Definition of Lowballing...

[mooseburger]

I thought this might be handy, for some of us that don't understand what the term means..


Definition
Lowballing the price of a car means offering to sell it at an unrealistically low price. For example, a car dealer might offer you a vehicle for $27,000 even though it normally sells for a minimum of $30,000. Unfortunately, the dealer has no intention of actually selling the car at that price. It's an underhanded tactic to get you through the door.

Purpose
There are two purposes for giving you a lowball offer. If you are shopping around, Roosevelt Gist of Auto Network says a salesperson will give a lowball price to ensure that you will come back. He knows that no other dealer will be able to meet the offer, so he wants to guarantee your return. He won't give you anything in writing, and when you return he won't honor the price. You'll get an excuse like "you misunderstood" or "the sales manager wouldn't approve it" or "the car has been sold." Instead, you'll find yourself back in negotiations. The second purpose is to get you into the dealership if you have not been there yet. If you are shopping via email or over the phone, the dealer may call you with a price that sounds too good to be true. When you arrive, he won't honor the price.

[catnthehat]

Conversely, a lowball price on an offer to buy something usually results in the seller getting pizzed and ignoring the offer completely.

Cat

[CaberTosser]

I would tend to disagree with your definition: that's called a bait & switch. I'l agree with Cats definition, and add another. A lowball offer is one intended to prey on a potentially desperate seller, or where a business/person is is bidding against others for a clients contract; the can offer a lowball contract to get their foot in the door and then start ramping up their prices on 'extras' or the clients future untendered work. Some might also call that tactic a 'loss-leader'.


I call it someone who starts their offers at 60% or less of your O.B.O price on an item priced at market value.

[Clgy_Dave2.0]

Originally Posted by CaberTosser

I would tend to disagree with your definition: that's called a bait & switch. I'l agree with Cats definition, and add another. A lowball offer is one intended to prey on a potentially desperate seller, or where a business/person is is bidding against others for a clients contract; the can offer a lowball contract to get their foot in the door and then start ramping up their prices on 'extras' or the clients future untendered work. Some might also call that tactic a 'loss-leader'.


I call it someone who starts their offers at 60% or less of your O.B.O price on an item priced at market value.

I was thinking the very same thing. I've never run into the OP's scenario before. Never had a salesman give me a number over the phone. They say "come on in and we'll discuss it". And whenever I walk out the door with a "verbal" price...I assume all bets are off once I leave. Talks to resume all over again if I come back.

But the OP appears to have gotten his info from "ehow.com". I don't really put much into ehow's information.

http://www.ehow.com/about_5369452_lo...uying-car.html

Definition

Lowballing the price of a car means offering to sell it at an unrealistically low price. For example, a car dealer might offer you a vehicle for $27,000 even though it normally sells for a minimum of $30,000. Unfortunately, the dealer has no intention of actually selling the car at that price. It's an underhanded tactic to get you through the door.

Purpose

There are two purposes for giving you a lowball offer. If you are shopping around, Roosevelt Gist of Auto Network says a salesperson will give a lowball price to ensure that you will come back. He knows that no other dealer will be able to meet the offer, so he wants to guarantee your return. He won't give you anything in writing, and when you return he won't honor the price. You'll get an excuse like "you misunderstood" or "the sales manager wouldn't approve it" or "the car has been sold." Instead, you'll find yourself back in negotiations. The second purpose is to get you into the dealership if you have not been there yet. If you are shopping via email or over the phone, the dealer may call you with a price that sounds too good to be true. When you arrive, he won't honor the price.


Read more: What Is Low Balling the Price When Buying Car? | eHow.com http://www.ehow.com/about_5369452_lo...#ixzz2AhDJ9AKL

[AbAngler]

I am in email "negotiations" right now on a $43k (MSRP) car. My last and final offer was $30k tax in. Now that's a low ball! It worked on my last truck where I offered $13k under MSRP, after a couple weeks, they called me and I sealed the deal that day.

I have a feeling it won't work this time, but it never hurts to try!

[TrollGRG]

Originally Posted by CaberTosser

I call it someone who starts their offers at 60% or less of your O.B.O price on an item priced at market value.

I disagree. OBO means "Or Best Offer". It can be 60% or 2% of the asking price. Lowballing is when you offer 60% of the asking price when no OBO is involved.

[CaberTosser]

Originally Posted by TrollGRG

I disagree. OBO means "Or Best Offer". It can be 60% or 2% of the asking price. Lowballing is when you offer 60% of the asking price when no OBO is involved.

I'm fully aware of what OBO means; I suppose it's rather idealistic of me to equate it with "reasonable offer". Some people figure the use of 'OBO' gives them free reign to make absurd proposals involving the financial sodomization of the seller. I guess it came into vogue when a person had to keep their newspaper/bargain finder ad within a certain number of characters to keep their advertising costs low; now with abundant free internet classifieds where size of content is less of an issue it's still used probably just out of habit.


