In a situation like this there is no reason to over-react when you get an insulting offer. It is the time to stay calm; it is the times to respond not over-react. Emotional reaction can result in losing a buyer. Lost buyer means few more weeks of unpredictable offers, and to keep the flood of buyers to keep coming in accept a “drop in the price”. Instead of being immovable about the price seller needs to focus on their needs and priorities and let not any of the buyer slip away.
Many times the Sellers or their representing Realtors believe that an offer that is quiet lower than their expectations or the sale price is offensive and they take the offer personally. Make the best out of the situation and focus on the piece of information that the buyer has revealed you that they are interested. Buyers are not foolish to make a ridiculous offer, they could be simply testing waters … certain communities (not being biased) simply never buy anything without haggling.
Low ball offers can mean that they loved the property, but they can simply offer very little or they are testing how desperate the seller is. This happens for Probate and Short Sale properties every single day.
It is now the time for negotiator to use your best judgment and make your move accordingly. Sometimes being blunt favors the seller. Other option is to offer one with the left hand and take two back with right. By all means … as long as the communications are continuous within a reasonable time frame, something fruitful for all parties can mature.
When it comes to bargaining there is no such thing as “fair price of your home” … it is all about how much the present market can bear and the interest level of the buyers. It has certain hidden factors like their “desperation” to buy that particular property, personal reasons, schools, location, neighbor hood, market conditions, inventory and or interest rates. The term Fair value comes in to play when the lender has to approve the loan and they have to appraise the value of the house.