By researching recent sold comparables you will be able to make an intelligent decision.
When doing research with your agent look at how the property was purchased.
Properties that sell for cash in some areas can sell for a little less. This is because cash offers are easier to close, take less time to close and there is less risk for the seller that something will go wrong as it could with a financed buyer.
A property can look as if it was sold for a higher price when it actually had closing costs built into the price due to the fact that many buyers ask for the seller to pay for closing costs.
So many things to research when looking at recent sold comparables and no magic formula.
Again, trust your agent and remember all Real Estate is Local, local trends not National trends will give you the best picture of what you should offer on a home.
There is no hardfast rule on percentage below list price. Every situation is different and your agent should be able to analyze the value of the property and then make an appropriate offer without necessary regard to the list price. Many people are not comfortable making lower offers than 5 or 10% below list price but if you have the comparables to back up the offer, I see no reason why you cannot go even much lower than 10% below list price. In the last year we have made offers up to 20% below the list price and settled at least 15% below. We've also paid 100% of the list price te 1st or 2nd day on the market if it meant getting an awesome deal before anyone else has a chance to see the property. It all depends on the seller motivation, comparable sales and other factors.
Best of luck,
Your Real Friend in Chicago Real Estate
Every situation is different. Your agent should prepare CMA for you and go over it with you.
How much you will offer depends on many things. How long has this property been on the market. How is it priced for the market over or under the market price. How negotiable is the owner? Are they desperate to sell?
Had they had any offers in the past? Is this a short sale? Your buyers agent should be able to provide you with all of these answers before you place on offer. After you have all the information you will be able to reach a better decision. Good Luck!
Ifeta Faye Redzovic ABR Broker Chicago, il. http://www.firstgoldrealty.com
Forget the list price, have your Realtor show you recently closed sales in the neighborhood. Then take into consideration of homes condition compared to those sales. Not very many pics of those homes then consider them average. That is a more realistic view of what price need to be offered in order to be the offer that is accepted.
Be careful when choosing a program. I sent a client to a Realtor and Lender in the Chicago area a few weeks back. He was specific that they only had 3.5% down. That fit perfectly with an FHA program. They were fully pre-approved to $600K and found the perfect home. When the lender went to get a specific FHA approval for that house it came back declined....how could that be? They were approved to $600K and the contract was for $550K.......In the specific County they were writing in, the FHA max loan amout was $410K. Make sure your lender checks the loan limits for the County you look in.......it's painful when you have to decrease your search $150K after you already fell in love with a certain home and neighborhood....Good luck!!
There is no sure fire rule when bidding on a property, especially in the current market. Many properties are overpriced and there are some, particularly bank owned properties, which may be underpriced. One of the most important responsibilities of your real estate broker/agent (assuming you have one) is to research and reasonably determine a market value for any given home that you are interested in purchasing. Without conducting some due diligence on such a huge purchase prior to submitting a bid, you could wind up purchasing a property far above its value in today's economy. Be careful in today's market, as prices are all over the placeâ€¦I would argue that the value of sound valuation is more important than ever. Best of luck.
1. Is the home priced near market value?
2. What have the compable properties sold for?
3. Have their been price reductions?
4. Are you negotiating with a seller or a bank? If a seller, what is his or her financial situation?
5. You can study the average "discount" in the area. In Hinsdale - the average discount is closer to 10%.
6. There is something that doesnt translate well to dollars - and that is, how much do you want the home?
7. Are there other comparable properties for you to select from?
Hopefully, this response gives you more to think about. You want your agent to be willing to be aggressive for you and work for the largest discount.
In a nutshell, you can't pay attention to all the data and statistics out there. The only way to really figure out what to offer on a particular home is to look at other homes in that area that are similar and see what they are listed at and have sold for. Base your price off of that.
You can go as low as you want. Have your agent draw you up a CMA and give you an accurate idea of what the house is worth. From there make a reasonable offer. Good luck!
Americorp Real Estate
Brokers Associate, e-PRO