Amount to offer when buying (Austin, Howe: days on market, real estate, foreclosure)

[hc123]

Do houses in Austin (different areas) usually sell at or below asking price? I just want to get an idea of how low your offer can be.

[Raskolnikov]

At, above, or slightly below. Not far below.

[readymade]

Well, wouldn't it depend on how long it had been on the market? I imagine that one could offer significantly lower on a house that has been vacant and on the market for 6 months.

[achtungpv]

Depends on the neighborhood and the seller's situation. If the house has been on the market more than 4 months, they are in preforeclosure and asking $200K on a note they owe $100K on, ain't no way I'm offering $200K regardless of what market value is.

A good realtor will research this for you.

[McDavis]

You really need to get your realtor to run the comps and see the actual sold price for similar houses in the area. Not every seller is in preforeclosure. And every financial situation is different.

[three_fish]

I agree that each situation (and location) is unique. However, I've had several realtors tell me that you can probably offer 90% of asking w/out risking insulting the seller. Not that you'll be able to buy it at 90% of asking, but that it is a valid starting point. Again, depending on how long it's been on the market and how "desperate" the seller is to get out, I don't think it's out of the question that you could even get a 90% of asking offer accepted. Once you start dipping below 90% you risk "insulting the seller" and not even getting a response (again subject to that particular set of circumstances).

Personally, we're trying to sell our place right now (on east coast) and I'd even welcome some "insulting" offers right now.

[gigi927]

A lot depends on the location in Austin. In high demand areas, a 10% under list offer might be considered lowball but in low demand areas a seller might be highly grateful for that type of offer!

My husband (a realtor) has been in several multiple offer situations recently and the properties have gone for above the asking price - so there are a lot of factors to consider.

[Derek ATX]

As stated above, it really does depend on the sellers situation and the location and the comps. In most areas of Austin proper we are in a "balanced market" It is neither a sellers market nor a buyers market which is typically about 6 months of inventory. In many areas we are still in a sellers market (sww) and in some areas we are in a buyers market (11). In a balanced market you're not going to see offers accepted at 10% below very often, but each home is different. I've had clients come here from depressed real estate markets and expect to offer 60% to 70% on a home. I explain to them that we are not seeing the downturn that is happening in other parts of the country, but I still have a duty to present their offer. It ususally takes a couple of rounds of this and them losing the home they really wanted to a full price offer before the realization sets in. Have your realtor show you the comps for the area, the market trends for that area, the days on market, the average selling price percentage versus asking and then formulate a strategy that you will be comfortable with and that he/she thinks will be succesful in making the best negotiable offer on that home.

Derek

[AustinGuy]

I would say it really depends on what the asking price is. I've noticed that there are a lot of sellers who have set their prices ridiculously high (especially in central austin), and their house just sits on the market for months on end even though the market in central austin is strong.

You really need to do your research prior to placing an offer and figure out what a fair price is based on comps your realtor pulls. If a fair price for a house is 20% below what they are asking, than offer that. If a fair price is 2% below asking, offer that.

[McDavis]

My suburban house happens to be on the market now. I have gotten 2 offers that were 10% below asking, and quite frankly, I was insulted with the main reason being that (by looking at comps) I know that I have my home priced right. The buyers would have known as well had the taken a moment to review the comps. Also, I'm one of those people that don't have to sell right now. We'd simply like to move to a larger house in a nicer neighorhood. No firesale here. It wouldn't kill us to stay. So like I said before, every seller is different, and it's probably not the best idea to make assumptions.