You say Rockland County is a declining area, did you mean declining market? Yes, our prices are declining but the area remains stable. Like our neighbors to the east and south, Westchester and Bergen County (NJ) we have felt the effects of the market but our proximity to NYC keeps us in demand. To be precise, the first quarter of '08 showed a 36% decline in the number of homes sold with a 3.6% average price decline and 4.6% median price decline. As a buyer, it is very important that your agent provide you with a Comparative Market Analysis on any home you have an interest in PRIOR to making an offer. These "comps" should be no more than 3 mos. old, 6 if there have been no recent transactions in the area. They should represent at least 3 closed transactions. "Under contract" transactions should also be taken into account with the understanding that they probably sold with 10% of the asking price. Most importantly, make an offer. Remain open minded. Know your financial limitations. Have a good rapport with your loan officer. Appraisors have become very tough. There is a lesser likelihood of overpayment. Most importantly, be easy with all of this. Don't over-analyse. Find an agent you feel comfortable working with and in whom you develop trust.
This has come up several times today - but i'll say it again. Sellers base prices on what they owe, and what they'd like to get out of it. It has virtually zero reflection of true market value.
As has been said - if you're using an agent - that agent should be able to help you determine the market value based on comparible properties and recent sales. That's what you want to use as a starting point for figuring out offer.
Let me give you an example:
The home is listed at $485,000.
You work with your agent, and determine the market value to be say $425,000.
If you take 7.7% off the asking price - your offer would be $447,655.
Well if the house is only really worth 425 - why in the heck would you offer 447?!?! :)
The point i'm trying to make is that you either need to work with somebody who can walk through these kinds of things, or at the very least spend some time researching and learning how to do them yourself.
It is impossible to just say "take X% off the list price...".
Every property is different, every property is priced different, every market is different. Each case has to be looked at closely.
Each and every house is different, I can give you many examples of homes here in Rockland that sell for close to asking price or even above asking price. I can also show you homes that have been for sale for nearly 2 years that have sold for $120,000 less than the original asking price , each home has it's own market value.
Rockland has been cited as a declining area by lenders along with most other counties outside of NYC, what this means is a house that might appraise at $525,000 the bank may only lend on 80% loan-to-value on $500,000. In short they may knock the appraisal down $25,000 to assume less risk, if there is a house you really like and a seller who won't budge on price there could potentially never be a deal because the lender will not provide financing unless the buyer comes up with a higher down payment.
Each opportunity is unique, the best way to approach it is to stick to your budget and find a home that works for you within that budget. If you told me your budget was $475,000 I would show you homes up to $525,000 with the realization that some of those homes will be worth the asking price, but most of them will not be, it depends on the house!