Before you look at anymore houses, I would suggest that you forget what you know about how to buy a home and begin to understand value instead. It will become clear very quickly that you may find that a home that sells for 100% of the asking price that is a better "deal" than the one that sold down the street for 10% below asking price.
What you are trying to do is not the right way to approach buying real estate becuase you are not looking at value. What you are doing is allowing an egocentric idea like "I got a deal because I paid 12% below asking price" to lead your logic instead of actually determining what the right price for the home is.
And oh, by the way, it is not based on the asking price! You are far less likely to get the bargain you seek searching the way that you are.
That's a great question. There are so many variables when making a first offer and negotiatiing a contract. It really depends on the original list price, how motivated the seller is, how long it has been on the market, location, surrounding area (if it is transitional or established), but most of all, how does the price stand up to comparable homes that are for sale and recent homes sold (in the immediate area)?
I feel that each offer is unique and there is no set amount below the asking price that is appropriate for a first offer. For example, if two homes in similar condition, finishing, and proximity are equally appealing to you and they are priced $40,000 different, it is difficult to place a percentage on the offer price. Seller's circumstances may cause varying list prices and therefore some sellers list a home to sell quickly. Data regarding the comparable homes sold will support the offer price you choose.
A good buyer's representative is able to assist in finding the home you are looking for...it may not be a specific percentage off of the list price, but still can be a great deal.
The market has definitely changed and most sellers are willing to look at a broad range of offers. It is the right time to look for a bargain on a home.
I hope this helps!
It's important not to get caught up in percentages off the LISTING price. You may find a home substantially under valued but miss out on it because of your desire to get a % off.
Also consider the scenario of ONLY asking for 15% off when a home is priced 20% over market. You'd have overpaid by at least 5%.
Percentages are a great way to make sure you are being unemotional, but do it from the true market value, not the listing price.
No offense, but, it's not always that easy...that's why I say I can't offer a REAL answer. I don't know the specific houses he is talking about.
"I also like Ryan's answer but prices are trending downward across the country"
They are 2% higher in Sandy Springs than they were 1 year ago and they are still trending up. Sales are down, prices are up. Good houses are selling as fast as they come on the market for at or near full price here and that's what happens in a buyers market. Good houses go FAST.
Real estate is too local to make these generalizations. You need specifics and specifics to your market.
"This is a bad time to be a seller but sellers had a great time 2000 to 2005 and I think the value of their house appreciated far more than 20% in that time period so all they're giving up is some of their profit."
Maybe, maybe not.
I for one could never give you my professional opinion with the information that I know at this time.
Let's say about 5-7 comparable houses were sold in 2007 between a range of ($530k - $590k), but nothing has happened in 2008 and several similar houses have been listed at around $550k for say, 3 months now. Would a first offer of $470k be reasonable?
As others have stated you can approach buying a house at a flat rate discount %.
Agents like myself are encouraging sellers to price their homes aggressive in order to sell quickly. You could miss out on a great deal by insulting a seller who already has thier home priced well.
If you are looking for great deals and want to negotiate contact me about corporate owned relocation properties. These homes are purchased by the relocation company when an employee has to relocate due to a job. These homes are abundant, priced well, and the corporation is eager to negotiate to get the home sold.
If you are interested in working with me I can pick out these properties for you and help you negotiate a great deal.
ERA Sunrise Realty
Recognize, too, that seller motivation will have a big impact on your ability to get a bargain. If someone bought a new home before selling their current one, and they're now paying two mortgages, their motivation may be high and they may be more willling to discount. Someone who has to relocate due to a job transfer may be more motivated. And the list goes on. Look for true value. Then look for motivated sellers.
Hope that helps.
It's never just about price.
And right now, this Spring, sometimes it is about competition. The good ones are going quick and at discounts. The 10% of Sellers who "get it" - price, terms and TIME - will not blink at a 15% off offer.
The Sellers who really get it are getting multiple offers, so your 15% off will look really cute to them. Govern yourself accordingly.
You will find a bargain - make lots of offers.
What neighborhoods do you like?