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I'm ready to make an offer on a house in Raleigh. I selected a number that I consider to be an opening bid and have been advised by my realtor that it's too low and that I risk offending the seller. Having been a seller just a few weeks back I don't understand that logic. I wasn't offended by any of the offers I received despite how low they were.
Is there some unofficial rule of real estate etiquette in North Carolina that I would be unaware of? I consider anything within 10% of list price to be a strong opening bid. I've read through all the related threads on this board and haven't found an answer.
I've been told that listed prices in the Raleigh market are typically very close to what it's expected to sell at. Why would that be truer in Raleigh than anywhere else? Doesn't the concept of pricing a house for market with room to negotiate apply everywhere?
There was a thread on home prices in the Triangle a little while ago (//www.city-data.com/forum/ralei...ighlight=98%25). Once you work through all the discussion on the (lack of) value of Zillow, you find that most homes in this area sell for around 98% of asking price - some a little more, some a little less.
I don't know - if a house is fairly priced, an opening offer of 10% less seems pretty low. I guess it also depends on how badly you want the house, and whether there is likely to be more than one bid.
When I sold my house in Virginia I chose a price that was *maybe* 2% over what I expected to get. In the end it sold for $1K *over* my list price. The first offer I got was 5% less than my listing price, and I considered it pretty ridiculous (well below market value). Their next offer was to be ~2% less, and while they were messing around I got my full price offer.
If I fairly list my current house at say $210K based on comps and upgrades, I don't expect to get an offer of $189K. That's just wasting everyone's time. Also, when I buy a new house next year I know I'm going into the highly competitive "large lot, mature trees" market. You can bet I'm going to bid very close to list price assuming the house is fairly priced. I don't want to let a few thousand dollars prevent me from getting the house of my dreams.
I'm sure the realtors will chime in but from previous post I think they have stated that houses in Raleigh typically come in at 98% of listing price. We live in a market that has considerably slowed and recieved an offer about 12% less than listing and honestly my attitude was not to even deal with that person. I wasn't offended but the gap was to wide to bridge and it took away his credibility. Again, no offense taken you never know what situation people are in but look and see if the house is fairly priced before you decide.
Is there some unofficial rule of real estate etiquette in North Carolina that I would be unaware of? I consider anything within 10% of list price to be a strong opening bid. I've read through all the related threads on this board and haven't found an answer.
NYC2RDU, I'm currently in Portland but will be moving to NC. I too am surprised about the "offended factor". It's a business transaction. BUT I will tell you that I have found MANY people on this board see it as a business transaction and would not be offened by a low offer... they would counter or such but thats part of it. The folks on this board give me hope that there are others who see it as a business transaction and not an emotional investment.
I personally think if you do not price your house at what it's actual value is then you are just opening yourself up for bargining. If you don't want to deal w/ bargining then set your price for what the house is actually worth. Here in our neighborhood RE agents STILL price homes at their worth. Not worth plus 2% like they do in in the Triangle. This artifical 2% personally ticks me off. It's factor in to make me feel good about the deal. I don't need to feel good about the deal. I need to feel good about the HOUSE.
I would say that if the house is competetively priced for the area that an artifically low offer wouldn't be appropriate, even if it is within 10% of the asking price. Doing so would be an indication that you don't have a good handle on the value of the loca market.
However, if you are making an offer that is based on recent comparable sales in the neighborhood then any offer (regardless of how far off the asking price-even if greater than 10%) is absolutely appropriate.
Sellers sometimes make good choices about pricing, other times not. It's not enough to just rely on a general statistic of most homes sell for around 98% of the asking price. Make sure you have a good sense of the market and make any offers based on that. www.wakegov.com has great property data with recent sale information which is a great resource. Your agent should also be able to provide you with comps. You need this information to make an informed offer.
NYC2RDU hope that helps. If you are familiar with comps and they seem to support your initial offer go for it.
If the market pricing shows the price to be realistic, 10% below that is indicative of an opportunist, someone who is bottom fishing, or otherwise not serious.
I don't get care about the whole insulted thing. My clients are paying me to explain that they are not "allowed" to be insulted, as it is counterproductive. Keep the emotions out of it, and keep an eye on the goal: to sell the house.
If a home is priced at $400,000 and that price is supported by comps, and an offer of $360,000 comes in, it is reasonable for the Seller to not counter. A low offer says that you really don't have a great interest.
If that $400,000 seems high, it is reasonable to ask the Listing Agent how the price was set, what comps are used, and other assumptions.
If the market pricing shows the price to be realistic, 10% below that is indicative of an opportunist, someone who is bottom fishing, or otherwise not serious.
Wonderful way to put that.
When we sold I was not personally offended by a low-bid...but I did think that the person couldn't be serious or was trying to get something for nothing and didn't even bother counter offering. (Our home was priced rate....it sold two weeks later for 99% of asking.)
My way of looking at it was that if the bidder was trying to nickle and dime THAT much right from the start, they were going to be impossible to deal with for the rest of it and I didn't need the aggravation and waste of time.
I think an offer, for the seller to take it seriously, needs to be that where the seller will not simply say "no". I had a house listed at 325k, and we got an offer of 299k. The seller's did not even entertain the offer, they just said, when they are ready to make a 'serious' offer, tell them to come back with something better.
were they insulted, no. were they willing to even begin negoiating with the offer, no.
People need to feel like a buyer is serious and not trying to "get a great deal", there are many more negotiations to come once the offer is accepted, so make the first offer one that could at least be negotiated.
My attempt to figure out the correct price is based on the average price per square foot of homes sold in the past six months in that subdivision. By using this formula I arrived at a price $15k lower than the listed price. I'm very comfortable with the adjusted price. Additionally the house has not been updated since being built nearly thirty years ago so there's nothing to drive up the price other than emotion and a fear of not getting the house. Regardless of what the seller thinkgs the house is worth the market almost never lies.
I'm just concerned that I'm being penny wise, pound foolish.
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Thanks for all the info thus far.
