With your home being such a major investment, you may feel the pressure to get as much money out of it as you can when it’s time to sell it for fair market value.
However, it’s value and the benefits you experience from selling a home are more complicated than the price.
In certain cases, various factors measure up differently, meaning you’ll need to consider whether a lowball offer might be your best option.
Let’s dig into understanding why lowball offers happen, when it makes sense to accept one, and why an instant cash offer might be your best option.
What are lowball offers?
Receiving a lowball offer for your house means a buyer has offered to purchase it for a price that you feel — at first — is significantly less than what you thought your home’s value was when you put it up for sale.
When should I accept a lowball offer?
We’ve outlined the potential scenarios where accepting a lowball offer actually makes good sense.
Your home has been on the market for quite some time
If you’ve been waiting for the right offer to come in but have received very few or none, you may need to lower your expectations on the price you’ll get. Maybe the market conditions are poor or your home isn’t valued as high as you wanted. In any case, if you want to sell your house in the near future, accepting a low offer might be a good option.
Your house is listed at a price that’s higher than others
In this case, your initial price might be too high for your location. Researching comparable homes that are selling nearby can show you if your ideal selling price just isn’t realistic. If your home has a higher value but won’t sell for that price in your location, you may have to compromise on price.
You purchased another home or need to move quick
There are trade-offs that make it worth taking a lower price. If you’re managing moving quickly, you have more than enough to worry about. In this case, you can compromise on price to sell your house to a buyer who can cooperate with your timeline.
You are in a ‘buyer’s’ market
If you’re in a buyer’s market, it means there are more sellers than there are buyers, giving those shopping for homes the advantage. You may have to take what you can get in terms of offers. Otherwise you risk not being able to sell your home in the current market and having to wait to see if it will shift in your favor.
Your house or property needs updating or major repairs
You may need to compromise with a buyer if you know they will have to invest more money into the home to update it or make major repairs. The alternative is to make those costly and time-consuming updates yourself. Either way it will cost you, but if you pass the repairs on to the new buyer with a lower price, you can save yourself from having to manage the updates.
Your house went pending twice, but the offer fell apart at inspection both times
If your offers are falling through at inspection, your home may not be in as good of condition as you thought initially. Again, in this case you’ll need to compromise on price to be able to make the sale. Understand that the buyer will then take on the cost of repairing whatever issues came up during inspections. If a lower price gives you the opportunity to sell the home without repairing it, it may be worth the low offer.
Selling a house for instant cash – is the price based on fair market value?
First, let’s understand what factors an instant home buyer will consider when making an offer on a house. They’ll want to understand the fair market value of your home, which helps them learn what your home is worth in the context of your local market. They’ll make their initial offer based on this information. Then they’ll schedule an inspection to understand the condition of your house and determine any repairs that are necessary. If repairs are needed and won’t be made before the sale, they’ll lower their offer before you reach a sales agreement. Their offer is a fair value for your home in as-is condition.
A lower offer usually reflects that the house needs to be brought up to date with permits, home inspections, and buyer expectations, which adds up to a lot of work and costs. An instant home buyer will invest in the house by doing this work before they resell the home, which is why their offer will be lower.
Typically, people think their home is in better condition than what it actually is. For example, if you redid your entire house, but it was 20 years ago, it may look like it’s in great shape but it’s outdated and likely needs repairs.
To get an idea of the actual worth of your house, look at the value of lower comparable homes in your area. This may reveal that what you thought was a lowball offer, isn’t actually that far off base.
An instant cash offer may be less than what you’re hoping for, but cash offers are often very quick and usually a sure thing. You’ll trade price for certainty.
Are you interested in receiving an instant cash offer?
Bolt and Beam can help you find a buyer you can trust. Provide details about your situation, and we’ll analyze your needs. From there, we’ll give you information about your home and local market, as well as our best recommendations for instant cash offers.
If you’re interested in learning more about selling your house for cash, contact us or click here to get started.