Home Buying in Los Angeles>Question Details

Billy L, Home Buyer in Westchester, Los Ang...

In this current market, how much below the listing price should I make my an offer? Lots of them seem to have been sold at or above the listing price

Asked by Billy L, Westchester, Los Angeles, CA Wed May 8, 2013

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BEST ANSWER
Ask your agent to pull comps and do an analysis of the area unless he/she is an expert in that community. If they are, they will know approximately what the house will sell for. If it's priced right and you are expecting to compete with other offers, you will again have to rely on your agent's skill and their relationship/knowledge of the other agent and how they do business. When a property is aggressively priced, there may be 10+ offers. Your goal is to get a counter offer and then proceed from there.

Even though this is legitimately a seller's market some houses are overpriced. Make sure you have an agent that can help you understand home values.

Remember that the sale price is set by the buyer. What is someone (not necessarily you) willing to pay for the house? That is what it will sell for. One caveat: a cash buyer will not need to rely on an appraisal. I financed offer will. The financed offer will be restricted to the appraisal amount whereas the cash buyer can pay whatever they want.

Good luck!

Mark Mintz
http://www.eastsidedigs.com
310-991-3808
1 vote Thank Flag Link Thu May 9, 2013
This is real estate you're talking about, right? Every property is different. There's no way to generate a blanket approach. In general, you can forget about offering below list, even if it seems overpriced. Once in a while, you might find some grossly overpriced home and you can get it for below list. But, to get a home for below market, you'll have to dig very deep or partner with a Realtor willing to share those deals with you.
Web Reference: http://www.archershomes.com
3 votes Thank Flag Link Thu May 9, 2013
great answer
Flag Sun May 12, 2013
Each property is a unique situation. There are a multitude of variables that your agent should discuss with you before making an offer on any property.

Some things to be aware of are how much interest is there for that property. How many others are also about to make an offer? How badly do you want the property? And a myriad of other issues.

It is your agent's job to direct you in the best way to handle your needs and goals. Providing that you trust your agent, you should dialog this most important issue.

Hope that helps!

Larry Maiman
Keller Williams Beverly Hills
310 432-6400
2 votes Thank Flag Link Thu May 9, 2013
Thank you
Flag Thu May 9, 2013
Billy,

You seemed to have answered your own question. If "lots of them seem to have sold at or above the list price" wouldn't this be a good indicator for how the market is trending.

As a buyer, you can make any kind of offer you think will work but the best offers are those that are an accurate reflection of the most current market activity as well as condition & desirability of the property. A good offer is one that the buyer's agent has the true ability to defend.

So if you are taking the tactic of generalizing and going in automatically 10, 15, 20 % under the asking price, you could be building a very good case for disappointing yourself. There's much more to the process than that.....

Just keeping it real...

Bill
1 vote Thank Flag Link Sat May 25, 2013
Hi Billy,

Before writing an offer on a property, the best thing to do is to check the comps of recently sold properties. Your agent should be able to obtain a recent list of the most similar properties that have sold in the same neighborhood. Also, the comps should be within a one mile radius of your subject property and recent sales (last 3-6 months). The market has been moving very quickly and I would hate for you to lose an offer because your Agent didn't do their homework .

Are you a first time home-buyer? In today's market ,especially in Southern California the market has dramatically shifted in the last year to a Seller's Market and sales inventory has decreased. Most good properties will receive multiple offers and it is key to work with an agent that can educate you on the process of accomplishing your real estate goals. Moreover, it is important to work with an agent that knows hows to get offers accepted ! If you need any help, I would be glad to discuss my "WINNING" home buying strategies with you. I specialize in the Southbay and surrounding areas.

Best of luck and have a great Memorial Day Weekend!

Anna Maria Kitras, Broker
annamaria@southbayluxuryhomes.com
323-608-4881
http://www.southbayluxuryhomes.com
http://www.buyinglosangeleshomes.com
1 vote Thank Flag Link Sat May 25, 2013
thank you
Flag Sat May 25, 2013
Hello Billy,

I would not suggest low balling in this market. Make an offer in accord with the comps. Most homes, if riced right will go at list or even above list these days.


