HAVE AN OUTSTANDING DAY!
Good question. It really just depends on so many factors. Is this the worst home you've seen or the best. Do you think it is priced right to start? If you've look at 100 houses and this is the best and the price seems about right, you may have some stiff competition who will bid list. If the home has been on the market a year and is one of the worst, then 15-20% under market might be the right place to go. I think it also depends on the price range you are in. At the lower end of the market, many people probably won't have the much room to move. At the higher end sometimes there is lots of flexibility and a wide variety of opinions on what a particular home is worth. The one thing I always ask buyers is what would you think as the seller? When you are ready to sell this home will an offer 15% less than asking work for you? Your circumstances could be different, but it is an interesting exercise.
BTW- I did $1.2 mil in 20% below asking price last month. One of the respondents below, Paul and I went through probably 50-60 homes and 10+ offers to get 3 deals.
- House #1 is listed for $200k. With a market analysis we believe it is easily worth $210k - $220k. This house may warrant a strong or possibly full price offer ASAP.
- House #2 is listed for $200k. With a market analysis we don't think it's worth a dime over $185k ... this house is a candidate for a low ball offer or walking away.
It is important to look at as many aspects of the subject property as possible; including activity in the neighborhood, time on the market, reasons for selling (some listing agents will actually come right out and divulge this), price range in which the property falls into, amount owed on the property (at least what you can assume from the tax records), condition of the property, etc.
In short, I think it's reasonable if the situation dictates it. Another school of thought that some agents and buyers are subscribing to is to make the offer and see how the seller responds. If you have no reason to suspect that another offer is in the making, then it may be worthwhile to use that approach - with appropriate justification for the offer, of course. The seller could accept your offer, counter, or refuse it altogether (most skilled listing agents would recommend they counter if the offer is unacceptable).
Danny Gallant, Realtor
The Gallant Group @ Keller Williams Realty
San Juanita Schafer, e-PRO, GRI
KELLER WILLIAMS REALTY