Find several homes you like on the MLS and run them through the mdlandrec site, and the tax records site (you'll need the current owners name from the tax site to place in the mdlandrec search). Compare qualities of each home and if you have a few neck and neck, use the information you've gathered to help make a decision. Two comp homes, but one seller is in "distress"? Go for the distressed home with a lowball. Seller declines the offer? No worries, make an offer on the other home. That seller declined? No worries, there are hundreds of other homes on the market to choose from. In a normal market, 10% off asking for you first offer is normal and should start some negotiations (assuming the home is priced correctly). In a stagnate market? Well, just posted below was an example at 33% off asking.
MRIS shows Anne Arundel November unit sales down 41%, dollar volume down 39%, with 4243 homes on the market. Take your time, lots of homes to choose from.
You need to make sure that your agent is a good communicator- sometimes the difference between a slap in the face and a low offer is in the style of presentation.
Personally, as a buyer and an agent, in general, I will do a quick market analysis and will normally offer less than asking price. The difference for me is that I buy investment property so I am not really worried if I lose out on a house. If you are looking for a primary residence, there will normally emotional factors that may take precedence. I think that something that will make a difference (no matter if you are an investor or a regular house buyer) is to be a strong buyer. Sellers will normally pay more attention to a buyer that is pre-approved and provides a strong earnest money deposit an offers a little less versus someone who is only offering, for example, $500 deposit with a contingency for 100% financing in 2 months.
So its really not only about price, you also have to consider whether they are going to give you good terms, like paying all of your closing costs, transfer taxes, providing a decorator allowance or even doing seller financing.
If you have not often been through the house buying process, this may be a daunting experience so it helps to have someone on your side that is actually a good negotiator (in case you are not).
The worst thing that can happen with a lowball offer is that the seller rejects it outright. Of course that may also set the stage for future considerations of a revised offer with the same seller on a collision track, since a really low offer, just for the sake of a low offer, may signal the seller that you might not be a serious buyer. The other possibilities are that the seller may counter with their own revised price, depending upon the other terms you have included in your offer. Of course they might accept your offer -- you just never (necessarily) know what their motivations are or how anxious they are to sell. The level of seller anxiety is often driven by how long the property has been listed and the time of year your offer is being made. Right now, we're entering into the slowest selling season of the year.
Although I do not know what type of properties or price ranges you might be considering, I've taken the time this morning to pull together all properties that are currently active in Anne Arundel County that were originally listed as far back as April 1, 2007. The included properties must be at least 4BR, 2BA, 2-car and be listed currently for less than $700K. The DOMP number represents the total number of days any property has been on market. Here's the link to the report:
If I can be of further assistance, please don't hesitate to contact me.