Lowball Offer Explained: What Is It and How to Navigate

Lowball offer key takeaways:

• A lowball offer is typically 10-30% below a home’s asking price and can be a smart strategy when based on market data and property condition.

• Timing and research are essential—lowball offers work best when a home is overpriced, needs repairs, or has been on the market for a while.

• Respectful negotiation matters; a well-reasoned offer and professional communication increase your chances of a positive response from the seller.

If you’ve ever tried selling a sofa on Facebook Marketplace, you’ve probably received a lowball offer; someone proposing to pay far less than your asking price. The same concept exists in real estate, except the stakes are much higher. A lowball offer in real estate occurs when a buyer suggests a purchase price that’s significantly below the seller’s asking price.

In today’s housing market, where affordability challenges many first-time homebuyers, understanding what a lowball offer means and when it’s appropriate can help you save money without offending a seller.

Buying a home, making an offer, and navigating negotiations can feel overwhelming, especially for first-time buyers. But don’t worry; we’re here to help. This Redfin guide explains what a lowball offer is, when to make one, and how to approach the process respectfully and strategically.

Table of Contents

• What is a lowball offer?
• Pros of a lowball offer
• Cons of a lowball offer
• When should you make a lowball offer
• What not to do when making a lowball offer 
• FAQs about a lowball offer

What is a lowball offer?

Lowballing refers to the practice of making an offer below the asking price in hopes of negotiating a better deal. Typically, a lowball offer ranges from 10% to 30% below the listing price; however, this can vary based on factors such as market conditions, the home’s value and condition, and how long it has been on the market. 

For example, in a seller’s market, where demand is high and inventory is limited, even a small discount might be perceived as a lowball offer. While this strategy can help buyers save money, it requires careful timing, thorough research, and a clear understanding of the seller’s situation.

Pros of a lowball offer

For buyers:
A lowball offer can help you purchase a home for less than market value, which can be a major win for your budget. If accepted, you could save thousands of dollars or free up funds for renovations and repairs. Even when a seller does not take the initial offer, a well-reasoned lowball offer can open the door to negotiation; it signals genuine interest and gives both parties a chance to find common ground.

For sellers:
While it may feel discouraging, a lowball offer can still indicate buyer interest, especially in slower markets. Sometimes, an offer below the asking price can spark competition or encourage other buyers to act quickly. For sellers eager to close, such as those relocating or managing an estate sale, a lowball offer can result in a faster sale than waiting for a higher bid that may never come.

Cons of a lowball offer

For buyers:
There are definite downsides to making a lowball offer. Submitting an extremely low offer can offend the seller or make you appear unserious, reducing your chances of negotiation. You also risk losing the home entirely if the seller rejects or ignores your offer. A low offer can sometimes result in less favorable terms, such as fewer seller concessions or less flexibility with closing dates. Additionally, if your offer is far below market value, it may damage your credibility, especially in a competitive market.

For sellers:
Receiving a lowball offer can feel personal or frustrating, particularly if there is an emotional attachment to the home. Engaging in negotiations with a buyer who starts too low can waste time or cause missed opportunities with other interested buyers. Even if the seller decides to counter, beginning from an extremely low point can prolong the negotiation process and delay the sale.

When should you make a lowball offer?

A lowball offer can be a smart move when the numbers and circumstances are on your side. While it is not always the right strategy, there are several situations where it may work to your advantage:

• The listing price is too high: You may feel the price is above market value, and sometimes you are right. Some sellers list homes higher than what local data supports, either due to emotional attachment or outdated pricing expectations. Working with a knowledgeable real estate agent can help you evaluate whether the market supports your position before submitting a lowball proposal.

• The home needs updates or repairs: If a property shows noticeable wear and tear or deferred maintenance, a lowball offer may be reasonable to offset the cost of necessary upgrades. For example, if similar homes nearby have updated kitchens or roofs and this one does not, your agent can help justify a lower offer to reflect that difference.

• The home has been sitting on the market: When a home has been listed for an extended period without offers, the seller may be more motivated and open to negotiation. If a property has been on the market for more than three months, it may indicate that the price is too high or that buyer interest has cooled.

• The property is an estate sale or foreclosure: Estate sales and foreclosures often involve sellers who need to close quickly. These motivated sellers may be more open to a lowball offer if it helps them move forward sooner. Before making an offer in these cases, conduct proper research and consult your agent to ensure you understand the process and any legal or condition-related complexities.

What not to do when making a lowball offer

If you decide to submit a lowball offer, approach it carefully and respectfully. Even if it is rejected, a thoughtful approach can leave the door open for future negotiations.

• Don’t make your offer too low: While every situation is different, offering more than 30% below the asking price is often too aggressive and may alienate the seller. An extremely low offer can offend them and prevent further discussion.

• Don’t skip your research: Before submitting any offer, review comparable sales, current market trends, and the property’s condition. A well-researched lowball offer shows that you are serious and informed; an uninformed one can harm your credibility.

• Don’t ignore the seller’s situation: Always consider the seller’s motivation. If you submit a lowball offer on a newly listed home or one with multiple offers, it is likely to backfire. Timing is key; wait until the listing has been on the market long enough to suggest flexibility.

• Don’t overload your offer with demands: If you are already offering below the asking price, avoid adding multiple repair or credit requests. Too many demands can make the deal feel one-sided and discourage the seller from engaging further.

• Don’t skip the personal touch: Including a thoughtful offer letter can make a difference when your bid is below the asking price. Explain your reasoning politely; for example, you may love the home but need to stay within budget or plan to renovate. Show the seller that your offer is genuine and respectful.

Don’t take rejection personally: If your lowball offer is rejected, remain professional and positive. Sometimes a seller may return to you later if the home does not sell quickly, so keep communication open and stay patient.

FAQs about lowball offers

How does a lowball offer get approved?

A lowball offer is approved when a seller accepts or negotiates terms closer to your proposed price. It is uncommon but possible, especially in slower markets or when the home has been listed for an extended period. Working with an experienced agent can help position your offer strategically so it is more likely to be taken seriously.

As a seller, how should I respond to a lowball offer?

Receiving a lowball offer can sting, but it is important to stay calm and professional. Evaluate whether the buyer’s reasoning has merit, and consult your agent about a possible counteroffer. Even if the offer is low, it may still lead to productive negotiations.

Should I make a lowball offer?

That depends on your goals, the property, and the market. If you have done your research, can justify your price, and are prepared to walk away, a lowball offer may be worth pursuing. Consult your real estate agent before deciding to ensure your strategy aligns with current market conditions.

Final thoughts

A lowball offer isn’t about undervaluing a home; it’s about finding balance between opportunity and respect. With research, timing, and a well-communicated approach, first-time homebuyers can use this strategy effectively in today’s market. Remember, the right offer isn’t just about price; it’s about making a deal that works for both sides.

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