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What is a low-ball offer?

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Wiki User
2007-03-29 02:45:59

In the Real Estate business, a "low-ball" offer is an offer far

below what the average price for a home should be for the area. For

example, if a $100,000 home in your area should sell for 98% of

list ($98,000), a low-ball offer would be $80,000. It is used most

commonly by investors looking to make a fast turn on a FSBO (for

sale by owner) property that has no Realtor representation. In some

cases a property is listed at an artificially high value so that

overly enchanted buyers have the opportunity to pay more than

market value, or because the seller or agent has overestimated

interest. An investor can measure the market and offer to purchase

at a much lower price, potentially saving the sellers from a

stagnant listing. A low-ball (also, lowball) offer is a

negotiating gambit that expresses interest, yet indicates

skepticism of the range set for the asking price. A low-ball can

come with other incentives: no contingencies, cash offer, quick

closing. If you can find common ground, then a deal can be put

together. If the seller still believes in the original price range,

a simple "no, thank you" will send investors elsewhere.

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