Got a Lowball Offer on Your House? Read It Before You React
The offer comes in. It's way under your list price. Your stomach drops, and about two seconds later you're mad. Who do these people think they are?
I get it. That's your home. But before you fire back or toss the thing in the trash, hear me out: a lowball offer isn't an insult. It's information. And how you read it can be the difference between a sale and a listing that sits.
Why Buyers Send a Lowball Offer
Buyers come in low for a handful of reasons, and most of them have nothing to do with disrespecting your house.
They're testing the water. Somebody told them to always start low and see what happens. Uncle Bob, a YouTube video, a coworker who bought in 2012. They're fishing.
That's really their budget. They like the house, and that number is what they can actually do. Every dollar matters to a lot of buyers, and some can't stretch no matter how much they want it.
They spotted something. Maybe the house needs work. Maybe it's been sitting. Maybe the comps they're looking at say your price is ambitious. Sometimes the low number is their way of telling you that.
They like it, just not at your price. This is the big one. They like the house, the neighborhood, the town. They're just not sold on spending what you're asking. Most sellers think their home is worth more than it is. Sometimes a buyer agrees. Sometimes they don't, and the low offer is how they tell you.
They're just throwing darts. It happens. Some buyers send out low numbers on a bunch of houses to see who bites.
For what it's worth, I try to never write that last kind for my own buyers. What I tell them is that a home is worth what you're willing to pay for it. So figure out what that number really is, and offer something you can stand behind. A ridiculous number with no reason behind it makes the buyer look bad and makes me look bad to the agent across the table. Your reputation rides along on every offer. But plenty of agents will write it, so you'll see them.
Reading Which Kind of Lowball Offer You've Got
The number is only one line on the offer. What's around it tells you who you're dealing with.
Look at the terms. Are they asking for a pile of closing costs on top of the low price? Long contingency periods? A close date that doesn't work for you? Or is it a low number with clean terms and short timelines? A low offer with strings attached is a different animal than a low offer with nothing else asked.
Look at the money. Here's a habit of mine. When an offer comes in on one of my listings, I want to know the buyer's loan has actually been run through the lender's automated underwriting system, not just a quick "you look good" over the phone. That's not a final loan approval, but it's a lot more than a pre-qual. And I usually talk to their lender. A two-minute call tells you a lot about whether this buyer can close. A buyer with solid financing and a low number is worth talking to. A buyer with shaky financing and a low number is a deal that's a lot more likely to fall apart, even if they're serious about the house.
Look at the behavior. Did their agent call to walk you through the offer? Did they send comps or a reason for the number? A buyer's agent who explains the "why" usually has a buyer who wants the house. An offer that shows up with no call, no reason, and a 24-hour deadline is usually a fishing line.
And remember, the biggest number isn't always the best deal. I went through a real three-offer weekend in what "sold over asking" really measures, where the clean offer beat the bigger one. A lower number with clean terms and strong financing can be the stronger offer.
The Counter That Keeps Them at the Table
Here's where people want a rule, and there isn't one. Not every lowball offer deserves a counter. Some do. The trick is telling which is which.
Here's how I think about it, using made-up numbers to keep it simple.
Low, but workable. Say you're listed at $500,000 and an offer comes in at $450,000. That stings. But as a salesperson, I'm assuming they're hoping to land somewhere around $475,000. If meeting in the middle works for you, and they're not also asking for closing costs or other concessions on top, that's a conversation worth having. If my sellers are good with that range, I'd respond.
Low, and loaded. Same house, listed at $500,000. This time the offer is $400,000. The middle there is $450,000, which is already a big drop. And on top of that, they want concessions and closing costs, with nothing to back up the number. No comps, no inspection concerns, no reason. As written, that's not a starting point. It's a fishing trip.
Whether it can turn into a real starting point depends on the buyer. Can they come up at all? Are they willing to? Some buyers wrote that number because it's the ceiling, and no counter is going to change that. Others are just seeing who blinks. That's what the financing check and a call with their agent are for. It shapes how I advise my sellers to respond. Every offer still gets to my sellers, and whether to respond is their call.
(Those numbers are invented to show the thinking. They aren't from a real deal, and they aren't a formula. Your house, your market, and your situation decide where the line is.)
What separates the two isn't just how low the number is. It's the whole package: how far off it is, what else they're asking for, and whether there's any reason behind it.
