Home Buying in Manassas>Question Details

Jhs, Home Buyer in Manassas, VA

In a buyers market, like NoVA, what is a realistic opening offer on a house which has been on the market for over 2 months, and is sitting empty?

Asked by Jhs, Manassas, VA Sun Oct 3, 2010

When a house is sitting empty and listed for over 2 months, is a 10 or 15% below asking price a reasonable starting point?

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12
Jhs,
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 :-)
1 vote Thank Flag Link Sun Oct 3, 2010
Generally it's hard to get a response 10% below list price. However that is almost irrelevant because each listing is case by case.

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.

J
1 vote Thank Flag Link Sun Oct 3, 2010
All these guys are on target. If your agent has crunched the numbers and done comparisons and the house is over market value, you could offer the appropriate price. Using a percentage isn't going to work, even with a short or a bank owned. Sounds like there is either something wrong with the house or the seller simply won't negotiate. Either way he/she may just be unrealistic about market values.
0 votes Thank Flag Link Tue Aug 28, 2012
After 2 months you could assume that the home is over priced, or possibly the Seller has already had several unacceptable offers and is set on the listed price. The big question is... Do you want this house or are there others that meet your needs at a more affordable price. Make your offer, your offer, or take your chances with the sellers current motivation. There is no hard and fast rule. A sellers motivation is a mystery indeed.

Good Luck..
Mike Minnery
RE/MAX Allegiance, Broker
Web Reference: http://www.MikeMinnery.com
0 votes Thank Flag Link Mon Oct 4, 2010
If I was your agent, I would call the listing agent and talk about what the Seller's are trying to accomplish. Most sales are win-win. ( excluding distressed properties )
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.

Best-
Jay
Web Reference: http://TalleyHurstHomes.com
0 votes Thank Flag Link Sun Oct 3, 2010
Jhs, you can't control the emotions and feelings of the seller. Your agent has to negotiate strongly based on logic and analysis. You could offer $500 less than the asking price and offend the seller. The point is to provide a resonable offer based on the market conditions, prices and condition of the property. If you focus on those things, then you can negotiate a win win situation for yourself and seller. Your agent has to work for you and not the interests or feelings of the seller. This is why you have a REALTOR working for you.

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.
0 votes Thank Flag Link Sun Oct 3, 2010
As everyone has said, there's not a good stock answer. You have an agent? If not, I recommend one.

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.
0 votes Thank Flag Link Sun Oct 3, 2010
Hi Jhs,
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.
0 votes Thank Flag Link Sun Oct 3, 2010
Good Morning JHS,

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
0 votes Thank Flag Link Sun Oct 3, 2010
Obvioulsy it will depend on the current asking price vs. the comps. It's not realistic to assume that anyone can get a ratified contract 10-15% below the list price just becasue it's a "buyer's market".

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'!
Web Reference: http://www.jimmccowan.com
0 votes Thank Flag Link Sun Oct 3, 2010
Hi there - it very much depends on whether the home is priced correctly. At 2 months on the market, unless the price has been adjusted, it is overpriced. You do your best to price a home based on comparable sales but the real answer to whether you have it right comes once the home is listed. If a home does not attract visits - price needs to be adjusted. If the home attracts activity but no offers - the same is true. At the 2 month mark, if a price adjustment has not occurred I would say it is long overdue.

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!
Jeanne Feenick
Unwavering Commitment to Serivce
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sun Oct 3, 2010
As Jay has said you can't just assume a 10-15% offer less than sales price is going to bring you any response. Comps for the area are the first thing you need to review. Also how do you want to structure your offer? Do you need closing cost assistance to be able to close the deal? Have you factored those dollars into determining what you want to offer. What other concessions are you looking for? If you aren't already working with a good buyer's agent to represent your interests and help you right the winning offer then you should.
0 votes Thank Flag Link Sun Oct 3, 2010
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