You said the properties need work. The need for for work is not the determining factor for price. There can be two properties, one priced at 400K and the other priced at 900K, and both can need 100K of work..yet, there is a wide spread in value between these two properties.
It is the exception, not the rule, that a seller will sign an acknowledgement of presentation of an offer. A buyer or buyer agent may request this, but the seller is not obligated to provide it. Most sellers will, upon request. Most listing agents will, upon request.
Depending upon the price point, a 20K-30K spread may not be that much in todayâ€™s market. However, in specific cases, where a property has been aggressively priced for a quick sale, a property can still sell for over asking price.
The following are recent examples:
Represented the seller: Price low, aggressively marketed - Received multiple offers over list price.
Represented the buyer: Buyer wanted to go in under asking. Advised buyer that the property was priced substantially under market, and would most likely receive multiple offers and sell for over list. Buyer was provided a second oppty for final and best. All buyers put forth their final offer. Buyer offered asking price. Buyer lost the property to another buyer and it went over list.
Represented the buyer: Offer made, seller rejected after counters and negotiations. Property is still on the market and reduced to a price within close range of the buyerâ€™s offer. I stood by my buyer and supported the decision to walk away.
Bottom line: My advice depends upon the specific property.
Make sure the advice you receive is tailored to the comps and that specific property. There is no rule of thumb. Many properties will go to contract at sale prices 20K, 30K, 50K under the asking price. There will also be properties that will sell for over list. Each property must be looked at individually.
Your agent should be giving you sound reasoning why he/she thinks a price is too low. Don't base an offer price on the seller's ask. Instead, base it on the value as represented by recent comps, competition and market activity. When that data supports a price offering 50K below, proceed accordingly. And, likewise, don't be afraid to pay overlist.....it might be one of the best deals out there.
Incorporating a sound pricing analysis will greatly help your efforts. First off it will immediately flush out overpriced homes and also identify good values. It is a great tool to bring to the bargaining table - I reiterate my earlier point, an offer that can be sustantiated is compelling. I find that offers that simply appear to be low balls based on just a hunch cause are more apt to cause ill will than get a dialogue going.
Perhaps the agent's hesitancy reflects his/her uneasiness because the offer is tough to justify. As you formulate your pricing strategies, listen to your agent's opinion - he/she is working for you and their goal and yours is one and the same - to successfully close on a home. They will not make a penny if you don't succeed.
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