Some sellers have dramatically overpriced their homes, some have priced them reasonably, and some have priced them at fire-sale-bargain-basement pricing. The key to knowing what to bid, is knowing your local market. Know what comparable homes are selling for, and have sold for (very recently). Be objective about which homes are TRULY comparable. (ie: don't use the house two doors down, that has 2 extra bedrooms, a spanking-brand new Viking kitchen, and an olympic sized swimming pool)
There is no rule. Ask your Realtor to do comps for you on the house and neighborhood, any upgrades and condition of the home and determine how long it has been on the maket. From that you will determine if the price is accurate and get an idea where to price the offer at. Good luck.
1. Active listings - these are the current competition that have not sold. How long have they been on the market without an offer? Any price reductions?
Walk through these houses. How does yours compare in price vs. condition?
2. Sale Pendings - these are the houses that have accepted offers and are waiting to close. Their list price and condition was good enough to bring in an offer. How does your house compare?
3. Sold/Closed homes within the last 3 months - Look at the list price vs. sales price. How close were they? How does your house compare in price vs. condition?
You will know whether the house you want to buy is over priced, accurately priced or under priced (already a good deal). These are the same statistics an appraiser will use when determining market value. If you are still unsure, ask your Realtor to include a protective clause in your contract to ensure you're not obligated to pay more than the appraised value for the home.
Prudential Jack White Vista
The current stats indicate about a 5% reduction on sales that have longer market time. If an owner prices his home to high, sometimes he will get less. A good clean home that is attractively priced will sell for its asking price. If you watch the market and look at a few homes, you should get a good feel for what is a good deal.
But remember this, the seller may really need to get X dollars for their home, and in this situation you may offer less because that is what you feel, and your Realtor, feel is a fair price. But there will be know deal. This is the unfortunate side of inflation and our market.
Good luck in your search.
Eric Bushnell, Associate Broker
Prudential Jack White/Vista Real Esate Eagle River