terms of pricing, the best way to decide the offer is to go with the current listings - have your realtor work up a CMA with current listings and solds in the last 3 mos. Lean more heavily on the listings, particularly if they have just recently come on the market. Your realtor will be able to tell you where things have sold off the listing price - 90%? 88%? . I would then work up an offer from there using averages. If nothing has sold in 3 months, then I would expand to 5-6 months, and reduce 3% since this market has been declining 1.0-1.05% a month for the past few months.
Good luck ! But I would not "lowball" for the sake of the activity. Try putting an offer that reflects to the seller that you have "thought" about it - and given consideration to the seller, based on recent market activity.
Also if you can find other issues about the house. For example a new road or subdivision being built in the neighborhood, a school closing or opening . You do not need to share positive news but near by property being chosen for the new waste land fill may be important to know.
Also a mistake I have seen on some of my listings an offer that is too low may keep you from getting the home you really want and the one that would be your best buy.
Being piggie for either side often does not generally lead to a great outcome.
I belive there are not good market or bad markets just individual good values and poor buys.
Choices that are quality homes have a better chance of weathering the fnancial storms.
Statistically offers that are lower than 10% off asking price have very slim chances of being accepted. Check out this blog post on the numbers: http://www.territoryre.com/blog/?p=459
Also get yourself a good buyers agent - it makes a huge difference when it's time for negotiating.
Hope that helps! Good luck.
The best way to make an offer is to make an informed offer by taking the time to gather necessary information. Ask your agent to provide for you the comps of recently sold homes (last 6 months) in the area of the subject home.
A review of this information should give you and understanding of what the current market value of the property is.There is no "acceptable offer" but the last thing you want to do is offend the seller with your offer....there will be NO response and the door will be closed.
Our recommendation is to use the information that you have collected on the area's recent sales to justify why your offer is what it is. Also to soften the blow, we suggest a pre-approval letter with the amount specified from your lender be submitted with your offer. Sometimes sellers will accept this as the amount you can afford to offer.
Most people derive a lot of pride and self worth in the ownership of their home. This emotional aspect is critical to how well your offer will be received if the seller is not under overwhelming financial duress to sell.
With the price corrections to many real estate markets around the country and daily reports of this all over the media, buyers are no longer self conscious about submitting a less than asking price offer, particularly on a property that has been in the MLS for a lengthy amount of time. However,unconsciously, many homeowners will interpret such low offers as a valuation of their time and experiences in the property.
I concur with Mark...make a market based offer and you are apt to get the best out of the seller...anger them, and it will negatively color how they deal with you for the entire transaction.
I have sold ten's of millions of dollars of Cape Cod Real estate over the years...I have never seen a truly "low ball offer " work for anybody...Most sellers now expect that they will get less than asking, but are not prepared to give away their properties on the Cape. Money is cheap, albeit more difficult to borrow right now...paying 10% more than you wish to right now might be the most prudent move.
An offer should be based on a current CMA (market analysis). Are you presently working with a Realtor? If so, they can provide one to you. My feeling is that you are more likely to get your price by making a reasonable first offer than to lowball. Eg. (80-85% of current market based on a reliable CMA) then baby step it from there. I relate it to the situation where if I push you hard, you push me hard back. If I extend my hand, you are very likely to shake it. Don't be a fraid to walk away for a few days if things are not going your way. They will return to you.