Negotiating the price of a house (real estate, for sale, work)

[PoolGoddess]

People want to sell their homes, but I am hearing that it can take a few weeks, a few months, a few years.

How much do houses really sell for? How much room is there for negotiation?

For example: If the owner is asking $500,000 for a house, would it be unreasonable to offer $400,000?

Thanks for all your assistance. In the past, everyone has given me helpful information.

PoolGoddess

[CodyW]

In this market - People might be desperate enough to take an offer like that.

Our house has been on the market for about 330 days now, and we would bend on our price. Surely, not a hundred thousand, but, then, there are people who are much more desperate than we are.

[Livewire]

Ive been seeing many homes sit indefinately because the seller wasnt willing to budge. Or maybe because the asking price just wasnt realisitc? Or both?

[AzDreamer]

A good strategy is to make low offers until someone finally accepts. How low depends on what you are comfortable paying, not what the owners think their house is worth.

[63ragtop]

It might not be unreasonable if the house has been on the market for a while and has not already had some price drops.

Since I think it might be better to go by percentages, here is an example:
I recently bought a new house. Older house, not a new build. The house had been on the market for 6 months. They had just dropped the price a week earlier. We started at 83% of their original asking price/88% of the current asking price. After going back and forth a few times, we settled on 90% of the original asking price/95% of the current asking price.

Assuming $500,000 is their original asking price, this would be you offering $415,000 and settling on $450,000. Or $440,000/$475,000 if you prefer the dropped price percentages.

While we were looking, we saw a lot of houses that were massively overpriced so if you think that applies to this house, I say go for it.

[nitram]

Low ball it. If the sellers are serious about selling they will negotiate. If they won't budge, then they are just feeling out the market and you need to move on to the next house. If a house sits on the market for more than 6 months, then it's a stale house and interest drops dramatically.

[63ragtop]

Follow-up:
When I think about some of the "overpriced" houses we were considering making offers on, we were definitely going to come in at the 80% level like you are asking about, especially the ones that had been for sale for a year or more with no price reductions.

There is a house across from me that just dropped the price by 30% according to realtor.com.

[Stumblina]

Originally Posted by PoolGoddess

For example: If the owner is asking $500,000 for a house, would it be unreasonable to offer $400,000?

PoolGoddess: If it was in Michigan, you'd probably be able to get it for $250,000. NO JOKE!

[twiggy]

The up side to all this sprawl is that you will always find another "great" house a few streets over and it will look the same! You might as well try and low ball! If they say no, just move on and try again, someone will give!

[sablebaby]

If you REALLY want the house, then don't low ball it that low. You'll never get the owner to negotiate and work with you if you insult them. Often, owners get offended by a really low balled offer. We have these discussions on the real estate forum.