Home Buying in 55412>Question Details

Justin, Home Buyer in downtown mpls.

Offer Price Vs. Asking Price

Asked by Justin, downtown mpls. Wed Jul 2, 2008

Hello,
I am going to make an offer on a house shortly but I am concerned that recent home sales nearby sold for much less than the list price on this house. Even though the price of the house i'm interested has been lowered $40,000, it still seems as though it is over priced compared with nearby comparable homes. The list price is currently $79,900 and i'm thinking about offering as low as $55,000. Would the buyer be insulted by that large of a low ball on the asking price?

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Your local realtor would be able to pull that information for you. Also, it sounds like you are an unrepresented buyer. Since the owner has already determined the amount of commission when they signed the contract with the real estate agent/broker selling the home on their behalf, you could be represented by your own real estate agent/broker by entering into an Exclusive Buyer's Agency Agreement. They would be paid after closing according to the terms set forth and published on the local MLS. This usually gives half of the commission to the buyer's agent and half to the listing/seller's agent. If you choose to be unrepresented, the listing/seller's agent/broker will take all of the commission. In other words, being represented does not change the price you will pay; it only means that you will not have the benefit of a professional protecting your interests in the transaction.
1 vote Thank Flag Link Wed Jul 2, 2008
Justin: Get the name of at least 3 known realtors in your area, interview them, hire one of them (sign a contract) and then give them this situation. that's their job, that's their profession, and that's why people need to HIRE A PROFESSIONAL REALTOR!
0 votes Thank Flag Link Wed Jul 2, 2008
Hi Justin!

First of all, sellers who are insulted by any offer in this changed market are not well prepared by their agent. No seller should be expecting a full priced offer. All offers should be seen as a starting point for negotiations. Buyers do not want to start too high as they are concerned with overpaying for a home. Any offer should be viewed as a starting point.

That said, I am going to assume that you are working with a buyer's agent and not in a dual agency with the seller's agent writing up the offer. In this case, you should ask your agent to do a market analysis of the homes recently sold in the area to back up the lower offer. It might not prevent the seller from considering the offer low, but it can justify it.

If you are in a dual agency, your agent cannot do a market analysis for you as he/she cannot do anything to harm either client. What I would suggest in this case is to find the homes you believe have sold for less and give to your agent to present with the offer.

Here's a link to a post on my blog about lowball offers: http://mnrealestateupdate.blogspot.com/2008/04/lowball-offer…
Web Reference: http://www.terieckholm.com
0 votes Thank Flag Link Wed Jul 2, 2008
Justin - I work with buyers in the Minneapolis area, if you are unrepresented and would like the assistance of a realtor I would be happy to help guide you through the offer process. I can be reached at 763-548-1410.
0 votes Thank Flag Link Wed Jul 2, 2008
After working with a realtor to determine the market price for the neighborhood and the home you are looking at, the next question would be would you be disappointed if you didn't get the home. A client I have been working with just lost a home in a situation where they offered a low price and the selling agent accepted a standing offer slightly better than ours without offering us a counter offer. Some sellers are offended by low offers but if it is consistent with similar homes in the neighborhood than you should feel confidant in your offer.

If you are looking for a realtor to assist you in your purchase feel free to give me a call. 612-239-4858.
Web Reference: http://YourUrbanRealtor.com
0 votes Thank Flag Link Wed Jul 2, 2008
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