However, unless the home is awfully expensive, an offer $175,000 less than the listing price probably won't succeed. Example: If it's listed at $1 million, then your offer would be 17% under the listing price. That'd be possible since--if it's been on the market for more than a year--we'd know that it's overpriced at $1 million. However, we wouldn't know how much overpriced.
On the other hand, if the house is priced at $500,000, even though we'd still know that the house is overpriced, you'd be making an offer for 35% under list. Yes, it might work. But the odds are pretty slim.
The best thing to do is to look at the comps. You say the "same models have been sold for a lot less." Same models in the same neighborhood are good comps. (Assuming the conditions of the properties are about the same.) The comps tell you what the house is really worth on the open market. Let's take that $500,000 example above. Suppose the comps come in at $440,000. That means you shouldn't PAY more than $440,000. You might offer either that amount or less. (Your Realtor can help you with your strategy.) But begin with the comps and work down from there. Don't start with the list price, especially when you know it's overpriced.
One clue you and your agent might look at to determine the seller's motivation. How often has the price come down, and from what level? Example, if it started off at $1 million, and has come down by a paltry $5,000 every 3 months, then there's no seller motivation. On the other hand, if it started off at $500,000 and has come down $5,000 a month every month, then there's some evidence the seller is reasonably notivated. (You get the idea.) The greater the motivation, the greater the chances the seller will seriously consider a low offer.
Hope that helps.
There are several things to consider as you develop your purchase offer:
1 Is the asking price in line with prices of similar homes in the area? Your real estate agent can conduct research, called a "Competitive Market Analysis" or CMA, on comparable properties, to help you come up with an educated opinion on the worth of the property.
2. Is the home in good condition – or will you have to spend a substantial amount of time and money making it the way you want it?
3. How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted.
Prudential California Realty
The real question is; WHAT IS IT WORTH?
If the Comps are at -$175,000, then it might eventually be possible.
The Seller would have to come to the realization of it's real worth:
This is assuming that the Seller is not distressed and will hold out for the higher price,
In which case you need to walk away for a few years.
You need a CMA to determine the VALUE before you go any further; otherwise, the arguments are moot.