The buyer’s agent writes up an offer and sends it to the listing agent. That is how almost all deals start. The one thing many people don’t understand is that there are a hundred different parts of a contract other than the price. Everything from who will be paying for closing costs and if the sale is contingent on the buyer selling the home they are living in. The price is only one item on the offer out of many other things that make the offer weaker of stronger. It goes without saying that an offer for under asking price without a contingent sale of another property is stronger than an offer closer to asking with that contingency. Simply because there are a lot more ducks that need to be in a row for the contingent offer to close. Especially if the contingent offer isn’t under contract yet or hasn’t been through inspection objections, the point where most contracts fall apart.
There is also no true definition of a “low ball offer”.
That is a very relative term. A good rule of thumb is about 10%. The problem with that is, what if the listing is priced 5% over actual value? This happens a lot in luxury homes. Reason is that comparables are sometimes hard to find. Luxury homes are very unique and custom made. Many have great views or back up to public land and parks. So sometimes a low ball offer is not as low ball as the seller thinks.
So back to the original question, should a seller always counter a low ball offer?
The short answer to this is yes. Reason is that sellers never know what is in the buyer’s mind. You never know if they were just throwing the number out there to see if they could get it for a deal. The buyer obviously wants and like the home. Sometimes seller will say “we are way too far off on price”.
Well how does the seller know this? The seller has no idea what price the buyer is willing to go to. Again everyone likes a bargain, or at least they like to feel like they got a deal on something. It is absolutely impossible to know what a buyer is thinking. Sometimes they won’t even tell their buyer agent what their true maximum price is. Another reason to counter is that the home is actually listed too high. Did they work with a listing agent and truly look at comps or is this just the amount the seller would like to get? If so a buyer as well as a seller needs to keep in mind, it doesn’t matter what your neighbor thinks your home is worth, doesn’t matter how much you owe, it doesn’t matter what your agent thinks it is worth and it doesn’t matter how much you want to get for your home. What truly matters is what the market thinks your home is worth.
There is absolutely no reason to not respond to an offer. To just let a valid offer from an interested party is not a good idea. There is no harm to make at least one counter. Even if the offer was 9% lower than asking, make a counter coming down 2% that way the buyer will know you are willing to come down a bit but not all the way. Most first offers are not the buyers max number and until you get the communication and conversation started you will never know if you were really that far off.
So as a seller never take an offer personally. The moment a house is listed it has become a business transaction. The buyer has not had the memories and the attachment to the home that the seller does. The seller should never think the buyer is being harsh when they make a low offer. At this point it is merely a business transaction for the buyer. They have not had the opportunity to call your home their home yet.