Forget the nonsense about basing your offer on whatever the list price of the house is. And it is nonsense. Some houses are overpriced; some are underpriced. Some need repairs; some don't. Averages are fine if you're buying 500 houses; hundreds (or thousands) of house sales are averaged to produce your magic 3%. But, unless I'm wrong, you plan on buying one house. Not 500. So what you want to do is find a house that fits your needs and is a good value at or below your $350,000 budget. And that might be a house priced under market at $280,000, and would be a great value at that figure. Or it could be a property priced at $400,000, in which the agent may have painted a too-rosy picture to the sellers...and the sellers now are willing to get out for what they owe.
Also watch out for the hidden "seller subsidy" in many sales. There's nothing wrong or illegal about it; most loan programs permit it. But, for instance, a house might "sell" for $300,000, but the seller might credit the buyer with a $9,000 seller subsidy (to be used for down payment, closing costs, etc.) Thus, as a practical matter, the house actually sold (that is, net to sellers) for $291,000...even though the official records show $300,000. That's one reason why, even in this very slow market, some houses seem to sell at or even above their list price.
Again, remember: Knowing the averages are fine, but in buying (or selling) a specific house, look at your needs, look at the comps, look at the true value, and leave the averages to statisticians.
However, not all agents are the same. So some will buck this trend and do better.
I recently pulled the stats of my team and calculated our list to sale price of 99.3%. That means if you listed a home for sale with our team, that you would have received on average 99.3% of sale price.
Another stat I was very proud of, it that we sold 83% of all of our listings last year- compare this to the average I found on the general larket of 29%.
It depends on relative asking price. Homes priced closer to their current value and in good condition tend to sell close to or at their asking price. To get a better idea of this, contact a local realtor. Ask them to email you a list of homes within the parameters you're looking that have sold in the past 2 months. They can send you the information that includes list price as well as sold price and date of sale.
Best of luck
This answer could go in many directions but I'm guessing you just want a quick answer for now.
As mentioned, the average was almost 3%. But, that can vary greatly (for a variety of reasons) depending on the specific property that you are looking at. A Real Estate Consultant can help advise you on properties to obtain the home that you want at the best possible price.
Madison is a great place to live and I would look forward to the opportunity to work with you through your move.
Feel free to contact me If you have a question about a specific property. You can check my site, http://www.cbSuccessRealty.com/ross for all homes for sale. Other good resources are http://www.wisconsinhomes.com (public MLS) and http://www.realtor.com.
Based on your budget goal, you should be able to find a great home within your price range.
If you'd like to set up a customized homes for sale search, visit our website.