DEFINITION of 'Low Ball'
A slang term for an offer that is significantly below the fair value of an asset or group of assets. A low-ball offer would be any offer to purchase a security that would be considered to be unfairly low, however might be a best offer in some instances, due to the securities being distressed or the seller being in a desperate position.
BREAKING DOWN 'Low Ball'
This tactic is often used when a potential seller is in desperation and may need to liquidate assets quickly. For example, if someone were to offer $2500 for an $8000 asset, this would likely be considered a low-ball offer.
Alternatively, in situations of negotiation, it is not uncommon for prospective buyers to begin the negotiations with a low ball to gauge the seller's expectations for the value of the asset. This is not uncommon in real estate negotiations.