you do not like comparing apples to oranges?
Please note the first line of my intitial response.
Jimbo, you are trying to retrofit to what existed in 2010 to the reality of 2013. In Jimbo's world, that seems like apples to apples ...... I guess. Clearly your expertise....or lack thereof, is showing through.
Today, a 25% low-ball is likely to get NO RESPONSE AT ALL. Sellers will simply state, "Refer to the orignal offer." Usually...absolute silence is the appropriate for these 'you've got to be crazy," offers.. Such offers come from those wasting oxygen.
Homeowner, sellers today, realize they only need to deal with serious buyers. The offer you suggest says everything EXCEPT serious. You can indeed have a hobby writing low-balls, but will become accustomed to being kicked to the curb in the 2013 market place.
Jimbo...I know you can buy low cost homes in Detroit. THAT IS EXACTLY WHAT I INTENDED TO COMMUNICATE. That is where low-ballers should be shopping. In non-distressed areas....you won't have a snow-balls chance in Florida. There is an exception.....Those FSBO's...easy picking.
Move in condition...for 5K.....You really, really, really need to go buy a whole buch of those. Rent them to folks. The whole world is happy. But for you to suggest a buyer to day should expect anything good from a lowball is reflective of those who are consuming BAD DATA...actually no data whatsoever. Show me your statistical data showing homes in Madison are selling anywhere near 25% below list price. Show the source of the data from which you make actionable decisions.
This will be good.
Basically don't let the agent bully or sob story you in a high offer to purchase as most are paid a percentage of sale price and not a flat fee. don't be afraid to offer a price that is less that what is owed... as some would rather lose some money at closing instead of having a foreclosure on their credit record.
There are some brokers that charge a nominal fee sometimes called administration fee and this would be agreed to ahead of time between buyer and buyer's agent.
As far as commission, in my state it is not legal to incorporate any discussion of "realtor" fees within an offer to purchase. The seller has nothing to do with it. The "realtor fees" are paid by the listing agent and has absolutely no place in a offer to purchase or a counter offer.
One should NEVER base one's offer price on the list price; rather, one should ALWAYS base one's offer on the current market value (CMV) of the property. Whether or not one opts to discount one's offer price with respect to the CMV (assuming one has 1 or more reasons for doing so), that's different issue altogether.
Plus, most people aren't great negotiators. Even if someone here were to give you a few recommendations on how to begin that negotiation, then your probability of success will depend upon your ability to follow through. What if the person who's recommendations that you opt to replicate is less/more aggressive, direct, and/or persistent than you are by nature, then you'll have to adapt his/her style to match yours.
good luck with your search and offer.
Please see my blog for some tips and advice on making an offer
By taking this approach you may find that you are not getting a good value and a fair purchase price. Pricing is a complex process and to take a general approach like trying to assign a "standard discount price" you may not hit the accurate fair sale price.
Markets and pricing varies from one location to another and from one seller to another and should be treated individually. To this end, it would benefit you to be working closely with a local real estate professional that can guide you through a successful transaction .....one that is in step with your pricing needs and the local market value.
Remember that an offer based on the facts of the market is far more likely to succeed than one that is not. Pulling % out of the air and applying them to a property regardless of how it is priced is a formula for failure....and incidentally may cause you to lose a property or pay too much.
Good luck to you,
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