Negotiations

By Larry Schottenstein on August 25, 2009

A “low ball offer” is a real estate term for an offer that is viewed as inappropriate.   Some buyers like this approach, especially in a buyers market, because they are fishing for a great deal and use this technique. They are not affraid to make many offers and don’t expect most of them to come together.     They are looking for that one opportunity. Which is why real estate agent typically don’t like them because the vast majority of the time they don’t work.

Don’t define a low ball offer by how far below the list price you are offering. Maybe the list price is not appropriate. Define a low ball offer by how far off the market value you are offering. If you are coming in way below market value then your offer may be a low ball and depending on the circumstances may not be an effective approach. The market value takes into effect the circumstances of the seller, buyer and the overall market conditions. If the seller is highly motivated this impacts the market value. I still define a low ball offer as one way below the value, even after considering the motivation of the buyer and the seller.

Some buyers will agree that the market value is a good deal but still want to make a low ball offer. I typically find this approach to also be ineffective.  Focus on the market value and the goal is to devise a strategy that will allow the buyer to get the best deal vis a vis the market value. Taking pot shots at a home is like buying lottery tickets. Be in control and focus on what matters the most.