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.
I guess it depends on what the asking price is. One house we looked at and put a lowball offer on was listed for the same price the owners paid in 2008. Other than finishing the basement, they had done nothing of value to the home and in fact the home showed a lot of wear and tear.
We offered ~20% less (which is the approximate home decline from 2008 to 2012 in our area, they said no, we walked away.
There are a lot of low ball offers. It's a game these days.
Just remember many short sales and foreclosures that have sold even for big discount need at least 20-40K of work. Short sales especially in Florida these days are often in much worst condition than foreclosures. Homeowners just sit tight...do no maintance on the property for 3 plus years.
If prices have decreased by 20% from 2008-2012, than the real asking price should be within 10% of the listing price. A finished basement usually costs anywhere between 10-40K depending on the kind of work done.
And who knows...some people don't have to sell. There are many people testing the market these days.
You might get lucky with someone who wants/needs to sell a home.
But realize you may end up with competing with multiple offers.
My neighbor just listed her home in Florida. Beautiful home, so many upgrades. They brought at end of 2007. Prices are probably down 30% from 2007. They listed it at 10% of their 2007 price. But they also put in 75K of home renovation, new kitchen, hardwood floors, planation shutters etc.
If you are not an educated buyer, you may try to low ball them 20% off list price. But they got 3 offers all at asking price of $600K in Florida. They brought the home for $660K in 2007.
They are really taking close to a $180K lost when counting realtor commision and closing cost.
There are a lot of low ball offers. It's a game these days.
Just remember many short sales and foreclosures that have sold even for big discount need at least 20-40K of work. Short sales especially in Florida these days are often in much worst condition than foreclosures. Homeowners just sit tight...do no maintance on the property for 3 plus years.
If prices have decreased by 20% from 2008-2012, than the real asking price should be within 10% of the listing price. A finished basement usually costs anywhere between 10-40K depending on the kind of work done.
And who knows...some people don't have to sell. There are many people testing the market these days.
You might get lucky with someone who wants/needs to sell a home.
But realize you may end up with competing with multiple offers.
My neighbor just listed her home in Florida. Beautiful home, so many upgrades. They brought at end of 2007. Prices are probably down 30% from 2007. They listed it at 10% of their 2007 price. But they also put in 75K of home renovation, new kitchen, hardwood floors, planation shutters etc.
If you are not an educated buyer, you may try to low ball them 20% off list price. But they got 3 offers all at asking price of $600K in Florida. They brought the home for $660K in 2007.
They are really taking close to a $180K lost when counting realtor commision and closing cost.
I understand. After the fact, my realtor told me that they didn't need to sell and were just testing the market (unfortunately, using the term "motivated seller" was misleading to us). It didn't matter to me, because when I figured in the upgrades that I need & want to make, it would have cost less to build a new house, which is likely what I'm doing.
That house is still on the market btw, and my realtor mentioned that the offers she knows about were all about 15% below asking price.
After the fact, my realtor told me that they didn't need to sell and were just testing the market
(unfortunately, using the term "motivated seller" was misleading to us).
This act of misrepresentation is far more than "misleading" and may have crossed the line into fraud.
Your agent is not helping you one bit. Find another one.
So things have changed since I last sold a house and bought this one, I guess (2003). I did do the figuring as MrRational suggested, it ended up being a 10% less offer. Since I am not in a pinch, and I am old school and not going to play percentage games, but will entertain serious offers, and negotiate in good faith, I may be staying longer than I expect to. I am not going to give my house away, and trust me, emotional attachment is NOT involved here.
So things have changed since I last sold a house and bought this one, I guess (2003). I did do the figuring as MrRational suggested, it ended up being a 10% less offer. Since I am not in a pinch, and I am old school and not going to play percentage games, but will entertain serious offers, and negotiate in good faith, I may be staying longer than I expect to. I am not going to give my house away, and trust me, emotional attachment is NOT involved here.
