As a home seller, you might receive lower sale offers than you may have expected. Here’s how to decide if the offer is a lowball offer or if you should seek out better prospects.
When you decide to sell your property, you have to be prepared to deal with interested buyers that are looking to get the best deal possible on your home. While it is up to you to decide whether you want to take the offer, it is also important to consider that there may be reasons why the offer is so low. Here are five reasons why you are getting low offers for your home.
If you are getting offers on your home, but they aren’t what you expected, you will need to be prepared with a plan of action. Most homeowners don’t want to accept the low offers that are coming in unless there is no other option. In addition, most want to hold out to see if they can get better offers.
What you decide to do really comes down to your own unique situation. What did you hope to gain from the sale of the property? Is the low offer something that you can live with? Are you taking on too much risk if you accept a low offer?
Ultimately, it’s up to you whether selling at the price of the offer makes sense. Before you decide what to do, consider these five reasons why you might be getting low ball offers on your property.
Is It Too Low?
Have you actually decided if the offer is too low given the price that you listed the property for? According to Steve McLinden of Bankrate.com, “Some agents say it's 25 percent or more below list while others have revised that to 20 percent in this current limited-inventory environment. All things being unequal, the lowball definition varies from market to market and even submarket to submarket, but certainly from price range to price range. To wit, an offer of $80,000 on a $100,000 home is more likely to be quickly dismissed than $1.6 million offer on a $2 million home.”
On the other hand, if you are trying to meet a profit goal, you may need to realize that you have to lower your expectations if the property has been on the local market for a longer period than expected. Getting help from an experienced Realtor can eliminate the problems caused by ineffective pricing strategies.
If you have opted to sell your home, there is always the risk that your home is not being advertised to the right buyers. This means that your home is attracting low offers from only a segment of the buyers that might be interested. Consider working with your real estate agent to come up with a comprehensive advertising and marketing plan for selling your home. This is the best way to avoid dealing with the issue of low offers if you are pressed for time to sell the property.
Holding on to a property that you know was well-advertised and could attract better offers if given more time gives you an opportunity to sell for maximum profits. However, you have to have positive cash flow in order to make this plan work. If you are selling because you need cash quickly, then you might run the risk of having to sell the property at a loss.
Average Sale Time
Consider the amount of time that it takes to sell homes in your area. If you are in a fast market, the time required to sell your home might be as short as 30 days. However, if you are in a slow market, then the time to sell your home can be several months. According to experts, the average time to sell a home has reached as long as ten months in some markets.
In addition, other factors such the number of buyers that are currently looking for properties in your area could also impact how much foot traffic your property receives. Seasonal factors also play a role as buyers are more likely to look at homes when the weather is good than during a period of bad weather. The number of low offers that you receive can depend on a number of factors that are not necessarily within your direct control.
Dealing with a deadline can be both a blessing and a curse when it comes to selling your home. If you must sell by a certain date to avoid foreclosure or a loss of profit on the home, then you must decide how much risk you are willing to take on before you decide to give in to an offer.
It is important to keep in mind that buyers can withdraw an offer at anytime. In fact, a withdrawal of an offer happens more often than you might think. Consider what you should do by seeking out the advice of your Realtor before you put the home on the market or before you get closer to the deadline than you would like to.
Regardless of whether you decide to sell or hold, you will be responsible for the obligations that come along with the sale. If you have outstanding debts that need to be paid, these costs will need to be factored into your strategy and may cut deeply into any profits that you were aiming to make.