What % of the listing price to offer on a home??? (Minneapolis: relocation, house)

[TheLastMove]

This question was raised in the "General U.S." Forum but I thought it would be interesting to get some specific input for MN. It is really a moot point for us because we've already got a purchase agreement and I'm very satisfied with what we are paying for the house...just more curiosity. So here is the question...generally what % off of the listing price do buyer's usually offer and after all the counter offers what is the actual % off the listing price - specifically in the metro area?

[Lucas Maginot]

In my experience buy and selling homes, I have found that it has been between 1 to 3 percent. Naturally, this has been in a buyer's market.

I don't have a lot of experience; I've just studied the markets as a necessity, because I have had to buy and sell many homes due to occupational relocations every few years.

The price of the last home I purchased about a year ago settled at about 2% less than the asking price.

During the boom, I actually had to outbid other buyers for a home in California, and I paid about 3.5 % OVER asking, but then the value of the home about doubled when I sold it.

I don't know, but I've thought about the same thing, and my guess would be that in an average buyer's market, when the asking price is fair, the average percentage under asking might be about 2%, when the buyer is not trying to make any money.

[Robert P Stewart]

I'll give you my exact numbers for 2006:

We initially offered 85.7% of the list price, and my clients bought their homes for 90.7% of the list price. These are the cumulative averages. Some offers were higher or lower, some accepted bids were higher and lower.

I had one particular property where several people were interested. We wrote a full price offer and just barely got it. On the other side, I had a couple buy an $850,000 house for $650,000 (and the builder finished the basement, to boot!).

Builders like to pretend that their costs are set in stone - but they are as negotiable as any other seller out there - especially new construction. I wouldn't feel as though I had done my job if a client bought new construction at (or within 5% of) the list price. Many builders have construction loans hanging over their heads - and that puts the buyer at a distinct advantage.

Robert

[BryanF]

I had a couple buy an $850,000 house for $650,000 (and the builder finished the basement, to boot!).

uhhhhh, you're kidding right?

[MoMark]

Originally Posted by BryanF

uhhhhh, you're kidding right?

No, he's right. It's happening with new construction around the country. That was what was ticking off home sellers in Las Vegas too... The new construction of expensive homes was dropping prices in negotiation by hundreds of thousands of dollars with combined throw-ins like pools, front *and* backyard landscaping, granite countertops, etc. That depressed prices for resale homes and made a lot of resale home sellers look like this >>>> <<<<... Though... the buyers mostly looked like this >>>> <<<<

[BryanF]

Yes, I am aware of the significant incentives builders are offering to get buyers through the doors but in the example above, we're talking $.76 or so on the dollar. That's a fire sale. The Minneapolis market has not appreciated out of control like Vegas, Phoenix, SoCal, or S. Florida so I'm surprised to hear numbers like that.

Anything's possible though. Who's the builder?

[Robert P Stewart]

Out of respect for my client and the interests of the builder (who I actually like), I would prefer not to say.

And I would go one further and say that this is not indicative of the Twin Cities market - that specific transaction was an exception, not the rule (which is how I presented it).

Builders have done this to themselves. Once your speed of construction is faster than what the buying public can consume, you'll land in this situation. Several companies are now cooling their heels, and we'll see the price stabilization by 3rd qurter 2007 (my estimate).

Robert

[BryanF]

In my experience buy and selling homes, I have found that it has been between 1 to 3 percent. Naturally, this has been in a buyer's market.

As far as 1-3 percent, I agree with this comment.