What is a low-ball offer?

Answer 1

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.