There is a very significant probability that you have either gotten or will soon get a lowball offer if you are currently selling a home in Vancouver.
In this video, we’ll go through how to spot lowball offers and what to do about them.
What exactly is a lowball offer?
Vancouver real estate prices are currently declining. Buyers are concerned that they will purchase a property that will be worth less tomorrow than they paid today. Lowball offers are common because they allow buyers to get the best possible value while potentially getting ahead of anticipated price declines.
Why are lowball offers so prevalent?
We are currently in a market with very low demand as a result of government intervention in the BC and Vancouver real estate markets. On the federal level, there is the B-20 mortgage stress test, which makes getting a mortgage difficult; on the provincial level, there is British Columbia’s 20% Foreign Buyers Tax, the BC NDP’s Speculation Tax, and the City of Vancouver’s Empty Homes Tax.
These new rules and taxes have reduced demand for Vancouver real estate and shifted the market to a buyers’ market. Sellers must compete for the attention of buyers in a buyers market.
How can a seller avoid a lowball offer?
Don’t overprice your house! If you want a good offer, you must have a fair price that is based on market reality! A property that is priced according to market value has a much lower chance of being underpriced. A Seller who prices their property in line with the market (rather than 1-2 years ago!) will have more than one interested buyer and the market power to get a lowballer to come up or to wait for other interested buyers.
What should a seller do if he or she receives a lowball offer?
Don’t be angry; instead, make a good counteroffer! A Seller should always respond to a lowball offer with a counter offer. Why am I saying this? Because you, as the seller, have no way of knowing if the buyer is bluffing. If they’re bluffing, they’re not serious and will leave. If the Buyer isn’t bluffing, there’s a good chance that after some haggling, they’ll accept a price that works for the Seller.