If a seller lists their home for 450K, and the comps in the area don't support that asking price?

Asked by Jazzman727, 08873 Tue Jun 30, 2009

What would be considered a fair offer, and what would be considered an lowball offer?

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William Leigh…, , New Jersey
Tue Jun 30, 2009
Jazzman: I'd take minor issue with the statement about a low offer not "insulting" an owner. I have had seller clients who thought a specific offer was not worthy bothering with as in, "HERE COMES TROUBLE IN THE FORM OF A CHEAP SOB." You may not insult anyone but you may not impress him or her either.

My advice: Get a Realtor involved and be sure he or she will be paid for their assistance. (You don't say how you know the owner has listed the house at a specific amount.) The Realtor can give you all the comps and second-guess your negotiating stance and changes you make to it.

Bill Holt
2 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Tue Jun 30, 2009
Hi Jazzman727, a well constructed Pricing Analysis will flush out overpricing instantly and guide your bidding process. Drawing on past comparables - 12 months, 6 months and under contract, the analysis establishes the market trend and then applies it to current active comparables - the result is a recommended range. This is the same analysis that I do for sellers to guide list price discussions. In fact, the analysis is designed to establish a recommended market value - it is a great tool if done well.

Base you offer on the facts of the market and you will be far more likely to get a response from the seller and begin a dialogue that results in successful closure.

Good luck to you.

Jeannie Feenick
"Unwavering Commitment to Service"
Search the MLS at http://www.feenick.com
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1 vote
John Sacktig, Agent, New Jersey, NJ
Tue Jun 30, 2009
You need to see the house. I can only assume that you have by stating the comps do not support the asking price. How do you mean that.. is it that, the other houses are selling at 390k and this is at $450k and is is equal to the other homes...? -or- does it have 100k in upgrades over the others to justify the number?
And yes, you can make an insulting offer and the people may just ignore you right out the gate... it will give them a bad feeling about you, even if you then do get in the game at some point.

The key to any transaction is due diligence on your part in the form of getting a Realtor and also doing your own homework to make an Intelligent offer.
1 vote
Kenneth Verb…, Agent, PRINCETON, NJ
Tue Jun 30, 2009
Only the seller can decide what a low ball offer is. How it is presented will have more to do with whether the sellers are insulted or not. Sometimes comps arent comps at all. For example I just listed a farm of over 10 acres in an area where most homes sit on 1/2 -2/3 of an acre. If the home you refer to is about the same age, condition, size and location of others that have recently sold you have a good handle on value but only the seller and buyer will set value. (the lender may have their idea of value also but they seem especially conservative) Last year I had a buyer set to buy a home for 1.8M. It appraised at this number and he felt it wasnt worth it so he got out of the deal (did inspections and appraisal before signing a contract) A month or two later it sold and closed at 2.2M (in a declining market)
My advice ,make an offer you are comfortable, include an appraisal clause in the contract.
0 votes
Inspiration…, , California
Tue Jun 30, 2009
A fair offer would be one supported by the recent comps.
0 votes
Melissa L.…, Agent, Hillsborough, NJ
Tue Jun 30, 2009
As Michael stated, the home would have to appraise for the sales price. Also, it may be a good idea to take a look at the other homes in the market area you are considering buying in. This will give you a better idea if the home is priced appropriately. Another thing is...if the home has been on the market for several months at this price, then it is may not be priced right.
0 votes
Jeffrey Halp…, Agent, Hopatcong, NJ
Tue Jun 30, 2009
Your only intelligent offer is one based on the comps. If you love the house you may be willing to raise your offer, but be aware that the appraisal my not workout. However, besides comps. some appraisers also look at other factors includng condition, contingencies, and your personal needs.
As far as lowball. NEVER feel you will insult the owner. An seller's motivation changes constantly. One minute they would be upset about an offer, the next they need to take that offer. Today, owners should be ecstatic to get any offer. It may not work out, but it starts a dialogue. Buyers still cannot steal a home, but if your agent represents you in a way that gives validity to that offer and the seller's agent has been true to their client of where the market is, coupled that with a seller that wants to sell and a buyer that wants to buy, you will come to a meeting of the minds.
Good Luck!!!
0 votes
Michael Rayno, Agent, Cape May, NJ
Tue Jun 30, 2009
By "comps" do you mean solds in the last 6 months? If you are going to need a mortgage their price would need to be close to the comps in order for the appraisal to come in OK. A fair offer would be something close to the comps, be sure that you are comparing apples to apples bedroom and bathroom count the same lot size similiar. be careful with a lowball offer sometimes the owners get insulted and will not enen counter a lowball offer lowbal would be 10 to 20 % under comps.
Hope this information is helpful
Mike Rayno
0 votes
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