When an offer comes in lower than expected.
As the market finally starts to move, it brings with it one of the more frustrating and time-consuming phenomena of a breaking market: the purchaser with a low-ball offer. Like everything, though, there’s an up side as well as a down side.
First things first: what’s a low-ball offer?
A low-ball offer is real estate slang for an offer which is unreasonably low. These offers usually come in as the market moves and the potential purchaser is hoping to take advantage of a vendor who needs or wants to sell. The purchaser may have been watching the property for some time and is aware that it has been on the market for a while.
Many vendors and agents find low-ball offers annoying. We all have an idea of what our property is worth, and when someone offers us way below that it’s easy to react by dismissing the offer out of hand.
There are a few things to consider, however. It may be that the purchaser is just “trying it on” to see what they can get away with. Everybody wants to sell high and buy low—that’s just human nature. So talk with your real estate agent and check a few things:
- What is the agent’s impression of the buyer? Do they really want your property or are they just looking to buy something cheap and make a big profit as the market swings back up again?
- What’s the buyer’s budget? Can they go higher than the initial offer amount?
It may be that the low-ball is just an opening gambit and they expect you to come back with a counter offer. If this is the case, it’s time to talk strategy with your agent. Set your limits and start negotiating.
The buyer with the low-ball offer might well be wasting your time and your agent’s, but on the bright side, the low-ball offer can spur other purchasers to action. When they get wind of an offer, genuine buyers will realise they can’t afford to wait any longer and will start to get serious.
We could even be thankful to buyers with low-ball offers since they do help to get the property market moving at least.
Everything has its time and place, even low-ball offers.