Lowball Offer
Definition and meaning of Lowball Offer in real estate.
A lowball offer is a purchase proposal made to a home seller that is significantly below the property's estimated market value or asking price. Buyers use this tactic to start negotiations at a low price point or to find highly motivated sellers who need to sell quickly.
In more detail
This strategy carries risks, as it can insult sellers and lead them to reject the offer outright without making a counteroffer. It is most effective in a buyer's market where homes sit on the market for long periods, or when the property requires extensive repairs.
To increase the chances of acceptance, buyers should support their offer with recent sales data of comparable homes in the area. A clean offer with few contingencies and a quick closing timeline can also make a low offer more appealing.
Key facts
| Category | Buying & Selling |
|---|---|
| Used by | Buyers looking for a discount or dealing with motivated sellers |
| Watch out for | Alienating the seller and losing the opportunity to negotiate |
| Best timing | During a buyer's market or when a home has been on the market for a long time |
A real estate investor submits a lowball offer of twenty percent below the asking price on a home that has been vacant and listed for sale for over six months.
Frequently asked questions
Should a seller respond to a lowball offer?
Sellers should consider making a realistic counteroffer rather than rejecting the offer outright. Even a low offer indicates interest, and negotiations can sometimes lead to a mutually acceptable price.
How low is considered a lowball offer?
While there is no official percentage, an offer is typically considered a lowball if it is fifteen to twenty percent or more below the asking price or recent comparable sales.