Hello Shawn, I can only tell you what I advise my buyers when I am representing them under Buyer's Agency. We look at the market, what is going on, how many homes have sold recently in this area and how long did it take them to sell? Then we compare the subject home to those that have sold recently and are comparable to the one they are looking at. We then will look at how this home compares to all the others that we have seen and how it meets their needs while all the others did not. There is value in that. Where that number comes up, is anyone's guess. There currently, I do not believe, isn't a set % that is appropriate for opening with upon negotiations. There are still homes selling for 100% of asking price while others are selling at 75%. Do all the appropriate investigations, and then ask yourself, how this home meets your needs, you will make the right offer decision. Good Luck to you. Cynthia

HI Will and Shawn,
I have used Will's suggestion as a ck against what the comps and current market conditions indicate. However, there are 2 additional pieces of information that need to be added to the process.
1) Was the purchase price reflective of market conditions? And, was the purchase price an arm's length transfer?
2) What improvements have been made? What is the physical condiditon of the property now? Has it been properly maintained.

Historical data can be a useful checkpoint and is workth looking at, but has limitations.

Go have a look at tax records or ask your title company to search for what the current owner paid,(some states this info won't be available). If the current owner was in possession of the property prior to 2005, take his pay price and add a reasonable and historical appreciation, say 5 to 9% depending on area, per year. Reference this # with what your offering. Is your offer lower than what you would be paying if we had never had the big price jump? Or is your offer higher than "normal" appreciation would account for.

Thanks Deborah for the heads up. I just put answer in this one

http://www.trulia.com/voices/Home_Buying/In_this_market_what…

Sylvia

Duplicate Post/Thread: Same Q, Same A.

Depending upon the asking price, sellers’ motivation, market conditions, how well the property meets the needs of the buyer, and buyers’ motivation, 90% may be perfectly good offer. 80% may be low for a seller, but if it is the right offer price for you, you should make the offer.

Even in today’s market, paying 105% of asking price to a highly motivated seller who placed a very low ask price, could represent the best value proposition. Don’t let the % skew your decisions. Don’t let the idea of paying full price, or even over ask price lead you to think that you are overpaying. Let comps, market conditions, and personal value to you and yours guide you.

i.e. Assume an original ask price of 500K, and a seller reduced the ask to 400K. Would it have been better to pay 80% of the original ask? Of 100% of the revised offer price? What if, on this same property, the seller originally went to market with the 400K ask? Would a buyer be making a mistake because they paid 100%?

If there are other properties which might equally meet your needs and provide a better value proposition for you, then do not hesitate to walk away for a property if a seller has unreaslitic expectations.