Prices have dropped, so you might be surprised to learn that homes are selling for an average of 97% to list price in Winston-Salem right now. This does not discourage buyers from bringing offers in at 80-90% under list price. Most deals are working out at 97% on average.

Just as a point of reference, we just reached a contract price on a house in W-S at 5% below asking price. Our initial offer was twelve percent below asking price. That said, our appraisal came back almost 5% above asking price, so maybe this is just an odd deal to begin with.

Just because the market is a buyer's market does not make for an automatic discount on a property. What if the property is exactly what you want and it is priced correctly, and the owners are not in dire need to sell. A low ball offer may create a air of tension, especially if the sellers are insulted by the offer. Then you may not be able to purchase the home at any price. They may just refuse to sell it to you.

Home buying and selling is sometimes a very emotional event. It certainly may be the most expensive thing you may purchase, and the buyer may sell. That is why it is usually more effective to have a Realtor represent the seller, and another represent you, the buyer. Both Realtors will approach the buying process on a professional level, without emotion, with each representing the interest of their respective clients.

Do youself and the potential seller of your home a favor by hiring a professional to represent you and negociate on your behalf. It will make the process go much better.

Merri,
As you can see from the answers below we don't have a magic number. First of all it depends on the home, the neighborhood, the average days on market for the homes in that neighborhood, the average list to sale price variance for the homes in that neighborhood/area, and it depends on the financial situation of the seller. I personally do a lot of financial investigative work on any homes that my buyers look at. I dig pretty deep to find out where their breakeven is and what type of motivational things there are that I can use to our advantage. Work with your agent and see what they can find out about the sellers of the home you are interested in. If you need some help my team and I cover the whole Triad area. Otherwise if you do have a buyer's agent just have them help you with that. As you read below it is a fine line between insulting the seller and leaving money on the table.

Merry Christmas to you and your family and Happy House Hunting.

Hope this helps,

Merrri:

I'd suggest having your agent do a competitive market analysis to see if the property is "fairly" priced, ie in line with prices for properties that have recently sold AND are currently listed for sale.

Also find out if and when there have been any priced adjustments: this will indicate if the seller is intransigent about market conditions, or is realitically trying to "meet the market".


Finally, try to get the agent to show you what sale price to list price has been runnning for properies in this price range.

If the seller seems realistic, and motivated (but not desperate) then I think a bid more than 10% off asking is
dangerous. If the house is not just any old property, but something special that you really like, then you don't want to insult the owner and shut off all further discussion. You want to open up a conversation. Most sellers are realstic enough to know they are not going to get asking price, just as most buyers don't expect
their first offer to be accepted. Its a slow, steady dance til you win the trophy.

Hello Merri,
Don is right on, this is a crazy market to have a formula in. Have your buyers agent do thier homework and offer accordingly. I have had buyers throw low balls out recently and not get a counter. But these buyers have been unemotional about the house, so they move on. Well I can say they were right on because those homes are now lower then the offer they would not counter, and still sitting. That is hard to do if you find a home that fits your needs. This is a great time to be in the market to purchase a home and I wish you the best of luck. I hope you have a very Merry Christmas:)
Nancy

Nancy Doyle http://www.nancydrealtor.net

Dear Winston,
Honestly their is no magic formula that anyone has. You could get stats from the MLS but like most information that can be seriously flawed. The reasons that it is seriously flawed are numerous, but I will give you a few ; 1) unless the listing(s) state what the owners motivation is you can't get a fix on a so called low price without insulting the seller. 2) You don't treat all properties like a short sale or foreclosure atititude or then it will be a waste of time for you and your realtor. 3) By looking up the mortgage amounts,the local assessor value on the property you can get a pretty idea if the listing price is in line or not. 4) that brings up the next issue of the realtor's/sellers listing price whether it is in line or not. If it is not realistic than you can give your low ball bid,but if the listing price is in line than it is more than likely under normal circumstances that it will be a waste of time . I get this question even on short sales, every lender/bank has different guildlines that they go by. So any answer you with a per centage off more than 5-10 % I would ask them for the proof. Basicly in a normal situation it is safe to say 5-10% only if the property is priced correctly.
I have been a realtor for 22 years and have never seen a market like this , all of the stats you can throw out the window in this market. You can't use reason or logic like you used to in order to understand listing or selling value. All of the Chief economist have been wrong and the market will follow its own course of events.
I hope this helped you with your question
Sincerely yours,
Don Yosef Marcus GRI,ABR,SRS,CCREC
CENTURY 21 MB
Chicago & Suburbs
847-361-7770
DonYo770@aol.com