Low-balling: What is appropriate? The guide to smart negotiations
Despite the mutual benefit, buyers’ and sellers’ motivations are somewhat at odds. The more a buyer saves, the less goes into a seller’s pocket, and vice versa. A by-product of this difference is the “low-balling.” If you’re looking to negotiate a lower price, make sure you aren’t being a low-baller.
What is low-balling?
Low-balling is the act of offering a price that is deceptively or unfairly low. Some use it as a strategy to start negotiations,expecting to be met somewhere in the middle of the asking price and the offer; some will low-ball every item that is similar to what they might want in hopes that one seller will accept; and others low-ball a wide variety of items that they resell later.
Is low-balling allowed?
At Kijiji, our position is that the market will self-regulate thanks to the freedom of users to negotiate. An item is worth whatever someone is willing to pay, but a seller can’t know that number exactly. So, sellers need to consider what they think an item is worth, as well as at what price they would be willing to part with an item. Negotiating is a way of sharing information through offers and counter-offers to find the appropriate price. Making a lower offer is a way to get a negotiation started if you think the seller overestimated the value, but sellers can be irritated or offended by extremely discounted (low-ball) offers. If your offer is too low on an item that you really want, you risk the seller becoming unwilling to negotiate further.
Is there a formula to know if an offer is low-balled?
There is no set amount to indicate what is a low-ball offer. Any offer that is substantially lower than the market value of the item could be considered one. Many sellers would consider an offer of 50% of their asking price or lower to be insulting or a waste of their time, though some would set the bar higher than that.
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Low-balling just sounds like good negotiation!
If you are going to send low offers to sellers, there are a few things you can do to minimize friction that may arise from offering them less than the asking price:
- Be respectful. If you want to make an offer below the posted price, always ask nicely. If they say they aren’t interested, or they don’t reply at all, either increase your offer significantly or let the item go. It’s not good etiquette to try and change someone’s mind who has firmly decided (and then re-affirmed) their asking price. Keep in mind that if you conduct yourself in a way that others find irritating, they may block your messages. If you act in a harassing or abusive manner, you could have your ability to reply to ads suspended.
- Don’t be a flake. If you are lucky enough to have a seller agree to a substantially lower price for you, it is good courtesy to make it easy for them with clear and fast communication to finish the deal. If you do a good job at this, they may deny higher offers that come in after your agreement. If you end up deciding you don’t want the item, let them know right away to minimize their risk of losing another opportunity to sell. You never know when they might be selling another item you want down the road.
- Don’t decrease your already-low offer. If they accepted your offer, that is not a sign to make a lower one. That will pretty much guarantee a seller feeling disrespected and could lose you the good deal you’ve already won.. The only time you should lower your original offer is when you learn something about an item that would decrease its value.
- Consider their counter-offer carefully. If they respond with a counter-offer somewhere between your price and the original price, you’ve already made great progress. First, thank them for their willingness to negotiate. Then you have a few options. If you find the price reasonable, you can agree to buy and pat yourself on the back for having saved a little extra dough. If you think it’s still a tad high, you should ask for more information about the item to confirm what you think it’s worth. With the new information you can make a new offer, pay their revised price, or let them know you can’t spend more than your original offer. If they don’t want to go any lower, you still may not have lost the item. They can always come back to you if they don’t find another buyer.
- Don’t beg. We all have our reasons for needing or wanting to save or make extra cash, and the Second-Hand Economy is already full of items priced way below what they would cost new. If you really need help due to a particular hardship, you’re better off reaching out to the community by posting an ad with your story and the kind of help you’re looking for. Kijiji is full of stories of helping hands reaching out to those who need an extra boost. You can also look for ads that state they would offer a good deal to someone who could really use the item. In that case you should feel free to share your story.
- Be reasonable. You may only be willing to spend $20, but if the item is $200 then you’d better keep looking. Don’t offer less than half of the asking price if the asking price is fair.Everyone loves a bargain, but a stranger probably isn’t going to give up the extra cash they’re looking to gain.
With most deals on Kijiji, the price paid is the original asking price. Sellers are happy just to make a few extra bucks on a used item, so they start out by offering a great deal. For some, the fun is in the negotiation. Be sure when you want to negotiate a lower price that the seller is happy to find a lower price with you if means they sell the item faster. It’s always better when everyone feels like they are winning.