Home Selling in Wellesley>Question Details

OM, Other/Just Looking in 02115

Do sellers entertain offer that is 20% below their listing price (for properties value over 1million dollors)?

Asked by OM, 02115 Sun Aug 24, 2008

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7
Voices Member’s answer
I have to ask if you are willing to pay so much anyways than, why is 20% so important? If you are buying in Wellesley the odds are the house is priced right, since that is a very desirable area.
And further if you do insist that the house should be valued at 20% less than you should back it up with some good reasons and data.
0 votes Thank Flag Link Tue Aug 26, 2008
It's a good question, with a complicated answer. Let's talk housing market performance first. Every town has its own micromarket: What's up or down in Weston isn't necessarily what's happening in Wellesley which isn't necessarily what's happening in Needham, etc., etc. We can be talking wide number spreads from town to town. Town X may be down by 10% this year while Town Y showed appreciation of 8%. Now to further confuse you, price 'softness' varies from price band to price band within each town. E.g., Wellesley numbers were flat for houses priced below $1M, while appreciation occurred in price ranges from $1M-3M However, at the very upper end of the market, they dipped measurably. All that said, if you accurately perceive that the house is overpriced by 20%, it's unlikely that a seller will let a house go that low until they have tested the market in a downwardly 'sticky' method - e.g., price reducing until they're priced right, at which time they'll probably see 90% or maybe less of the 'right' price. If they were priced 'right' (as defined by the buying public) to begin with, they would have probably seen 95% or more very quickly. While you have nothing to lose by putting in a low bid, (listing brokers actually like low offers, because they understand they condition the seller to respond more favorably on any other offer that comes in even slightly higher), it's unlikely that the seller will respond favorably with a well-considered counter. A very low bid often prompts a seller to respond back with a very very small counter offer or even nothing at all, resolute in the conviction that your offer is a 'non-starter'. All this doesn't mean that your price is incorrect - it merely means that the seller is not YET ready to go there. Telling the listing broker that you'd be seriously interested when the seller is ready to consider such an offer is also an option. A last note, a Buyer's Agent cannot help you get a 'steal' - they can only help you make a more informed decision. I probably confused you more than helped - I apologize if so! best & good luck, Elaine
0 votes Thank Flag Link Mon Aug 25, 2008
absolutely, if overpriced ... It also depends on how many days the property has been on the market. Often sellers won't bend on price if the property has only been the market for less than 20 days even if you can prove with sold comp's your offer is good. One other thing, sellers in a higher price bracket tend to be in a better financial position to wait out for the price they want so if your price is considered a "low ball" to them they may just reject it and not negotiate.

All that said, no reason you can't give it a try just good to keep your expectations managed.
0 votes Thank Flag Link Sun Aug 24, 2008
OM
If you are serious about buying a home then you will need to pay market price (or someone else will buy it for market price). So if you see a listing and you and your REaltor do your homework and can prove that it is in fact over-priced, go ahead and submit the offer.

In most cases it is unusual to have a home mis-priced by that much.
0 votes Thank Flag Link Sun Aug 24, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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It depends, if you really think the property is overpriced or if you are are banking on getting a steal because of the market. Seller Motivation is a huge variable as well. . Earl has it right. Do your homework or have a Realtor do it for you and go in at a price that you are comfortable with. That's the only way to truly find out where the seller stands.
0 votes Thank Flag Link Sun Aug 24, 2008
Hi OM,

In real estate, every transaction is unique. There are many variables that determine how much to offer vs. how much the seller will accept. If you have concrete statistics that demonstrate why you are justified in offering 20% below asking, go for it. A good Buyer Agent (who represents YOU and your best interest...i.e. negotiating on your behalf for the best price and terms) will assist you in determining what is a reasonable offer. Of course, only the sellers and their agent knows what their bottom line is...so all the information you present may be useless....you never know unless you try!!! Let me know if you'd like some help! Good luck! Judy
0 votes Thank Flag Link Sun Aug 24, 2008
Buying real estate is a business transaction, thus you should make an offer that you consider is commensurate with how you value the property. Do not be afraid that you will hurt someone's feelings with an offer - your offer may be more realistic than the seller's asking price and result in a contract. Get the dialog started........
0 votes Thank Flag Link Sun Aug 24, 2008
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