Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
3% of asking? 5% of asking? 10%? I am confused about what is a lowball offer in this market and what is not. I am looking at a house that is 520k and my friend says I should offer $480 even though the comps do not justify $480; they would justify maybe 500 or 510k.....
3% of asking? 5% of asking? 10%? I am confused about what is a lowball offer in this market and what is not. I am looking at a house that is 520k and my friend says I should offer $480 even though the comps do not justify $480; they would justify maybe 500 or 510k.....
This is a tough question to answer because it depends alot on what part of the country you are in and even what price range you are looking at in a paticular market. It also depends on wheather you solely looking to pick up a bargain or if you are more concerned with it being the "perfect" home for you.
I think it should be obvious that if your primary concern is to find a home that matches your needs and wants. Then you should be willing to pay a little more for the place that fits.
My advice if you really want the home because it matches your list of needs and wants that you shouldn't offer less than 5% off of what the solds are over the last 90 days. This is so that you do not insult the seller and have them choose not to negotiate with you. Now if you are in one of the worst declining markets in Florida and California you can be more agressive because both the seller and the seller's agent expect you to.
Now if you are just trying to nail down a bargain then it may be best to offer even lower than what your freind suggested and move on to the next property if they are not willing to deal.
3% of asking? 5% of asking? 10%? I am confused about what is a lowball offer in this market and what is not. I am looking at a house that is 520k and my friend says I should offer $480 even though the comps do not justify $480; they would justify maybe 500 or 510k.....
I think your friend has it right. The sellers are watching the news just like you are. They are undoubtedly worried that housing prices are going to continue to plummet even if they pretend not to be. So while they may not jump on your offer, they are foolish if they find it insulting. (10 % off list is not asking for a lot IMO.) You are assuming a risk by buying in this climate. I'd say assumption of that risk justifies a lower offer than you would make in a different market environment. If the comps justify $500, definitely go lower than that. When they counter with $519k or something you can always work with them, but I wouldn't START any higher than 10 percent off list in the BEST real estate market in the nation considering where housing is right now.
Personally, I would go with the comps. Just b/c the market is bad doesn't mean that I am going to take a huge hit on my home. In my case, we did take a hit when we sold BUT there were no comps in our area b/c we were new construction...
If I were you I would probably offer $500K and go from there. My guess is you wil end on $510K, which is where you stated the comps are. SOunds like a fair deal to me.
THis is only if you LOVE the house. If you could care less if you would lose it, then by all means offer less. BUT, people tend to make offers on homes they love so if this is the case, make a good offer and it will be yours.
good luck!
Do you know how much interest they've seen in the property? How long has it been on the market? Is it getting shown regularly?
If it's not getting much interest then you can go lower. If they reject without a counter you can try a little higher, or wait a while and see if they get more desperate. We offered 83% of asking price (we thought a fair value, given the comps, was about 92%, but our agent suggested that we start with a very low offer, said that was common in that market and wouldn't be "insulting" - the house had been on the market for 9 months), they countered at 97%, we countered at 89%, and they took it. So we had overestimated the value, or underestimated the sellers' fear - either way, we would have paid more had we immediately offered what we thought the house was worth, based on comps (there weren't very many true comps, that may have been part of the problem).
I don't think you have much to lose by going low, unless others are ready to buy and you really WANT that house.
What you should offer depends on what the market is bearing and where it is trending. Some areas are continuing to decline fast, some slowly, some flat. I suggest you hire an agent you think really understands the market conditions and let them help you navigate the offer.
To me a lowball is 10% less than asking which would be $468,000.
What state? Is the house empty? Check the tax records, for previous purchase price and next door price? How desperate are they to sell? Talk to other people on the street they will give you the inside info. Why do you care if they are insulted with an offer, they asked a question you gave an answer; It's called Business. In this market 10% under first offer.
My listing was at $479,000 following a series of price reductions totaling $50,000 over a year in rapidly declining market and price range. The buyer's offer was $410,000 and my sellers were furious. I persuaded them to "stay at the table" and we responded with a "please strengthen your offer and we will be willing to talk". We sold at $475,000. The buyer's explanation,,,,"I just had to try".
OCNYISHOME offers a strategy that I have used effectively as well. As a seller, I don't want to negotiate too wide a spread. It's difficult and time-consuming and I believe that a serious buyer will make a serious offer. So I have my agent tell them we would love it if they would reconsider their offer and bid more in line with the comps if they are serious about the property. If they're bottomfishing, they walk, saving us both a lot of aggravation.
As a buyer, I bid as low as I think the seller will realistically take or the market will support. If it's an investment property, I bid what I can pencil out. I explain my reasoning and let the seller decide.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
