How to Handle a Lowball Offer on your Home in the Bay Area

I’ve been selling homes in Silicon Valley and the surrounding areas for years, and for a long time, lowball offers were pretty rare. In a red-hot seller’s market with low inventory and multiple offers flying around, nobody in their right mind would come in much below full asking and expect to be taken seriously.

But the market today? I’m writing this in mid-2025, and it’s not the same beast it was in 2021. Or 2019, and it’s even I think chillier than 2018. Things have certainly cooled off. In some parts of the Bay Area, I’d even say the market is downright soft—and that’s when the lowball offers start to come out of the woodwork.

So, what do you do when your REALTOR® lets you know that an offer come in, but…it’s way below asking price?

First, Understand What a “Lowball Offer” Even Is

But what exactly is a lowball offer? Is it one that is uncomfortably lower than list price? Well, what if the house is overpriced, and the “lowball offer” is actually not so far off from what might reasonably be considered fair market value? Is that a lowball offer, or is a fair offer? Hmm.

For the purposes of this article, I define a lowball offer as any purchase offer that comes in significantly below the list price. That said, it’s not just about numbers. A lowball offer often feels lowball because it lacks supporting rationale or is paired with tough terms (like a quick close or zero contingencies) that don’t begin to compensate for the low price. It’s also somewhat situational—what feels lowball in a hot market might be reasonable in a cooler one.

To me, “significantly below list price” would be anything 90% or less of the list price. For you, maybe that number is 95%. For some of you, it may be anything less than a full price offer is a lowball (especially if you feel it’s priced low to begin with). Either way, when an offer comes in and it feels like a punch to the gut, the first thing I do is take a deep breath and get to work—not to get offended, but to get curious.

Start by asking: who is this buyer? If they’re an investor, chances are they’re not emotionally attached. They want a deal, and often, they want a steal. They really don’t care anything for your home; they want a deal, they want to buy something with instant equity from the day the home closes. That means you probably won’t get them to budge much. On the other hand, if the offer is from say a family hoping to make your place their forever home, their offer might just be an opening bid. They could be nervous, unsure of what to offer given the weakness of the market, or simply stretching every dollar to try and make it work.

Look at the Market from the Buyer’s Perspective

It’s not enough to ask, “What’s my house worth?” Rather, you ought to ask, “What else can this buyer get for the same price?” I look across neighborhoods, and across cities, not just your zip code. If their, say, $1M offer gets them a better home somewhere else in your marketplace, that goes a long way to explaining why they are offering that price. They probably prefer your house – after all, they wrote an offer on it – but they have options, and you can’t blame them for seeing if you’re willing to make a deal.

But if your home stacks up well, that’s leverage. I suggest you and your REALTOR® do an honest evaluation of what else the buyer has to choose from. It could be that you got your price from looking at recent closed sales – but in a market like this, I urge sellers to forget about what closed yesterday, and look do a competition-based analysis – analyzing your home’s value by comparing it to competing, “active” listings that are at least as good as, if not, better than your home in every respect. Yes, of course, you will need to do some adjustments to come up with a reasonable fair market value for your home – but it may give you a much better perspective about the value proposition the buyer is seeing for your home given what else is out there today.

If after looking at the competition through a dispassionate, objective analysis, you may begin to get a sense of why the buyer made that offer. At this point, I ask my sellers to do a little soul-searching: what’s the minimum price you’d accept? It’s a question I never ask a seller at the outset of a listing, because my focus is always squarely on getting the absolute highest price the market will bear. It could be though that the market is telling you that the highest price out there is a lot less than you’d been anticipating. So at this point, knowing your bottom line gives us clarity. Because if your minimum is higher than the market will bear right now, it might be time to pump the brakes. But if it’s close? We lean in and negotiate like hell.

Always—Always—Make a Counter Offer

I can’t tell you how many sellers I’ve worked with who rejected a lowball offer outright, only to see the next one come in even lower weeks or months later. Time in a declining market isn’t your friend. So even if that lowball offer makes you wince, you’ve got to respond. And you don’t have to give up much. Actually, you can even go right ahead and counter back higher than your list price. Any counter offer is better than no counter offer. Of course, that’s not usually a winning formula for putting a deal together, but it’s a better formula than just clamming up and not responding to the buyer at all.

This is where your agent earns their keep. At this point, I’m not just sending emails and hoping for the best. I’m on the phone with the buyer’s agent, digging into what their client really wants. Are they worried about the payment? Maybe we offer a 2-1 buydown or help with closing costs. Are they freaked out about potential repairs? A multi-year home warranty might give them peace of mind.

Sometimes, it’s not about price. It’s about terms that make the price feel doable.

What If This Is the Best Offer You’ll Ever Get?

Let’s be honest. Nobody wants to sell low. But if you’ve pushed and negotiated and this is as far as the buyer will go—ask yourself this: What if this is the best offer I’m going to get for a long while? What if you knew, with certainty, that passing on this offer means you’d be looking at $50,000 less six months from now?

Would you take it?

That’s the kind of tough, practical thinking that helps sellers avoid regret. Holding onto your home while paying mortgage, taxes, insurance, and maintenance—hoping a better offer might come—is a risky gamble in a shifting market.

Final Thoughts

Lowball offers hurt. I get it. But this is business, and they don’t have to be deal-killers. With the right strategy, clear expectations, and smart negotiating, many of them turn into something workable—sometimes even wonderful. My job is to help you see the full picture and work every angle until you’ve got the best deal the market can deliver.