The buyer chooses a realtor to advise you not command or dictate what you offer on the home. If you want to try for a lower number, against the advice of your realtor, just explain your thoughts to your realtor. What is the risk? The seller will counter your offer with another number. It is not likely that a seller will outright reject your offer and never allow for the counter-offer process to take it's course. Just remind your realtor in a in a respectful way that you would like him or her to negotiate the very best offer for you even if you choose to start lower that they suggest.
If your offer gets accepted you have other protective mechanisms in place (I assume). 1) The mortgage contingency and 2) Home inspection/termite/radon... If the bank appraises the property and your purchase price is too high, then you are protected. You will not have to pay the inflated price and you may have an opportunity to adjust that price down! I assume you will elect inspection contingencies which will allow you to negotiate repairs, credits for repairs or any combination there of.
Ultimately, the decision is yours. Rely on your realtor to be your advocate in negotiating the best sale price for you. Ask your realtor to support his or her recommendation if you think his starting bid is too high for you. Once the offer is proposed and submitted in writing it is in the seller and seller's agent's hands. They are going to be looking at the same comparable sales that you are. Your realtor can ask the seller's agent to substantiate their asking price or counter offer.
I hope this info was not confusing. It is a complex question and a good one to ask. I wish you the best and hope you get this property at a great price.
be happy to "entertain" an offer of $160K on a $175K house. (They may counter it, but it would be hard
to imagine them just throwing it away).
Not being familiar with Pennsylvania Real Estate Agency Laws:
When you say, "My Realtor", do you mean that the Realtor is representing you in some sort of an agency capacity?
Do you have a signed Buyer Brokerage Agreement or some other Contract that indicates that this Realtor is looking out for Your Interests?
Are you under written agreement to deal only with this Real Estate Agent?
Are you obligated as a Buyer to pay a Commission or Fee to this Real Estate Agent,
regardless of what property you buy, or who you buy it from?
Or is this just the Real Estate Agent that has been showing you properties?
(I am not dissing Transaction Brokers; that is how most of us work in Florida,
but when a person says, "My Realtor",
it usually implies Single Agency Relationship)
Best wishes to you,
Determining a price on any property buying or selling can be very subjective. With my clients I simply give them the facts and allow them the opportunity to make the final decision, based on their comfort level. Don't be afraid of insulting the seller, if they want to sell their home they will counter. If they don't, no one says you can't put in a new (higher) offer later.
Don't let you agents desire to put together a sale compromise your personal needs.
It sometimes helps to have a backup plan that involves other homes from the area that you would consider if this one doesn't work out. It doesn't hurt to let the listing agent know there are "other fish in the sea."
If the home is multiple listed "dropping the realtor" and dealing directly with the seller isn't an option.
I assume if you have time to discuss this situation with others, and ask this question here, there are no other offers currently being negotiated on the house. That being said, I see no problem with you offering 160,000 , as it's not that far off from the 175,000 list price, and only 5,000 away from what your agent suggested. - the worst that will happen is that the seller won't give you a counter offer - in this market, that would be foolish, and make no sense. If, however, they do reject your offer without giving a counter, you can always come up if you choose to do so.
Your agent might very well be giving you correct advice, I can't say, but YOU have to be comfortable with what you do.
Tell the agent to make the offer of 160,000........
Good luck - Hope you get it!
It sounds like you are really on top of your situation. And I suspect that you already know the answer and are just looking for a little validation.
An initial offer of 160K won't "be an insult" - don't worry about that. Especially if you are financing 20% - then you are a serious buyer.
What are the recent Sold comps for comparable properties?
I'm at least slightly concerned that your realtor is trying to push you toward a "strong initial offer". In this market, why do so? Unless the house has significant upgrades to its comps, etc - there would be no reason at all to do so.