Why Low Ball Offers Don't Work & Can Be Detrimental

When it comes to buying a home, sometimes potential buyers make lowball offers on real estate home listings in hopes of snagging a deal. However, while lowball offers may seem like a smart move, they rarely work, and can actually be detrimental to everyone involved in the real estate transaction. In this blog, we'll explore the reasons why lowball offers don't work, why they can be offensive to sellers, and why they demonstrate a lack of confidence in the real estate market.

First, let's define what a lowball offer is. A lowball offer is an offer made on a property that is significantly lower than the asking price or the market value of the property. For example, if a potential buyer offers 15% below list price or lower, that would be considered a lowball offer. For new construction homes & custom homes even an offer 5%-10% below list price is considered a low ball offer. So, why don't lowball offers work? There are several reasons for this.

First and foremost, most sellers have a good idea of the market value of their property. They have likely done their research, consulted with real estate agents, and looked at comparable properties in the area to determine a fair price. When a lowball offer comes in, it is usually far below what the seller believes the property is worth, and they are unlikely to accept it. In fact, a lowball offer can often be insulting to the seller, as it suggests that the buyer does not value the property or the effort that the seller has put into it.

Secondly, lowball offers can actually harm the buyer's chances of securing the property. When a seller receives a lowball offer, they may become defensive or even offended, which can make them less likely to negotiate with the buyer. Additionally, if there are multiple offers on the property, a lowball offer is unlikely to be taken seriously by the seller, who will likely choose a more competitive offer instead.

Thirdly, lowball offers can create a negative perception of the buyer in the real estate market.

When a buyer makes a lowball offer, it sends a message to sellers and real estate agents that they are not serious about buying a property or that they do not have confidence in the market.

This can make it more difficult for the buyer to secure properties in the future, as sellers and agents may be less likely to take their offers seriously. In addition to these practical reasons why lowball offers don't work, it's also worth considering the ethical implications of making a lowball offer.

When a seller puts their property on the market, they have a right to expect that potential buyers will make offers that are reasonable and respectful. Making a lowball offer can be seen as taking advantage of the seller's vulnerability or desperation, and can create a power imbalance in the transaction. It's important to remember that buying a home is not just a financial transaction, but also a personal and emotional one, and that treating sellers with respect and fairness is crucial.

In conclusion, while it may be tempting to make a lowball offer on a property in hopes of snagging a deal, it is rarely a successful strategy. Lowball offers can be offensive to sellers, harm the buyer's chances of securing the property, and create a negative perception of the buyer in the real estate market. Instead, it's important to do your research, consult with real estate agents, and make a fair and reasonable offer that reflects the market value of the property. By treating sellers with respect and fairness, you'll not only increase your chances of securing the property but also contribute to a healthier and more ethical real estate market.