It really depends on the house and the comparable sales surrounding it. Below are the stats that LA Times just posted on their website for Pasadena. For each zip, they list the number of homes that sold in the month of November (December is not updated yet) and the average price per square foot for that zip.
I would also look at the months of inventory on hand for the area. This will help position your offer correctly.
Pasadena 91101 2 $235
Pasadena 91103 10 $456
Pasadena 91104 11 $427
Pasadena 91105 6 $529
Pasadena 91106 5 $545
Pasadena 91107 21 $523
If you need any additional help, please do not hesitate to contact me. Good luck in your home search!
This post is exactly why you need professional representation. If you do not have a Realtor to represent you, then pick one from this list ( I like Irina, but you use your judgement).
Your plan is to offer below market because you see homes reducing their price. A great Realtor will have an indepth discussion with you regarding the market trends so you will understand the market dynamics.
Here is the desktop version:
All listings are not over-priced. Approximately 20% of listings are priced right, prepared for sale correctly, and marketed in a way that shows their value. These listings will sell within 30 days at close to asking price. In the general area listings that sell in the first 30 days sell at 100% of asking price. The longer a listing is on the market , the lower the sale price. right now it is 94%. That means, on average, a home on the market at 120 days sells for 6% LESS than the posted price.
So you need a market expert that can help you identify the over-priced homes versus good deals. The other issue is the only about 20% of homes on the market are really GREAT. The reason that a home is termed "overpriced" is because if it's value. Usually that value includes the condition of the property. So right now in Pasadena there are 550 plus homes on the market. Out of those homes are fewer than 100 that are really great, and of those homes that are by the Rose Bowl there are probably 10-15, maybe less.
A buyer with a sharp Realtor will move on a good deal immediately, leaving the remainder for buyers like you. Now, you can try to convince sellers of homes that they over-priced by 20%. Put yourself in the shoes of the seller...how would YOU react to an offer that is 20% BELOW the comps?
Best of luck to you.
Both of the agents that have already responded have offered sage advice. I will add that when I present an offer for my clients, especially if the offer is lower than the list price, I also include the information my clients used to arrive at the offering price. Another thing that I do is check to see the history of that listing including days on the market, whether it was pending at any point and fell out of escrow and any other changes that have affected the listing. I also look to see if the property was listed before and what happened - was it the listing for the previous sale or did it expire. All of this information can help me to help my clients arrive at an appropriate offer that could be accepted. It is also a good idea to look at the financial history of the property (leins, loans, etc.) to see how low the seller's appear to be able to go.
An offer 20% below the list price without anything to support it, even if it is a truly market appropriate offer... actually, especially if it is a market appropriate offer is still a bitter pill for the seller to swallow.
Also, another thing that can be used to try to make your offer more compelling for the seller is your strength as a buyer. If you have good to excellent credit, are in the position to offer a larger deposit, better terms, a higher cash to loan value and have a loan not just prequalified but truly preapproved, all these factors can work in your favor.
And never discount the value of having an agent who is nice to work with not just for you but also for the sellers rep. as well. A nice, friendly, easy to work with agent won't guarantee that your offer will be accepted but they can go a long way toward helping make that so.
If you are not already represented, I would be happy to help you with this transaction or any other. Please feel free to get in touch either through my email (Tisza at HomesByTisza.com) or by phone (909) 837-8922.
Take care and have a wonderful day!
Tisza Major-Posner, Realtor, Keller Williams
As an agent that lives in and loves Pasadena, I'd encourage you to look at things a bit differently. If you find a home that you really want to live in, then have your agent (and of course I'd be happy to represent you, professionally and with your best interests in mind) find out the motivation level of the seller. Based upon that, offer the price that you are able and comfortable paying; in other words, 20% may work if the seller is motivated, or it may not - but if you love the home, focus more on the achievable price (what the seller may agree to) and whether you think it is worth paying (again, your agent can help here, factoring in the details of the home.) Some sellers are not realistic and it is not worth wasting your time with them. Others are, and you may be able to negotiate 20% from their current listing price, especially if they have not reduced their price and are considering it.
Also, if the home is gorgeous, remember that you are looking at a very desirable area and that while the price may be less than a year ago, it may still not be much less - which is a good thing after you become the owner, and no doubt part of the reason you decided to look in the area to begin with.
I hope this is helpful, and again, I'd be happy to meet for a more detailed consultation, including discussing specific listings with you.
Sotheby's International Realty
I'll show you how to do it
see all Pasadena listings below