I recall at one of my gun show tables a middle eastern fellow kept returning to agressively offer me less than half of what I was asking (already 80% of retail) for some Federal Premium MRX ammunition that I was selling. It got to the point where I told him to beat it & stop wasting my time as I had actual customers to deal with, and that I'd have to charge him more than I was asking because if the time of mine he was wasting (this might have been return visit 5 or 6). The look in his buddies eyes was agreeing with me

Perhaps it's a handicap of mine, or some chronic Canadian politeness, but I won't make an offer I don't think is reasonable. Many people's bargain hunting/bartering instincts are a more powerful motivation than their humility.

[Zip]

Originally Posted by TrollGRG

I disagree. OBO means "Or Best Offer". It can be 60% or 2% of the asking price. Lowballing is when you offer 60% of the asking price when no OBO is involved.

You are correct TrollGRG...

[Dacotensis]

Originally Posted by CaberTosser

I'm fully aware of what OBO means; I suppose it's rather idealistic of me to equate it with "reasonable offer". Some people figure the use of 'OBO' gives them free reign to make absurd proposals involving the financial sodomization of the seller. I guess it came into vogue when a person had to keep their newspaper/bargain finder ad within a certain number of characters to keep their advertising costs low; now with abundant free internet classifieds where size of content is less of an issue it's still used probably just out of habit.


I recall at one of my gun show tables a middle eastern fellow kept returning to agressively offer me less than half of what I was asking (already 80% of retail) for some Federal Premium MRX ammunition that I was selling. It got to the point where I told him to beat it & stop wasting my time as I had actual customers to deal with, and that I'd have to charge him more than I was asking because if the time of mine he was wasting (this might have been return visit 5 or 6). The look in his buddies eyes was agreeing with me

Perhaps it's a handicap of mine, or some chronic Canadian politeness, but I won't make an offer I don't think is reasonable. Many people's bargain hunting/bartering instincts are a more powerful motivation than their humility.

So many good quotes in here^.

I think by now, it's no secret that I sell stuff, both here and mainstream buy and sell sites.
I do get alot of tire kickers and ppl wasteing time. I have told them I'm going to have to charge them more just for taking up my valuable time. It's usually about this moment where they get the drift they are pizzing me off and I won't budge any further.

I like it when ppl are up front with their position.
I had a guy make me an offer on my track hoe. It was way low. a "low ball" if there ever was one.
He knew what I had paid? should have tipped me off. Told me what my profit margin should be? How could this be I thought?
Turns out he was the bf of my black sheep of the family Auntie.
Had he phoned me, introduced himself as who he was, his understanding of my purchase terms,and my selling terms and made an honest, decent offer then I might have been more inclined to move on my price a little more than I already was.
Instead the guy tried to bamboozle me.
In the end, I'm glad I told the guy to pound sand (prior to knowing who he was).
It turned out better for me 2 weeks ago when I sold it for $500 more than what I would have sold it for to this guy.

Often I will put in my ads "or reasonable and fair or equitable trade".
I avoid putting obo.
I had one guy show up for tires. He left empty handed because I didn't like his offer.
He told me he was going to Arizona for the winter and needed tires. I knew I had him the 2nd time he showed up. I still didn't like his offer-still his original offer.
The third time he just showed up w/o calling. We came to an agreement.

I have had guys make an offer based on their perception that since my ad has been on for 8 months that it's time for me to sell.
I tell them their perception is bs and has no beairing on the price.
I don't like this mindset. Ya it doesn't hurt to try the offer, but please don't tell me your reasoning on why I should sell it for less.

In case you might not be aware.
I have a truck for sale!
See below

[Ken07AOVette]

Funny, everytime someone mentions lowballing, I think immediately of Dacotensis!

[Tundra Monkey]

Originally Posted by Ken07AOVette

Funny, everytime someone mentions lowballing, I think immediately of Dacotensis!

I was afraid that someone found a nude pic of Redfrog....kind of a time/gravity relationship

[CaberTosser]

Originally Posted by Tundra Monkey

I was afraid that someone found a nude pic of Redfrog....kind of a time/gravity relationship

When its really cold out, they elevate to just below his knee.

[Redfrog]

Originally Posted by Tundra Monkey

I was afraid that someone found a nude pic of Redfrog....kind of a time/gravity relationship

It wasn't always like that you know.


Do you think this would help?

[Tundra Monkey]

Originally Posted by Redfrog

It wasn't always like that you know.


Do you think this would help?

Priceless Red.....and quick too!!!!!!!!!!!!!

