You've already gotten a variety of good answers below. The 'bottom line' is that every situation is different and there are many variables. I'm hoping that you are or will be working with a good and knowageble agent who can guide you to a successful negotiation, based on data that the agent will provide to you. When I'm working with Buyers, I like to try to find the 'magic number' - not quite as much as the Seller wants, but so good an offer that they will take it without further negotiation, because they are afraid to lose a good Buyer. Good luck!
One of the biggest values an agent brings to the table is negotiating skills. Being able to feel out the mood of the transaction and advise you accordingly. Ask his/her adivse!
Now if you are not the only offer on the property, this can affect your negotiating strategy a lot. The seller still has the option to just pick one offer and accept it. There are no rules stating that they have to give anyone a second chance. Most often, however, in a multiple offer situation, the seller will ask all parties for their "highest and best offer". This is your opportunity to improve your offer and set yourself in the best possible position for the seller to accept your offer.
Please understand, however, that the highest price does not ALWAYS win out. The agent will assist the seller to evaluate the buyer's capability of completing the purchase. They will look at percentage of down-payment, type of mortgage, inspection clauses, pre-qualification letter or proof of funds letter, etc. I still remember one property I marketed where the bank/owner chose to take a $155,000 cash offer/close in two weeks, and left four higher offers (one was $180,000) on the table because, even though they were over asking price, they were looking for mortgage financing with less than 10% down.
Ultimately, it is the seller's choice as to how the negotiations are handled. They have NO OBLIGATION to go back and forth with a buyer, and can accept an offer at anytime. That means that if the buyer insists on small steps in the negotiations, they have opened the window for another buyer. For instance, you may have been negotiating with a seller for a day or two (or more), and maybe you are only a small distance apart from a fully accepted contract. Another buyer could present a strong offer and the seller has every right to abandon negotiations with you and to flat out accept this other offer without negotiations, without notifying you that another offer even exists.
It's important to be represented by an agent with good negotiating skills. If you have not hired an agent yet in your area, I would be glad to provide you with a quality referral. With 26 years selling Connecticut real estate, I have had the opportunity to work with several excellent agents in your area. I would be pleased to be of assistance. Feel free to call me at 860-688-1400/ ask for Lisa Orme.
Good luck Karen!
The Seller wants to get the MAX,
You want to STEAL it for 10 cents on the dollar.
The Seller sets a LISTING PRICE, which might be higher than he will take, or, it might be lower:
A lot of Sellers are trying to attract multiple offers by pricing it LOW.
No matter what the Seller has done, you need to know what the MARKET VALUE of the house is.
It will keep you from offering too much, and it should get you under the Appraisal.
You must get a CMA (Comparative Market Analysis) from your Realtor:
Now you will have a benchmark to work from; you can even include the CMA with your offer, to show that there is REASON behind your numbers.
You may have only one chance to be taken seriously. Use it wisely.
The number of times that a seller will counter an offer varies depending on their motivation and financial situation. Hopefully, your agent has disclosed to you what the property sales history is on the property as well as what similar homes have sold for recently in the neighborhood. This way you have a better idea of what the property is worth.
Good luck to you!
Prudential Connecticut Realty