When an offer is in workable territory, don't reject it flat out of pride. You never know what people will do. A number that stings today can come up once the buyer sees you're willing to talk. Reject it flat and you never find out.
Countering doesn't mean you agree with their number. It means the door's still open. A few things that help:
Counter at a number you can back up. Base it on what similar homes actually sold for, not on what you need or what you hope. If you can tell them why, even better.
Price isn't the only lever. Sometimes you hold firm on price and give on something else, like timing. Sometimes the buyer bends on price if you bend somewhere they care about. Talk through what actually matters to you with your agent before you counter.
Know who's holding the ball. On a regular counter, the buyer is usually the one who can lock it in. (Multiple counters to several buyers work differently.) That cuts both ways, and it's worth understanding who's holding the live counter before you send one.
Keep it business. The buyer isn't insulting your house. They're negotiating. The seller who takes it personally usually ends up negotiating against their own emotions.
When a Lowball Offer Means Your Price Is Off
One lowball offer is one buyer's opinion. Several buyers landing in the same low range is the market talking.
If the only offers coming in are low, especially after a few quiet weeks, that's a signal worth listening to. It ties right back to what your showings are telling you: few showings plus low offers usually points at price, not at bad luck or cheap buyers.
Sometimes the list price got set off a headline, like the neighbor who "sold over asking," instead of what similar homes actually sold for. If that's the case, an offer well under your list price might be closer to reality than the sign in your yard. That's why there's no set percentage that makes an offer a "lowball." It depends on whether the list price was right to begin with. The fix starts with how a real pricing number gets built, not with getting mad at the people telling you the truth.
Your Own Situation Is Half the Equation
Here's the part no calculator can do for you. The same offer can be a yes for one seller and a no for another.
Ask yourself:
Are you in a hurry? A job move, a deadline, a house you're trying to get into.
Do you have to sell? Or are you testing the market to see what happens?
Are you moving up? Then the net from this sale has to make the next purchase work.
Did you inherit it? Maybe you don't want the house, the upkeep, or the payments that come with it.
Are you carrying two payments? Every month it sits costs you real money.
If you haven't asked yourself whether you actually have to sell, start there. Your answer changes what a low number means.
But here's the honest flip side. What you owe and what you need don't set the price. The condition of the house and the market do.
Here's a spot I've seen sellers get stuck in. The home needs work. The seller needs a certain number because they're still making the payment on it. And they're stubborn about it. They won't lower the price, and they've said they'd rather let the house go back to the bank than take less.
So I leave it on the market. That's their call, not mine. The low offers come in, because buyers see the repairs and price them in. And the seller keeps making that payment, month after month.
At some point, we have the conversation. I tell them my honest opinion of what they're doing and why I think they're doing it. And I tell them this: they still have real equity in that house, even at the prices buyers are offering. Taking less than they wanted beats risking that equity by handing the house back to the bank. The repairs aren't going to fix themselves, and every month it sits, they're paying to carry it.
(If you're anywhere near that spot, talk to your lender and a tax professional or attorney too. Letting a home go back to the bank comes with its own consequences, and they're worth understanding before you decide.)
That's a hard conversation. It's also the one a good agent owes you.
And here's the more common version of the same thing. The seller who's trying to buy something else, and has to sell for a certain number to make the new home work. I get it. But that number means nothing to a buyer. To them, it's just numbers on paper for something you want to do. They're paying for the house in front of them, not for your next one.
So don't ask, "Is this a good offer?" Ask, "What does this deal need?" Every deal is its own animal. The low number that's an insult on one house can be the right deal on the next one. Reading that, deal by deal, is the part that takes experience, not a script.
If you're already listed, take this to your agent and talk it through. That's what they're there for.
I'm not perfect, and nobody reads every buyer right. But the seller who stays calm, reads
the whole offer, and counters with a reason is in a much better spot to make a good decision than the one who's still mad about the first number.
Brian Watters, Realtor | ByOurRep.com | DRE 01748905 | Realty Executives Platinum
(661) 400-3990 | Brian@ByOurRep.com.
This post is general education based on my own experience. It's not a pricing opinion on your home or advice on a specific offer. The dollar examples are made up to show the thinking. Offers and counter offers are contracts, and what they mean depends on the exact terms and timelines in yours. If you're already working with an agent, talk it through with them. For legal questions about a specific offer or contract, talk with a California real estate attorney.