Even REO homes are not going for under list much these days, unless the buyer is paying cash.

Best of Luck to You!

Kawain Payne, Realtor
1 vote Thank Flag Link Tue May 21, 2013
Your agent or I would have to look at comparable home prices to be able to advise. Do you have an agent or need homes emailed to you to study and consider? Do you have pre-approval, down payment and closing costs? Let me know if you need assistance. Here are some links to study.

http://www.under640ficoscoreloans.com/Pages/Conventional.aspx

http://www.under640ficoscoreloans.com/Pages/FHA.aspx

http://www.under640ficoscoreloans.com/Pages/JumboLoan.aspx

http://www.under640ficoscoreloans.com/Pages/CHDAPLoans.aspx

http://www.under640ficoscoreloans.com/Pages/HalfPercentDown.aspx

http://www.under640ficoscoreloans.com/Pages/ContactSheryl.aspx
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1 vote Thank Flag Link Thu May 9, 2013
it depends on how the listing is priced... some listings are priced too high to begin with and yu can offer less... but in general all properties are selling for more than listing and there are multiple counters...

So if you want to compete, go all in!

Best of luck!

Ron
1 vote Thank Flag Link Thu May 9, 2013
If you have noted that homes are selling at or above listing price....why would you want to make an offer "below the listing price?" Seems like an oxymoron to me.

Those buyers that insist on writing lower offers in this market will simply not get a home. Note the trend and adjust your biding stragegy accordingly.

Best of luck.
1 vote Thank Flag Link Thu May 9, 2013
You pre-judged me. I wasn't one of those buyers who " insisted on" offering lower, in fact, I was the only one offering higher than the listing price, and yes I did just get a home, all because others offered lower! My agent didn't tell me I had the option to offer lower, now I know, so Just because the current market sustains a trend like this, doesn't mean I shouldn't arm myself with knowledge for future references.
Flag Fri May 10, 2013
Billy: That's the wrong question.

Why?

Because the listing price does not necessarily reflect either: (1) what the home is worth, or (2) what other people might be willing to pay for it.

Let's take those one at a time.

What a home is worth: You're assuming, incorrectly, that a homeowner (and his/her agent) knows about what a home is worth, then marks it up a certain amount--say 5%. Sometimes that's how it used to be done. But no longer. First, with the mix of conventional sales, short sales, and foreclosures, three similar homes may have three very different price tags. Second, there are different strategies for selling a home. Regular home sellers might tend to price the property at or slightly above what they think it's worth. Investors who've rehabbed a property want a quick sale and often will price the property about 5% below what they think similar properties should sell for. Some short sales and foreclosures are priced substantially below market, with the anticipation of a bidding war raising the final sales price to, or even above, comparable sales.

What other people are willing to pay for it: Lots of people act on emotion. In the example above, with properties priced well below the comps, bidding wars can drive a price surprisingly high. So don't assume that the listing price reflects what people might pay. It could be higher or lower.

Bottom line: Basing your offer on the listing price is a poor idea.

How should you make an offer?

Easy.

Find out what the house is really, truly worth. (That's also important when it comes to getting funding. If you make an offer that's too high and the house doesn't appraise for that amount, you won't get a mortgage.) Ask your agent to do a CMA on the property. And make sure you also look at all the other comprable properties currently on the market. (Comps reflect properties sold within the past 90 days. Allowing for a 45-60 day closing, that means some comps might have gone under contract 5 or more months ago.)

Once you know about what the house is worth, you and your agent should come up with a strategy. Do you want to make a "best and final" offer near the top of the range? Or, if you're not in love with the house and hope to get a bargain, do you make an offer moderately below the comps?

Notice that you're making an offer based on the value of the home, your interest in it, and a strategy that may best achieve your goals. Nowhere in the process did you (or should you) begin from the listing price.

