DEAR DAVID: We’ve been on the market for 3 months and have dropped our asking price a couple of times. We just got a really low offer and don’t want to sign it back. What do you think? – DISHEARTENED
DEAR DISHEARTENED: The year 2022 will undoubtedly go down in real estate history as a time of remarkable extremes. Early on, we had record low inventory and record low interest rates, and buyers were whipped into a frenzy. I’d never heard the term “FMO” (Fear of Missing Out) applied to real estate purchases until a year ago, but in the first few months of 2022, it definitely applied. The rush to buy local real estate was enough to drive prices up about 25 percent in six months.
In the months that followed, pandemic restrictions were falling by the wayside and it looked like home values would continue to rise. Then came a market triple whammy: turmoil in Ukraine, record high gas prices, and inflation levels that haven’t been seen in a quarter century. We swung from an unprecedented sellers’ market to an unprecedented buyer’s market in the span of three or four months. It happened so fast that we could track the shift on a daily basis. The public perception was that everything changed overnight.
As a home seller, I’m sure you know this all too well. You’ve had to drop your asking price multiple times, which tells me you got caught in the downturn, as many people did. Rapidly changing conditions have left you “chasing the market” down. You missed the peak for whatever reason (perhaps you weren’t committed to moving yet or your house wasn’t ready to list) and now you’re looking in the rear-view mirror at what you could have had. When you’re hoping to hit a home run with your sale, a lousy offer adds insult to injury.
At this point, you need to figure out what your home is worth today. That value may have been higher than expected when the market was on fire, but now that things have calmed, you need to prepare yourself for an answer you might not want to hear.
When feelings are raw, it’s not uncommon for a disappointed seller to be unwilling to sign back a lowball offer. Selling a home is a business transaction in theory, but it’s also highly personal. I often warn buyers that submitting a lowball offer can trigger an emotional backlash in the seller that could ultimately hurt their chances of buying the home. When the seller’s feelings are hurt, they may overreact (or refuse to react at all) and choose not to respond with a signback.
PRO TIP: I work extensively with buyers and sellers, so I see the situation from both sides. Buyers are often afraid of overpaying and unsure of what prices should be, while sellers are lamenting what they could have had a few months ago. Experience is the key to navigating these volatile waters. A buyer’s agent needs to guide their client to the right price, so they’re not overpaying or offending the seller. A seller’s agent needs to keep emotions in check. I’ve negotiated hundreds of lowball offers into good ones, and any of these might have gone astray if emotions were allowed to rule. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.