Real estate agents are faced with this question many times...when a buyer makes what the seller deems as a low-ball offer. Some agents will recommend to the seller to not respond at all or respond back with the form telling buyer to "resubmit their offer". Others will recommend to counter with a high response either at original list price or near it...of course the other factors in the offer must be considered such as buyer requests for closing costs contribution, etc.
Bottom line, we Realtors need to educate our buyers and sellers to try to take emotions out of the equation...after it is just business. It's a business transaction and it could be the low ball offer by the buyer is their way of trying to ascertain what the seller's bottom line is. I believe it is always better to respond rather than no response at all.
Remember it is just a house...because a home is where the people live. So when you sell your 'house" you will be moving to your new "home". And vice versa...when you buy a "house" and you move in...it will become your "home"!!