How much you can negotiate down really depends on how realistic the price is set, the location, the specific house, how many days the house has been on the market and most important thing, the local market condition...., etc.
With everything that's done right, we still see multiple offers in Marin; so there goes the automatically mark down by buyers, sorry!
I think you questions should be 'How can I find an agent who has the time, energy, resource, knowlege, experience and negotiation skills to help me find a great deat in this market' instead of how I can find an agent to negotiate the list price by at least 15%.
If the house is only worth $800K, and listed at $1M because of the seller's unrealistic expectation, even if you negotiate it down to $850K, I think we will all agree that this is not a good deal. .
So, ,find an agent who has experience, great track record, knows the local market, the inventory and with good negotiation skills to see through the house and get you the best deal. Once you made an offer, there are also potentially other things to negotiate, e.g. the repairs, if any, and what not. That negotiation skill, experience and knowledge will come in handy.
Set your priority straight and then you can find the best deal. Best of luck!.
I am sorry to say that you are listening to the media in regards to the prices of homes and the conditions in the market place. Your question implies that any home on the market today can be bought at bargain basement prices.... you are mistaken
Home sales are sluggish in certain areas of the nation and if this is true for your market - that does not necessarily equate to "fire sale".
Homes are sold at the price their individual market will bear. You cannot make a blanket statement on discount and think that it will prevail.... across the board. You will be greatly disappointed AND in the interim leave a trail of angry, insulted sellers in your wake.
It's the banks that are actually affecting sales at this time - funds/loans are not as readily available as in past years - again, that doesn't mean banks aren't loaning money to qualified/low risk applicants.
If you are looking for a home - start at the word: HOME Once you find the one that fits your criteria/needs then look at the market in that particular area and determine what (if any) negotiating room there is.
I hope this puts a realistic spin on your search.
It's a good time to be the man with the money.
P.S. Since you are a first time NEVER make an offer on a home with NO contingencies unless you are getting it for 50 cents on the dollar...at the very least you want an inspection contingency and your lender will want a contingency for clear title.
Here are some numers to help you in your quest. I pulled comps for 92 properties that have sold in San Ramon since April 1, 2007. I only pulled comps that sold between $700,000 and $850,000. I'm sure you know that San Ramon varies widely depending on which side of I-680 you are, as well as how far up "the hill" you are - so these numbers don't necessarily mean a lot out of the context of thwe individual properties, but will hopefully give you some idea of what you are dealing with.
The average list price (again, within the range of $700k and $850k) was $788,677, the average sales price was $777,549, for an average price of $11,127 BELOW list (1.41% below list). The most that a home sold ABOVE list was $36,000, and the most BELOW list of $72,500.
Here is some data for June 2007 versus June 2006 for the two San Ramon zips (data courtesey of DQNews.com):
Zip: 94582 (aka "Great" San Ramon zip)
Median Sales Price: 871,500
Change in Median Price: -1.0%
Zip: 94582 (aka "Ok" San Ramon zip)
Median Sales Price: 711,000
Change in Median Price: -11.7%
The discrepancy between the 2 zips is representative of what is happening across Contra Costa county. The higher priced areas are faring well relative to the lower priced areas. The subprime, and larger credit markets, crunch is affecting the poorer areas first but will undoubtedly take a toll on the higher riced market in the months to come. So, what does this mean for negotiating prices? If you are looking in the lower priced areas of San Ramon, now may be the time to buy - as inventory is up and the data is there to support more aggressive negotiating tactics with sellers. If you are looking at the higher priced areas, it make make sense to wait a few months for an even better buyer's market.
I know it is an extreme long-shot, but are you by any chance the Sanjay that works in venture capital in the city?
Here is my additional tip(s). Sellers usually are not extremely negotiable when they first list their properties. Even if they are overpriced, most are not ready to lower their price substantially, believing there is one buyer out there willing to pay thier price. Sellers become more motivated to lower their price or accept a lower price when the property has sits on the market without acitvity.
This does not mean that you should not make a low offer, if that is what the market indicates. Rely on a knowledgeable local agent for guidance. If a property first comes on the market and is priced right, don't hesitate to pay ask or near ask, because that really might be your best deal. Likewise, if a seller is trying to sell at yesterday's price, and you are interested, make an offer appropriate for the property. If the seller rejects it, ask you agent to keep in touch with the lisitng agent. The seller might be willing to discuss your offer again at a later time. Make it easy for the seller to open the door up again. A good buyers agent can go a long way in their contributions on this front.
I liked what Sylvia said. So I think I am going to look for such an agent. There should be someone out there. BTW, I think agents giving back their commissions is a bad idea. I do not want any agent to help me "get into a home" by giving up his/her commission. I want a lower price!
