Negotiating In DFW Market (Dallas, Plano: sales, how much, houses)

[Snowyy]

What is the starting point for an offer on a house in today's market? Where do you start? Do you start with a low ball? What is considered a low ball offer here? How much is the average gap between asking price and the sold price? Do most sellers are asking a fair price or dream price?
Basically, I need to learn the negotiating etiquettes of your market before I officially start my house hunt? I know that comparables matter but just a big picture is needed. Muchas Gracias!

[BigDGeek]

Originally Posted by Snowyy

What is the starting point for an offer on a house in today's market? Where do you start? Do you start with a low ball? What is considered a low ball offer here? How much is the average gap between asking price and the sold price? Do most sellers are asking a fair price or dream price?
Basically, I need to learn the negotiating etiquettes of your market before I officially start my house hunt? I know that comparables matter but just a big picture is needed. Muchas Gracias!

Too many variables to answer your question with anything other than 'it depends'. It varies from city to city, neighborhood to neighborhood.

In my neighborhood (Heights Park in Richardson), recent sales went for at or over asking price with multiple offers. It's a seller's market for sure.

I've also attended open houses in Prestonwood (far north Dallas) and old east Dallas; this was just in the last few weeks. All of those houses are off the market now. They sold FAST. A couple weren't even that nice, but most were pristine with asking prices at about the maximum per square foot for the area.

[ChristieP]

You need a Realtor...

[Rakin]

The market is booming and it is no longer a buyers market. Many areas there is an almost a severe shortage of homes and they are going at near the list price to above list price with multiple offers.

Prices are up, inventory is low. So it depends on where you're looking and as mentioned above... You need a good Realtor who knows the market and will shoot straight with you.

You do need to be prepared to act quickly if you see a great home you love.

[Squirl]

The market is very local. In my neighborhood things are very negotiable and 3% below asking wouldn't be that unusual for an initial offer. We have homes $500K - $1.2M here and a great location but we are 20 minutes outside the city in an inferior school district and our homes are not historical/vintage, and most are not new either. So, it will depend on the neighborhood. You will only be in position to assess your strategy when you narrow down your search.

[Rakin]

Originally Posted by Squirl

The market is very local. In my neighborhood things are very negotiable and 3% below asking wouldn't be that unusual for an initial offer. We have homes $500K - $1.2M here and a great location but we are 20 minutes outside the city in an inferior school district and our homes are not historical/vintage, and most are not new either. So, it will depend on the neighborhood. You will only be in position to assess your strategy when you narrow down your search.

People talk about Location in RE but a bigger factor is school districts to the average family. Price does make a difference also. There is less demand for a $600k home than a $300k home except in areas like Southlake.

[EDS_]

Originally Posted by Snowyy

What is the starting point for an offer on a house in today's market? Where do you start? Do you start with a low ball? What is considered a low ball offer here? How much is the average gap between asking price and the sold price? Do most sellers are asking a fair price or dream price?
Basically, I need to learn the negotiating etiquettes of your market before I officially start my house hunt? I know that comparables matter but just a big picture is needed. Muchas Gracias!

All of the following assumes a nice home in a nice part of town or better.....
Lowballing is a good way to get laughed at or have your car egged. It's happened to us twice. Once years ago while on vacation an offer was conveyed to us at 25% below our asking price. My realtor was laughing and said do you want to respond with a counter - we did at 50% over the asking price. 2.5 years ago in the process of selling our home in Plano, the market was fairly soft then, we received an offer that was to the dime 21% lower than our ask. We didn't respond - the same people made an offer at 20% below ask the next week. A few days later we made a deal to sell for right at 2.5% below ask. Our house was spectacular - condition, features, 200ft. from an excellent elementary school, close to the tollway etc. In the end we sold for more than I thought we would be able too - realtors are gold around here. In that case our realtor literally paid for herself so to speak and we sold fast.

I consider any offer 10% or greater below my ask to be illegitimate. Generally, I don't pay much attention to offers 5% off my ask.


As mentioned above without narrowing it down a lot - price, generally locations etc. it's tough to help much. Also I agree with the notion that school districts are crucial. AND please note that our school districts do not follow city boundaries.


Best of luck.

[EDS_]

Originally Posted by Rakin

People talk about Location in RE but a bigger factor is school districts to the average family. Price does make a difference also. There is less demand for a $600k home than a $300k home except in areas like Southlake.

I agree with your broad point but wouldn't most people consider a home's serving school district and school track to be part of "location"?

[TurtleCreek80]

As others have said, 1) get a realtor who specializes in the part of DFW you want to live. Have them pull recent sold comps and trust that those are the market rates (ie, if $/SF is $100, you're delusional to think you're going to get a home for $60 or $80 or even $90/SF).

And 2) it really depends on the location. In much of central / east/ north Dallas (and suburbs north & northwest), the market is booming. Very low inventory on the market right now (as little as 2-3 months supply in some areas vs 6 months which is considered "healthy") and $/SF anywhere from 5-10% higher than spring 2012 prices. Of course, if you're looking somewhere rural or less desirable (ie, much of the DFW area south of I-30), you may have more negotiating room.

[BigDGeek]

Originally Posted by TurtleCreek80

As others have said, 1) get a realtor who specializes in the part of DFW you want to live. Have them pull recent sold comps and trust that those are the market rates (ie, if $/SF is $100, you're delusional to think you're going to get a home for $60 or $80 or even $90/SF).

And 2) it really depends on the location. In much of central / east/ north Dallas (and suburbs north & northwest), the market is booming. Very low inventory on the market right now (as little as 2-3 months supply in some areas vs 6 months which is considered "healthy") and $/SF anywhere from 5-10% higher than spring 2012 prices. Of course, if you're looking somewhere rural or less desirable (ie, much of the DFW area south of I-30), you may have more negotiating room.

Too true. I was thinking of selling and moving up the ladder but now I'm leaning towards not doing that since even though I'd probably get top dollar for my house as they are selling like hotcakes in my neighborhood, I'd then be over the buyer's barrel. I haven't found anything I like for a price I'd be willing to pay in the areas I've looked in. The houses at the comfortable end of my price range need work and the ones that I consider move-in ready (as in NO work necessary) are at the very top end. So I think I may just stay put and improve the property I have.

If you're a buyer in a desirable area, be prepared to suck it up and compete!