Hope that helps.
1 vote Thank Flag Link Thu May 9, 2013
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Dear Billy,
Take my advice and connect with a good local Realtor to assist you as your "Buyer Representative". Real Estate can be tricky, and your Realtor will be able to find out the information you need to make an offer that will have a chance of being accepted. Each sale is different, each home and owner is different too, what will work with one....may not with another. If you hire an excellent and experienced "Buyer Agent", you will be able to close the transaction successfully.
1 vote Thank Flag Link Thu May 9, 2013
Billy,
It does depend on HOW LONG you want to be looking for a house.
If you want to BUY a house, you offer must be competive. If houses are selling at or above listed price that should be speaking clearly to what you must do or your actual intention.
-
HOWEVER...
-
There's always a however,
if you commit to a real estate professional there are stategies that can prove helpful to you.

Best of success to you,
Annettel Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
1 vote Thank Flag Link Thu May 9, 2013
Hello Billy,

There's not a set rule about how much to offer in relation to the asking price, just as there's not a set rule about where to price something in relation to how much it's worth. Some sellers will price their home low in hopes of inspiring a bidding war, and others will price their home high just to see what buyers will offer. I recommend that you think less about what the asking price is for a home and more about what the home is worth in today's market. In general in Los Angeles, this is an excellent time to buy. Prices, although on the rise now, are still very low, and interest rates are at historic lows. Savvy buyers recognize this so competition is strong. When you find a place that works for you, don't fool around. Put your best foot forward and do it quickly. Because if you don't, someone else will.

Please feel free to contact me anytime if you'd like to discuss any this further, or if you have a specific property that you're wondering about. I'll be happy to help you however I can.

Good luck!

Marty Walker
eXp Realty
323.559.5823
marty.walker@exprealty.com
1 vote Thank Flag Link Thu May 9, 2013
You'll be wasting your time trying to get a "deal" in this market. The inventory is very low and will be low for next 2 years. If you like a property, follow your agent's lead - the agent would know if you should be submitting at or above asking price. Good luck. It's tough out there. Let me know if you'd like professional help. You can contact me at lenasrealtor@yahoo.com.
1 vote Thank Flag Link Wed May 8, 2013
Come on Billy, I think you know the answer to this question.
1 vote Thank Flag Link Wed May 8, 2013
If you are seeing a lot of them sell at or above the listing price then you should probably make your offer at or above listing price as well. You may be able to offer below listing price and have the seller accept your offer but it really depends on the seller and what the property is most likely worth.
1 vote Thank Flag Link Wed May 8, 2013
This question is Best answered by your agent - it all depends on the particular property and price. Sometime you have room to negotiate sometimes property is over priced and sometimes it is underpriced so it actually make Seneca to offer over asking - it all depends on the deal.



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1 vote Thank Flag Link Wed May 8, 2013
Hello Billy,

I would not suggest low balling in this market. Make an offer in accord with the comps. Most homes, if riced right will go at list or even above list these days.


Even REO homes are not going for under list much these days, unless the buyer is paying cash.

Best of Luck to You!

Kawain Payne, Realtor
0 votes Thank Flag Link Tue May 21, 2013
Hello Billy L, your agent or Broker is going to be the #1 resource you will want to go to to answer this question. Majority of properties are selling for full list price and many of them above asking price. If you don't have a Realtor, feel free to contact me anytime and I would love to assist you. Your Realtor should provide you with all the recent sold comparable properties in the area and help advise you of an appropriate price range for submitting your offer.

Have a great day,
Heather Paul, Broker Associate, Realtor
Coldwell Banker
310-923-2334
http://www.HeatherPaulOnline.com
0 votes Thank Flag Link Tue May 21, 2013
Each property is different. If the property is overpriced you would want to offer less. If the property is under priced and has multiple offers then you would offer more than asking price.

I have bought and sold property for myself and others in Westchester.

Let me teach you how to buy and sell real estate.

Al Goldberg
800-765-3609
ALYourBroker@yahoo.com
0 votes Thank Flag Link Thu May 9, 2013
It depends on the deal. In many situations right now, if someone really wants a property, they'll need to write for more than the list price.
0 votes Thank Flag Link Wed May 8, 2013
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