they can see the space without distraction. Start by decluttering each room. Consider renting a storage unit for excess belongings or items that may distract potential buyers. Pack away personal items such as family photos and unique decor. Depersonalizing your space allows buyers to visualize their own belongings in the home, making it easier for them to imagine living there. Give your home a thorough cleaning. Pay attention to details like dusty corners, smudged windows, and scuffed baseboards. 

 

3. Highlight key features. Consider professional staging to showcase the potential of each room. Stagers can arrange furniture and decor in a way that maximizes space and highlights key features, helping buyers see the full potential of your home. Make minor upgrades to key areas like the kitchen and bathrooms. Updated fixtures, a fresh coat of paint, or modern hardware can make a significant difference. These small investments can contribute to a higher perceived value of your home. Ensure your home is well-lit during showings. Natural light is particularly appealing, so open curtains and blinds to let it in. Consider adding ambient lighting in darker areas to create a warm and inviting atmosphere.

By taking these three key steps, you'll not only enhance your home's appeal but also increase its market value. WE ALSO HAVE A LIST OF HANDY PERSONS, CLEANERS, WINDOW REPLACEMENT COMPANIES AND LAWN SERVICES. If you need them, just give us a call. I look forward to hearing from you!