Home Buying in Austin>Question Details

Laura T, Home Buyer in 78745

Is it reasonable in Austin's market to make an offer that's 10% - 15% less than the asking price?

Asked by Laura T, 78745 Thu Jan 17, 2008

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I feel that if you are a seller, you position yourself with the mindset that buyers will offer lower than what you are asking unless you are in a HOT SELLERS market as we were a year or so ago. Also, truly if you are a seller and have put your home on the market for exactly what you are hoping to get, I think your agent is doing you, the seller, a disservice. There is always wiggle room and most cases homes sell for 93-95% of the asking price in a NORMAL MARKET!

HAVE AN OUTSTANDING DAY!
0 votes Thank Flag Link Thu Jan 24, 2008
Laura,

Good question. It really just depends on so many factors. Is this the worst home you've seen or the best. Do you think it is priced right to start? If you've look at 100 houses and this is the best and the price seems about right, you may have some stiff competition who will bid list. If the home has been on the market a year and is one of the worst, then 15-20% under market might be the right place to go. I think it also depends on the price range you are in. At the lower end of the market, many people probably won't have the much room to move. At the higher end sometimes there is lots of flexibility and a wide variety of opinions on what a particular home is worth. The one thing I always ask buyers is what would you think as the seller? When you are ready to sell this home will an offer 15% less than asking work for you? Your circumstances could be different, but it is an interesting exercise.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Fri Jan 18, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Anything is reasonable but its also reasonable to hear "no thank you" from the seller. Go in prepared to negotiate and have fun.

BTW- I did $1.2 mil in 20% below asking price last month. One of the respondents below, Paul and I went through probably 50-60 homes and 10+ offers to get 3 deals.
0 votes Thank Flag Link Thu Jan 17, 2008
Both answers below are great! You really need to know which area of Austin and the market changes within different neighborhoods. For example: The Oaklands in Round Rock don't stay on the market too long so offering 10 - 15% below probably wouldn't work. It would be best to ask your Realtor to complete a Buyer's CMA and to educate you about the activity of the market around the home of interest.
0 votes Thank Flag Link Thu Jan 17, 2008
Offer strategy is crucial and I always offer the following example to my buyers ...
- House #1 is listed for $200k. With a market analysis we believe it is easily worth $210k - $220k. This house may warrant a strong or possibly full price offer ASAP.
- House #2 is listed for $200k. With a market analysis we don't think it's worth a dime over $185k ... this house is a candidate for a low ball offer or walking away.
0 votes Thank Flag Link Thu Jan 17, 2008
Laura,

It is important to look at as many aspects of the subject property as possible; including activity in the neighborhood, time on the market, reasons for selling (some listing agents will actually come right out and divulge this), price range in which the property falls into, amount owed on the property (at least what you can assume from the tax records), condition of the property, etc.

In short, I think it's reasonable if the situation dictates it. Another school of thought that some agents and buyers are subscribing to is to make the offer and see how the seller responds. If you have no reason to suspect that another offer is in the making, then it may be worthwhile to use that approach - with appropriate justification for the offer, of course. The seller could accept your offer, counter, or refuse it altogether (most skilled listing agents would recommend they counter if the offer is unacceptable).

Danny Gallant, Realtor
The Gallant Group @ Keller Williams Realty
512-922-1273
0 votes Thank Flag Link Thu Jan 17, 2008
It is reasonable to offer 10%-15% if the comps in the area justify it. There is no "rule of thumb" when it comes to submitting an offer. There are many different factors that you must take into account when submitting your offer. If you are genuinely interested in the property and it has been on the market for only a couple of days, then it better be strong, and 10-15% doesn't constitute strong without justification. It's also a good idea to present the offer in person so that you can explain the reasoning behind your offer as opposed to having it simply rejected by fax or email. Also looking at the comps for the area I can tell you that if the property has been on the market over 60 days, then you have a chance.
0 votes Thank Flag Link Thu Jan 17, 2008
Laura: that's a very involved question. It depends on many factors; the property condition, how long it has been on the market, the competition in the area, THE AREA. You can make the offer, but that doesn't mean the seller is going to play ball with you....and do you want them to play. The seller has a magic number and you do, too. You don't want to insult them so that you wont' be able to meet at a happy place for all. Get advice from your Realtor. A Realtor can only advice you after you have hired them and signed a formal Buyer's Representation Agreement.

San Juanita Schafer, e-PRO, GRI
KELLER WILLIAMS REALTY
c.512.423.1349
0 votes Thank Flag Link Thu Jan 17, 2008
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