A lowball offer is one that is far below a property’s actual fair market value. Lowballing a well-priced house breaks the first rule of a good offer — make a realistic offering price based upon the sale price of comparable houses.

As a seller, what conclusions can you form about the lowballing buyers? The buyers obviously haven’t done their homework regarding comparable home sales. They think that you don’t know what your house is really worth and are trying to exploit your ignorance. They are trying to steal your house based upon a mistaken impression that you’re desperate to sell. None of these conclusions is at all favorable.

As a seller, you’d probably make one of the following responses to buyers who lowballed your well-priced house: Let the buyers know that their offer is totally unacceptable by having your agent return it with a message that you are not interested in selling your house to them, or make a full-price counter offer.

Buyers who lowball a well-priced property listed by sellers who can wait for a better offer destroy any chance of developing the mutual trust and sense of fair play upon which cooperative negotiation is based.

When low offers are justified

There’s a huge difference between submitting an offer that’s at the low end of a house’s fair market value and lowballing. If your offer is based on actual sales of comparable houses, it won’t insult the seller. Such a low offer will, however, spark lively debate as both of you attempt to defend your respective prices. Coming in on the low side of a property’s fair market value is fine as long as you have plenty of time to negotiate and reason to believe that the seller is motivated.

Ironically, some sellers provoke low offers by their unwise pricing. These sellers insist on leaving room to negotiate in their price because they “know” that buyers never pay full asking price. Don’t play their silly game unless you have time to squander. Make your initial offer at the low end of the house’s fair market value and see how the sellers respond to it. If they refuse to accept the hard evidence of recent comparable home sales in the neighborhood, don’t waste valuable time trying to educate them.

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

When preparing to sell your home, the first impression is often the most important. Spend some time improving the interior and exterior appearance before placing it on the market to increase the chances of a swifter sale at a better price.