What Is A “Low-Ball” Offer???
Lenn Harley wrote HOW MUCH WILL THE SELLER TAKE? DEPENDS.... HOW STRONG IS YOUR OFFER?, in which she points out that the true determinant of what a house will sell for is…the seller.
Several comments on that post mentioned the term “low-ball offers”…
What actually constitutes a “low ball" offer?
For sellers who are in no hurry to sell, or do not need to sell, that answer may very well be anything under list price, as I had the recent opportunity to experience firsthand. However, for motivated sellers, the answer to that question is rather ambiguous, and resides in the heads of the seller alone.
I like how Lenn referenced the days on market and other factors in one area that she serves to demonstrate the variability in what sellers will accept. Another factor to be considered is the List Price/Sales Price ratio for any given area. So if the average LP/SP ratio for an area is 93% for example, does that mean an offer at 89% is a low ball?
What factors would encourage a buyer to “low-ball” an offer?
· Condition of home
· Sale prices of comparables
· Personal budget considerations i.e. monthly PITI payment
All of these factors are in play when a buyer makes an offer, regardless of the amount…but what is considered a “low-ball” offer? Who makes that determination – the seller, the agent, or the market?