You have to look at properties on an individual basis. What is heard on the nightly news and posted in national papers & magazines does not ring true for all markets. Some local areas have maintained their values while others have dropped 20% or more and there are markets nationally which have lost 50% of their values where foreclosures make up more than 70% of the market--fortunately that hasn't happened locally. Another thing to consider is that because some values have dropped drastically, some agents and sellers have taken that into account in their pricing (while others have not). It becomes an issue of lets compare apples to apples. Your agent should sit down with you, look at the comparable homes which have sold locally and then either discount or increase an offer price based on those other sales. Hopefully what happened when the listing agent listed the property was that they did the same thing and the price the listing agent and your agent should come up with are very close. That's not to say there aren't overpriced listings in the market right now (roughly 80%) it just means a blanket question of do you feel offering 15% below asking is a gray area. There are several other factors to consider when coming up with an offering price which I share with my clients, but I think this gives you a better understanding of what would be considered a reasonable offer vs possibly alienating a seller.
Joshua Matthews, Licensed Realtor in NH & ME
Director, Strafford County Board of Realtors
Keller Williams Coastal Realty
501 Islington St #2, Portsmouth NH 03801
(603) 781-4030 Cell
You ask "What price would you propose if you were going to place an offer on this property? 15% below asking?"
I am getting the feeling that you don't have a "Buyer Agent" to discuss this with. That would be a good start, find an agent you trust and ask him or her that same question. I have been in the real estate business for 20+ years and every deal is different, every motivation is different (buyer and seller), and so I don't think you are asking what is the right price, but rather what is the lowest price I might think would be acceptable to the seller...
So, again, I am unaware of the sellers motivation. But I know the selling agent to be a good Realtor, meaning that the house is probably priced to sell. All that being said, properties are not selling quickly in this market. What helps them sell is a low price.
So you need to ask yourself, how high would you go for this one? Then determine the difference between the asking price and your top dollar. Subtract that amount from your top dollar, round it off and start there. So if you are willing to go to $750K, and can show financing ready to go, then do this: Take their asking $825, subtract your $750 (top dollar) and you get $75K. Then subtract $75K from your top dollar, getting $675. Offer $675 as is, quick close, no contingencies except financing which is already in place. When they counter, increase your offer, and add in your contingencies (home inspection, oil in tank conveys, maybe a house still to sell etc...) You may go back and forth a couple of times, each time splitting the difference, until you both arrive at $750K. You are not wasting the sellers time if you are genuinely anxious to buy the house. Just don't kick tires in this market, you will quickly become persona non grata.
Also keep in mind that this is a luxury home; luxury home values haven't declined as much or as fast as the low to mid range home values--outside of CA, FL, AZ, and NV--at least in many of the markets that I actively track. However, there are some indications that this might change relatively soon--the operative word is "relatively".
Do (or order) a CMA, and get an inspection/appraisal to determine the current market value of the property. Regardless of the value for which this house has been assessed, 15% might not be enough of a deduction if the property has various issues (ie a bad foundation, environmental issues, water damage, bad plumbing, bad/outdated wiring, etc).
Also keep in mind that many luxury home sellers feel they can wait out this storm, so don't be surprised if you get bad or no feedback as a result of having made that offer. Nevertheless, if you've determined that's the offer you'd like to make, then go for it and present your offer.