I think it is pretty clear you are letting your emotions get in the way. Otherwise you would entertain all offers and treat them as the starting point in a negotiation that may or not may end up resulting in the sale of your house. Which one would assume is your goal.
I think it is pretty clear you are letting your emotions get in the way. Otherwise you would entertain all offers and treat them as the starting point in a negotiation that may or not may end up resulting in the sale of your house. Which one would assume is your goal.
^^This.
An actual (signed contract with deposit) offer has to be considered seriously.
Such an actual offer at 10% below asking is serious, is quite a reasonable starting point and in most/many markets will be closer to the final accepted number than any other.
I've heard of some people offering at or below tax assessment. I have heard of giving any bid and seeing what happens.
Without alienating myself from the seller or listing agent, what is a good starting bid for a house, these days? What is considered a "lowball offer"? 50% of asking? 40%? 30%?
I realize that this question is dependent upon the market, but what is a reasonable price to pay per square foot, these days in a market (outside of the major hotspots like NYC, DC, LA, etc)?
Some houses are priced far too high to begin with and may sell for only 60% or 70% of original asking price. Other houses are priced reasonably and might sell for 95%. A few are priced so competitively that they sell for over 100%. In some areas it's hard to price houses. We listed our house for way below what our agent recommended, and we will lower it for the second time next week. So if we had gone with our agent's suggestion, 80% would have been a decent offer. But we listed low, and 80% of our asking price now would be too low.
I've been watching one particular area in NW WA for about a year, ($200K-$500K, 3+ br, SFH, 1800-4000 sq ft, lots mostly .5 to 5 acres), and the median has been just under 90%. The mean is probably about 85%.
Our agent thought we were starting too low (selling). Then she tried to discourage us from lowering the price, which we did anyway. We're now asking about 83% of the low-end figure she recommended to begin with, and we'll probably lower it again next week.
Another thing to consider: most sellers have mortgages and couldn't give you that lowball price even if they wanted to.
Now-the second home is much nicer than the first. The first is a foreclosure and needs a lot of cosmetic work, appliances, the pool needs some work, etc....The second home is in move in condition and is nicely upgraded. It would sell for a premium over the first house, but probably not for more than $700K.
So-an offer of 30% off the listing price would be appropriate for the second home. However, I expect the first home to sell right around the asking price.
Except there are homes "For Sale" on Zillow that closed 4 years ago. Not a good place to check for coms. Realtor.com isn't the easiest to use, but feeds directly from MLS so more likely to be accurat.
I think it is pretty clear you are letting your emotions get in the way. Otherwise you would entertain all offers and treat them as the starting point in a negotiation that may or not may end up resulting in the sale of your house. Which one would assume is your goal.
Quote:
Originally Posted by MrRational
^^This.
An actual (signed contract with deposit) offer has to be considered seriously.
Such an actual offer at 10% below asking is serious, is quite a reasonable starting point and in most/many markets will be closer to the final accepted number than any other.
Interesting. I didn't read his posts that way at all. I thought he sounded very calm and rational about the process. He knew where the price should be, and wasn't willing to negotiate below that just to make a quick sale, but from the sounds of it, that decision was made with a clear head. There was no talk of being "insulted" by the offer, or "upset" that someone would make such an offer. He looked at the offer, made a counter, the buyer countered back, and he saw it was clear that acceptable terms were not going to be met, so he rejected their counter. How is that not the correct process. Walking away from an offer is a negotiating tactic in and of itself. If the buyer really is interested, they may decide to be more reasonable on their next offer. Its a sound, unemotional tactic that has been around for a very very long time.
Anyway, back to the OP, there really is so much market variety that the question can't be answered other than by example. In my area, in our vastly changed market, any offer on a new listing for less than about 3% off the value of comps is a waste of time. In many cases, anything less than asking price (even if that asking price is set to high) is a waste of time, and in some cases, don't even bother unless you are paying cash and can make an offer 10% over the price it can appraise at.
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.