[winged1]

'lowballing' as I traditionally called it, was a technique to unsettle the prospect, to shake them from a firm position. It can work but must be used tactfully, as it can also end negotiations. It's a big difference from being cheap, misunderstanding the value, or disrespecting the prospect. 'That's my final offer', and 'I wouldn't pay 2 bucks for that', are close relatives.

[Okotokian]

Originally Posted by CaberTosser

I would tend to disagree with your definition: that's called a bait & switch. .

Agreed. A lowball offer is an offer to buy that is substantially below what the market might suggest. Usually designed to take advantage of seller's desperation, with a small percieved chance of success.

[Okotokian]

nevermind

[cranky]

I suppose there are many definitions of what lowballing might mean in different situations.
However at a car dealership the OP is correct. Some salesman "lowball" which is to say or imply a lower price than what they can sell for, or take trade in for,if the customer is going price shopping. They are attempting to get the customer to come back after shopping around. That is the term used by all car sales guys when they do that. Its not used as much anymore,but the old timers still do it depending on the customer.
It works on some folks and not on others. The salesmen have many other tactics they use as you all know. They loose with some and gain with some. Either way they sell cars. The main goal of course for them is to have you think you won. If each sales person sells 15 a month which is quite normal,and we buy once every 3 years who is going to win? Particularly when they have the entire industry behind them.

[Dacotensis]

Originally Posted by Ken07AOVette

Funny, everytime someone mentions lowballing, I think immediately of Dacotensis!

That's golden!

Spend enough time lowballing and sooner or later a "calous" nature will emerge!

[double gun]

Originally Posted by CaberTosser

I would tend to disagree with your definition: that's called a bait & switch. I'l agree with Cats definition, and add another. A lowball offer is one intended to prey on a potentially desperate seller, or where a business/person is is bidding against others for a clients contract; the can offer a lowball contract to get their foot in the door and then start ramping up their prices on 'extras' or the clients future untendered work. Some might also call that tactic a 'loss-leader'.


I call it someone who starts their offers at 60% or less of your O.B.O price on an item priced at market value.

X2 agreed

[Rob S]

@daco The truck sounds intriguing...Would ya take $1500 for it?

[Dacotensis]

Originally Posted by Rob S

@daco The truck sounds intriguing...Would ya take $1500 for it?

Take a flying ***k fella .
I'll sell you the wheels for that!

See how negotiations go?

Back at ya Rob S.

[pike_king780]

Originally Posted by winged1

'lowballing' as I traditionally called it, was a technique to unsettle the prospect, to shake them from a firm position. It can work but must be used tactfully, as it can also end negotiations. It's a big difference from being cheap, misunderstanding the value, or disrespecting the prospect. 'That's my final offer', and 'I wouldn't pay 2 bucks for that', are close relatives.

X2 I agree with this

[Okotokian]

It's an Eric Burden and War song, isn't it? "All... my... friends... know the low-baller..."

[The Elkster]

On the flip side there are people who consider $500 below asking a low ball offer. Whats the cutoff? We do live in a capitalist world don't we or is that just when it suits us? Its funny how emotional some get when it comes to selling "their" stuff and the value of "their" stuff. Yet if its a business going under they have no problem swooping in for a killer deal at a bankruptcy sale. Hey thats just business eh.

Its all in the perspective. I don't buy much of anything so could care less either way but if someone puts OBO in the ad then they are simply asking for a lowball offer. In some cases the only way to find out the current market value is to go way below what some feel a price should be. How hard is it to say "no f'n deal" and hit the ignore button? Reeeeally!

What is worth 100k today isn't necessarily worth bubkus tomorrow. The upcoming housing correction is going to provide a classic example. Some overleveraged people are going to be forced to sell for a fraction of todays value because of poor planning and not leaving any financial wiggle room. Is it up to you and me to ensure we pay full price so the seller isn't losing money or is getting their percieved market value? I don't think so. They will heee and haw but at the end of the day something is only worth what someone is willing to pay within the sellers sales window. If one's sales window is small and they have to take a loss due to poor planning then who's fault is that? I'm shocked this discussion is happening on a predominately conservative pro-capitalist message board... The same message board that supports big businesses that regularly skewer the aforementioned poor planners without a care in the world.

Peace out

[DiabeticKripple]

I personally think low balls are anything under 90% of the asking price, no matter what.

[Rob S]

Touché

[thumper]

Sometimes I realize that the item being sold is worth far more than I'm offering. I was prepared to purchase something older/more mileage/poorer condition, but if the seller is motivated, they might take far less than they were asking. IMO, if they say OBO, then I can offer whatever I want.

So not to offend the seller, I'll say "I realize that it's worth what you're asking, but I don't have that much to spend on it. I can only offer you $X, cash. If you don't get a better price from someone else and can part with it for that price, give me a call. Offer's open for one week from today."