By: Robert Urban, FSBO Veteran, CIA trained negotiator (Really), Business Consultant
Selling your home For Sale By Owner (FSBO) can bring a wide range of experiences, especially when handling lowball offers. You have done a very conservative but fair evaluation and know what the market and your house should bring. This is not some arbitrary number you picked out the air. If this is one of your first times dealing with people in real estate- spoiler alert- like in many other areas, they want to get the most and give you the least in any financial transaction. This can be incredibly insulting and infuriating, but handling it correctly can reap benefits.
I’ve spent several years negotiating and closing various business kind of deals, giving me practical insights and proven strategies for handling those “optimistically creative” offers. And rest assured, almost no one pulls their asking price out of thin air because “a million bucks sounds like a nice round number.” They set it using actual science (the home-selling kind), comps, and various other sensible factors. However vary often the buyer’s offer has no ground in anything formulaic or credible. More like- that was my birthyear, plus my lucky number, plus my last 2 from my phone number kind of logic.
Why Do People Make Lowball Offers?
Before we dive into handling these offers, let’s first understand the motivations behind them-because no, people aren’t just out to ruin your day (usually-sometimes there are people that just want to watch the world burn).
- Testing the Waters: Buyers might toss a low offer your way to test your flexibility and urgency. They’re curious if you’ll blink first.
- Perceived Value: Sometimes, buyers genuinely feel your home is overpriced based on comparisons with other properties they’ve seen.
- Financial Constraints: Tight budgets can prompt buyers to submit hopeful, “fingers-crossed” offers, hoping you’ll magically say yes.
- Investment Strategy: Seasoned investors often start low as a strategic move, assuming that sellers will compromise during negotiation.
- Why Not? (The Science of ‘Maybe They’ll Say Yes’): There’s always the simple logic of “you never know until you ask.” Occasionally, sellers are motivated by personal circumstances like divorce, death, or simply needing to move quickly. In such cases, any port in the proverbial storm might look appealing.
The Psychology Behind Lowball Offers
- Anchoring Effect: Buyers start with a low anchor price to psychologically influence final negotiations. (Here is a brilliant in -depth article about the science behind the Anchoring Effect.
- Perceived Desperation: FSBO sellers might seem inexperienced or desperate to buyers, increasing the appeal of a lowball offer.
- Power Dynamics: Making a low offer gives buyers a sense of control, setting the tone for future negotiations.
How to Respond Respectfully and Effectively
1. Stay Calm and Professional
Even if the offer makes you wonder if they accidentally missed a zero, staying professional is key.
Example Response:
“Thanks for your offer. While it’s lower than I expected, let’s see if we can find some middle ground.” (Remember your “middle ground” should be your initial asking price in most cases)
2. Educate with Facts
Clearly explain your price using comps, home improvements, or professional appraisals-not just because “it felt right.”
Example Response:
“Appreciate your interest! My asking price is backed by recent comparable sales, upgrades, and solid market research. Happy to walk you through these details.” If you feel that it is worth the effort, you can even share comps. However, very often this is not worth the extra effort- Your situation may vary.
3. Clarify Their Reasoning
Asking why they chose a specific low price can help create productive dialogue.
Example Response:
“I appreciate your offer. Could you share your perspective on how you arrived at this number? Understanding your thinking helps us both.”
4. Counter with Confidence
Propose a reasonable counteroffer, maintaining negotiation momentum without sacrificing your standards.
Example Response:
“Thanks for starting the discussion. Given market trends and the home’s unique value, would you consider [$specific amount]?”
5. Highlight Your Home’s Unique Value
Remind buyers of why your home is special (beyond the number on paper).
Example Response:
“I get that budgets matter, but this home is close to top-rated schools, has great upgrades, and—let’s face it—where else are you going to find a house that hosted an actual gopher turtle inspection event?”
Successfully handling lowball FSBO offers combines patience, data-backed reasoning, and not taking it personally. Responding respectfully and strategically can turn even the most eyebrow-raising offers potentially into a successful sale for everyone involved.
Good luck! I am rooting for you-
Robert Urban