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.
Question for the agents/experienced buyers on the board:
Would these be considered low ball offers in today's market?
Offer $280,000 for a house listed at $319,900
Offer $285,000 for a house listed at $325,000
Offer $290,000 for a house listed at $329,900
Offer $310,000 for a house listed at $350,000
Obviously every situation is unique, but generally speaking, considering today's slow market are these reasonable first offers or would these be considered low ball offers that likely wouldn't get much reaction/respect from the sellers?
Is offering 88% - 90% of asking price a common starting point for today's buyer?
You can't make such a huge general statement. Every market is different, but mostly, it depends on whether the house is priced right or not.
If the house is priced correctly, those are considerably low offers, and a seller would probably laugh at you. If you run comps and see that these are over priced, then those offers might be within reason.
You can generalize every market nor can you generalize every listing within the same market, not listings within the same market but in completely different neighborhoods.
You are really leaving out some critical information. Market value. Take two houses listed for 319,900. You look at the comps of house 1 and determine it's market value is 295,000. You look at house 2 and determine it's market value is 325,000. So making an offer of 280,000 maybe would be considered not a low ball offer on house 1, but it would be considered a low ball offer on house 2.
Thanks for the response. Let me ask you this then. Based on your experience with your buyers, what is the average percentage of list price your buyers are offering with their first offer? (average)
I had an agent at an Open House tell me that on average houses were selling at 93% of list price. I have no idea if that 93% is based on original list price or list price at time of offer.
Besides the most important question of market value the question of days on market comes up (which is also highly related to whether or not the house is priced properly). We had our house originally listed at $330K. Our first offer was $295K our agent basically told them we wouldn't even consider it. They bumped it up to $305K, we countered at $317K and they walked away. 55 days later and a price drop to $320K we got an offer for $294K we countered at $307K and they took it. The price a seller "won't even consider" when a house is first on the market, is probably the price they will "dream of getting again" once enough time has passed
Thanks for the response. Let me ask you this then. Based on your experience with your buyers, what is the average percentage of list price your buyers are offering with their first offer? (average)
I had an agent at an Open House tell me that on average houses were selling at 93% of list price. I have no idea if that 93% is based on original list price or list price at time of offer.
Again, you're generalizing. Many neighborhoods in my market are selling at 97-98% of asking price. Other neighborhoods, where the sellers are more unrealistic on their asking prices are selling at 93-95% of asking price.
If the agent told you 93%, that is for that neighborhood, not a neighborhood 5 miles down the street. If she's using that number to cover your entire market, she's an idiot who is just splirting out numbers to try to make herself look smart, but in the process is making herself look stupid.
If the sell price for an area is 93% of the last list price, then I'd bet most buyers in that market initially offer less than 93%. Negotiations bring it up or down.
Regardless, even if a home is priced fairly, if the going rate is 93%, I don't think a seller would be insulted or surprised by such an offer (if they are, their agent hasn't managed their expectations). Of course, a fairly priced house will have much more latitude on whether they accept or reject 93%. They may get bids of 105% if pricing accurately is a rarity in your neighborhood.
Currently, my area is selling at 90% of list. Many homes drop 25% or more from their original list before accepting 10% more off their final list.
The problem with all your math is that it breaks down against an "asking price". They're not advertising an "appraised value". Which BTW - would be very cool... No, your math begins with a seller's wishes in a declining market.
The RE person can only make recommendations, the seller sets the price.
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.
