You received some excellent answers here.
One more observation: It is absolutely irrelevant that the property is over-priced and is on the market for over 2 months, UNLESS the seller is willing to negotiate.
For example, often sellers who OVER-improve their property for the neighborhood they live in have an exagerated sense of the market value of their home - they are willing to wait untill they receive "their" price. And if the mortgage is paid off, they might be in no hurry and are willing to wait a very long time in order to get "their" price.
For the real estate transaction to happen, the seller and the purchaser must be on the same page, or at least reading the same book :-)
Perhaps go to the listing at the link below and when you click on the listing you'll find recently sold listings on right column and that will give you comps to work with.
bottom line you need an aggressive agent looking out for your $$$ interests.
RE/MAX Allegiance, Broker
Then I could report back to you and see if there was enough common ground to move forward.
The point is either you want this property eough to find the middle ground or maybe you do not.
Only when you find the middle ground will you be successful. Communication is the key.
There are a varieyt of places where you can get information on home prices. But its still best to get an agent to perform a complete analysis of the property.
I do agree that most of the time, even if a home is over priced (which is usually the reason it's still on the market), sellers are not willing to consider an offer that is more than 5% below the current listed price. However, that is a huge generalization, and not necessarily relevant to this situation.
Unlike someone else's response, you should care if you "infuriate" the other party. Strong negotiations work by focusing on the things parties have in common. They want to sell. You want to buy. Focus on that.
There's a link below where you can get a list of nearby comps that have recently sold and you can work from there, but again this does not replace a competent agent doing a true market analysis for you.
It really depends on a number of factors. The reasons for the house not selling are also dependent on different issues. In order to determine the best fair market price, your agent should do a thorough market analysis, and not just a traditional CMA. It's best if your agent is familiar with BPO's.
In my opinion, it's irrelevant whether you infuriate a seller or not. If the property is listed too high, the seller isn't going to get what they want anyway. Your agent's goal is to protect your interests and help you secure the property you want at the best fair market value.
Short sales and REO properties have different considerations too. So if this particular property is one of those, talk to your agent about what the expectations are from the bank. Some questions and research will have to be done. Each bank has different requirements depending on the investors.
Hope my opinions are useful.
Generally speaking, a 10-15% discount off of the list price will infuriate and insult a Seller. A good buyer representative will consult with a listing agent to get a feeling of how hard and fast the list price is before an offer is presented as well as offer you a list of comparable sales prices in the area. There are so many variables to consider: Is it a foreclosure or short sale? Are you a cash buyer? Do you wish additional seller concessions? What type of financing do you offer?
If the property is a bank-owned or short sale, it is very likely the property is price within 1% of the market due to the appraisals and broker price opinions that have been collected by the bank and it will sell very closely to that price even if it is on the market for a long time. A property is often on the market a while because previous offers have fallen out due to financing or other reasons.
Find a good buyer representative who is able to counsel with you and be able to send you listings in your comfort zone. If you have further questions, please give me a call at 571-722-4348 ~ Janet
Be careful when looking at recent sales information on Trulia. I've seen some cases where comps that are 5 years old have been used as "recent'!
Time on the market does affect value - particularly in a declining and/or sluggish market. But in most markets, it is taking longer than 2 months for homes to sell on average. In fact 5-6 months is considered "normal" or balanced, anything less a buyer's market, anything more a seller's market. But the fact is this, the excitement for any property diminishes greatly after the 45 - 60 day mark. Like you, most buyers are actively looking online, they are well educated, they know the inventory and pricing. While on average homes are not selling in most communitiies in their first 60 days on the market, it remains the most important time in the marketing program - the time of greatest excitement and interest - making overpricing during the initial period of the listing a big tactical mistake.
So bottom line is this - what you need to have to guide you is precisely what the seller should be looking at to evaluate a price adjustment and that is a pricing analysis. It will guide your bid and negotiations. An offer based on the facts of the market - and that is just what will be doing - is far more likely to succeed than one that is not. I always have my pricing analysis at the ready when I present an offer for a buyer, so that I can substantiate why our offer makes sense.
Put another way, a well constructed pricing analysis will immediately flush out overpricing, but it will also help you identify bargains, ie well priced properties. This one - at two months on the market - may not appear to be that, but if a recent price reduction brought the property to its "strike price" then it may move quickly and somewhere between 1-5% of that strike price.
So you get the idea, you need more information on the specifics of the property and the comps. If it is way overpriced, then its possible that 10-15% is not enough of a margin, if it is price properly then it may be far too much. Your opening bid is to initiate a dialogue and prompt a response from the seller. I've found that the way a discussion begins plays heavily into how the process proceeds.
Good luck to you!
Unwavering Commitment to Serivce