The best answer has already been given - what have comparable homes sold for? I have come across both unreasonable sellers AND unreasonable buyers. I have had buyers make offers 50% below the list price even when I showed them that the home was priced really close to market value based on comparable home sales in the past 3 months. Did the sellers take it? Of course not - the sellers felt the buyers were unreasonable (based on comps, they were) and the buyers felt the seller was unreasonable (but based on the comps, they were not.)

Each area is different. In some areas the real estate market did not take the same nose dive as did Michigan, Florida, Nevada, Cali. In my area, many of the sellers are not financially desperate and are willing to wait for their price and are unwilling to give their home away. The super cheap foreclosures usually need lots of work or are structurally unsound...

Ask your buyer's agent to provide you with comparable properties and go from there. You shouldn't have to ask - it should be a normal part of the process for a good buyers agent.

If you follow the advice below, you will get no deal. If you live in Nevada, Arizona, Florida, or California you MAY get bank owned property for 75% off, but in my area you won't. The bank owned property you get for 25-35% off is going to have MAJOR repairs that need to be done (i.e. ALL the plumbing and heating replaced), so beware of REOs.

The way to determine how much to offer is to do research. Find out how much comparable homes in the area sold for and adjust to market conditions. Unfortunately much of this research involves actually seeing the inside of these homes, so hiring a buyer agent to work for you is the easiest way to do this. If the home last sold in 2004-2005, factor in the depreciation that has taken place in your area. If the home last sold 15-20 or more years ago, you'll be in a better position to to have an offer accepted, since these homes will probably still have tremendous equity built up.

The bottom line is there is no "common occurence" or "rule of thumb" involving a percent below asking when it comes to making an offer. In your area, square feet may be a reasonable guide, in my area square feet is not.

Hi Paul,
It depends on the area you're looking to buy. Some areas are still depressed and may be bargains. Some are over priced as the reality of the current market is not realized. If your working with a realtor, they should be able to assist in showing you comps as well as other data to help establish guidelines for your offer. If your not working with a realtor and looking for a buyers agent in the Lehigh valley area, I can help. Contact me if you want a full-time agent and lifelong resident to represent you as a buyers agent, I would welcome the opportunity to help in your search.

Paul Johnson
Weichert Realtors
610 317 4163

If a fair price is to be found then it will be found in the REO's or bank owned property. 50% to 75% off of asking is required at the offer to begin with. These banks are very delusional about their boxes too.

Get a great deal or no deal. Seek 1980's prices cause realty is going to get much cheaper going forward.