I must say, that I do not intend to be unreal. My wife and I feel comfortable spending about $825K. But our problem is that we do not like anything in that range. Most of the homes that we really like are listed above $950K many of which are still listed btw. So you see, we either wait or we start to negotiate down. I figured given the market, why wait. Here I like what Mike said.
I am in the San Diego area, and in the last week have had multiple offers on properties I have had listed. All went right in the range of what we were looking for.
Your best bet is to use an agent who is a strong negotiator, who works in the area where you want to buy, to steer you to the "good buys." When it is a good buy- BUY IT! Don't try to negotiate down from that figure- offer a figure that is going to let you obtain the property at the good buy it is- without insulting the sellers. I've seen sellers accept a lower amount than another offer on the table, only because the other buyer had made them angry by negotiating the deal to death! I just had it happen recently- we had been negotiating for 6 days with one buyer, and had a "verbal" on what would probably happen. Before the paperwork was prepared, another offer came in and my seller took it as it was- because buyer 1 had dinked them around too long, and the new buyer had come in right about where we were after 6 days- they wanted them to have it!
Good luck to you to get the best buy you can on the right home for you and your family.
I agree with Syliva's response. However, in my market, currently we are seeing a sale price vs. list price ratio that is pretty consistent no matter what the price range is. Offers are coming in initially around 92-93% of asking price and selling around 95-97% of asking price. We have been seeing this trend for about 9 moinths or so.
Melissa Mancini, Realtor, CBR, GRI
You mention that you are prequalifed...you might want to get with the lender and confirm that. things have changed...you might have heard. A prequal is worthless. Have the lender process you to approval and get the deal solid so you can transact with confidence. That said, be sure to leave a contingency or two in the deal to safeguard against any
IMHO find an agent that cares and, rather than focusing on a set reduction focus on the actual values and how low you can get a house by being there and ready at the right time.
Best of luck!!!
RE/MAX Bryan-College Station
The bottom line is that all homes are for sale for a reason, not all will be bargains, not all will be well priced and not all will be homes you want. If you're patient and have the ability to get denied a few times then you lose nothing by making the offer that you think is right...they say no or yes and you buy or you don't.
If you get a local agent that has their ear to the ground and put them on the file you will get the better recon that comes from being plugged in...might even get one before it comes to market.
Patti Phillips makes a great point about the ebb and flow of the negotiations...sooner or later someone has to say "Okay, let's do this thing" and just sign the freakin' counter. I've seen the deals bog down over some ridiculous stuff and very small amounts of money.
Sounds like you know what you want. Just don't let any preconceived ideas about negotiating to at least 15% of list price keep you from buying the best home for you. Remember, sometimes you can find a really sweet deal, but the rest of the time, you get what you pay for! The market is a little soft, meaning buyers have more options. But all is not lost for the seller. Sellers have options too. And with mortgage companies tightening the belt on subprime loans, we may start to see a decrease in qualified buyers!
Having a LOCAL agent helps...if they use the term No Brainer...lissenup.
We did not have computers then, but I have tracked prices in all markets over the years and he was right on! A properly price home will sell within 3% of list price almost every time. Of course I can get you more than 15% off of a home that is 20% higher than market...
It sould as if you know what you are looking for and in a position to negotiate. As of today there are approximately 34 single family homes for sale within the price range of 800 to 900K that would be on the westside of the Bridges developement. Let me know if I can be of any help.
Thank you so much for giving me the Best Answer among all the great answers by other realtors. I also appreciate your responding to all the realtors once your decision is made, not too many people do that. I like closures.
Good luck on your house hunting, I know it can be a very frustrating experience. Other than the things I mentioned below and I know it sounds like a clichÃ©, you do want to find a realtor you feel comfortable with, who truly understands your goals and will watch out for your best benefit. Then you can trust that he/she will find you the best deal.
One thing comes to mind, since what you like in the area you are searching for is much more expensive than what you can comfortably spend ($950K vs $825K) , you might want to look at houses that are in general fit your criteria, in a great location, have a great floor plan and other fundamentals that you need and are too expensive to change if do not come with the house; good schools is always important as they tend to have and attract great families, and have good resale value; but might be a fixer or just need some cosmetically updates that you can do as time/money/energy allows. Houses that need fixing tend to stay on market longer now in a more buyers market, and could be something that can become a great buy for you.
I agree with the not expecting â€˜discountsâ€™ from the realtor idea, I was a listing agent and worked with a realtor who gives discounts, I watched how easily she gave up negotiations on behalf of her clients both on purchase price negotiation and repair negotiation. We stood our ground and they gave in. I was amazed.
Best luck to you and keep us (or me) posted if you will. If you ever plan to move to Marin, give me a call.
The advice of a real estate professional that knows the local market is key. Sometimes homes are priced perfectly, and sometimes sellers put them on the market to "test the waters" and see if they can get what they want. After they realize their homes are priced ambitiously, the price reductions start to come in.