Home Buying in 68818>Question Details

Miotkefamily, Home Buyer in 68818

When making an offer on a house, is there an appropriate range/percentage to stay within in order to have your offer be taken seriously?

Asked by Miotkefamily, 68818 Mon May 16, 2011

On an asking price of $159,9k would an offer of $140k be too low? What should be the beginning offer in the process of negotiation?

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You've spent how much time looking at homes? You've looked at how many homes? You finally find "the one," and you want to risk offending the seller by just throwing a number up in the air and seeing where it lands?
Any offer I submit is always accompanied with comps. It's my way of saying "Here's what's sold, here's what the appraiser is going to base what your home is worth when he/she comes out and does their homework."
Base your offer on what is fair market value. You're buying a house, not a pair of shoes on clearance or a fridge from the Scratch and Dent department.
0 votes Thank Flag Link Mon May 16, 2011

Ask your agent to do a compables search for area. See if home is under or overpriced. Make offer based on what you can afoord and value of home.

Good luck,

0 votes Thank Flag Link Mon May 16, 2011
If you dont ask you will never know. Make all and any offer. I have seen low offers go through. But do realize, a really low offer could affend the seller and then in turn not do business with you. You would have more luck with offering close to what market value is or near the asking price. Also, talk to your agent. You agent is skilled in negotiating.
0 votes Thank Flag Link Mon May 16, 2011

I think you can see from our answers that it's not a percentage issue....it's a value issue. On a short sale or bank-owned home, for instance, it might be listed artificially low to attract buyers and for you to be considered you will need to bid OVER asking price....there is no magic formula.

Talk to your agent and look at the actual comps for the home, then decide what you want to offer. Some things to remember....if you really WANT the house, then don't gamble with a lowball offer. But if it's just a home that "would work" then feel free to try a lower price...and it's still only worth what it's worth to YOU.

Good luck with the offer,

0 votes Thank Flag Link Mon May 16, 2011

If you want your offer to be taken seriously, make an offer consistent with the true market value of the property.
Web Reference: http://www.golftobeach.com
0 votes Thank Flag Link Mon May 16, 2011
As the others say, never use a percentage of listing price to base your offer on. The reason: You have no idea whether the listing price is reasonable or not. You absolutely need your agent to get you the comps. Then pay no more than what the comps suggest.

What if the house you're looking at is only worth $137,000? You offer $140,000. The owner accepts. You've overpaid.

What if the house is worth $175,000? It's a bargain at $159,900. You might get it for less, but don't be greedy. I remember a foreclosure I was showing to some clients. The comps suggested it was worth $210,000. It was a nice house in move-in condition. It was listed at $185,000. They loved the house. They really wanted it. But they were convinced that they had to negotiate down the price. They wanted to offer $165,000. I managed to persuade them to offer $175,000. And it was a weak offer--contingent on financing and other items. They lost the house. The successful bid was $205,000 all cash.

Recognize, too, that you can't read the seller's mind. I've seen sellers who wouldn't budge a dime. They already felt they "were giving their house away" and wouldn't negotiate at all. I've seen other sellers accept 20%, 30%, and more under what they were initially asking.

So, let's agree, first, that you'll pay no more than the house is worth. And you can only tell that from the comps your agent provides you.

Second, to have your offer taken seriously, make it as "clean" and strong as possible. As cash offer is usually stronger than one contingent on financing. An offer that isn't contingent on the buyer selling his/her current home is stronger than one with that contingency. An offer with a solid earnest money deposit (it varies around the country--in some areas it might be $2,000, in other areas maybe 2% or 3% of the asking price) is a lot stronger than one with a $100 earnest money deposit. An offer with an accompanying preapproval (of financing) is a lot stronger than one without. And so on. Your Realtor can advise you on how to make your offer as strong as possible and, thus, more likely to be taken seriously.

Hope that helps.
0 votes Thank Flag Link Mon May 16, 2011
Don Tepper, Real Estate Pro in Burke, VA
Do not base your offer on the asking price of the home. Is the home priced realistically? How long has it been on the market? I can help you find sold comparables. If you're not working with a realtor, please call me. I would love to help you.
Jan Nicola
0 votes Thank Flag Link Mon May 16, 2011
Hi Miotkefamily,

For your offer to be taken seriously, you have to offer as close to the actual market value of the house as possible. To do this, have your Realtor do a Comparative Market Analysis (CMA) to determine the market value of the property. The listing price of the property may not necessarily be the market value of the property. The property may be listed below market value to generate offers and create a 'bidding war' or the property may be listed higher than market value. You want to submit an offer that is realistic for both yourself and the seller. Price is the 'main' factor in an offer but it is just the starting point. Other factors include the amount of your ernest money deposit, the type of financing you are doing, are you asking for closing costs, etc.

Hope this helps and good luck.

Shanna Rogers
SR Realty
0 votes Thank Flag Link Mon May 16, 2011
Ask your agent for recent comparable sales; and then make an offer which you would consider to be a serious offer if it were your home.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Mon May 16, 2011
A lot depends on the market and how long the house has been siting. If the house came on the market two days ago, then you probably need to be a little closer to asking price. If the house has been at that price for several months, then it makes more sense to go in lower.

Keep in mind that there is more to an offer than just the price. If you are offering lower, then it is better to put a big earnest money deposit down and to have a strong approval letter. In your case, an offer at $140k may not be vary appealing to the seller, but if you combined this with a $20k earnest money deposit, they will know that you are serious.
0 votes Thank Flag Link Mon May 16, 2011
NEVER use a percentage formula to make an offer, you need to assess what the house is worth in todays market and base your offer on that, you do not knwo if that house is already priced at market value, priced below market value already or priced way aboove market value.

An offer can be made more serious by including a preapproval letter, larger deposit, quick closing date and limit contingincies.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon May 16, 2011
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