That’s a question every buyer is asking right now. And the answer is, quite simply, it depends. At the heart of the issue is what the house is worth to you, and what the seller is willing to sell it for. There are a number of variables that influence the equation when deciding how much you should offer for a home:
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Is the house priced fairly to begin with? The example I like to use is that a buyer may only pay 90% of asking price for an overpriced listing, while another buyer pays full price for a listing that is positioned properly in the market - and the buyer who paid full price gets the better deal. To focus entirely on how much below asking price you offer is only a valid consideration if the asking price is realistic to begin with
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Is the house in great condition, or will improvements be necessary? In a market where many listings are short sales and foreclosures that are being sold “as is,” you must adjust the relative value of the property for any repairs or improvements that need to be made. It’s important to be able to demonstrate the difference when you make a low offer.
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Is this the perfect house? Are there alternatives? If you have truly found your dream house after weeks or even months of house hunting, and the price is fair, don’t risk losing out because you can’t get a “bargain.” Regardless of the market, great listings that are well priced still move quickly.
One last word of advice to buyers in this market. Think long and hard before making a ridiculously low offer if this is a property you really want. I have seen countless sellers who are offended at a low ball offer and simply refuse to negotiate with a buyer in that instance. In that case, you’ve simply cut off your nose to spite your face, because had you made a more reasonable offer to begin with, you would created a more favorable negotiating environment.
Getting advice from a professional real estate agent will help you make decisions like these. Fill out our Buyer Interview form and let one of our agents get you pointed in the right direction.
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