In the Sacramento Market what is an acceptable % below asking price to offer?

Asked by Jason, Sacramento, CA Sat Apr 26, 2008

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7
Erin Stumpf…, Agent, Sacramento, CA
Sat Apr 26, 2008
Depends...what price range are you looking in and what area? Sacramento is full of micro-markets defined by neighborhood and price range. Are you looking at an REO single family home in Del Paso Heights for $125k, a seller-owned single family home in Citrus Heights for $250k, or a seller-owned single famliy home in Land Park for $500k?

The media leads many to believe the market stinks and lowball offers rule...but that is just not true depending on what you are looking at.
Web Reference:  http://www.erinattardi.com
3 votes
Jim Walker, Agent, Carmichael, CA
Mon Apr 28, 2008
-If you just went by Elizabeth's statistics you could simply offer 95.66% of the list price which would give you an average discount. However, asking price is not always correlated as 4 to 5% above market value.
Sometimes asking price is 130% of value because the seller is stubborn, and refuses to list the property near its value. Sometimes a seller lists the house at 70% of its value because they want to build an auction mentality amongst the buyers, obtain a dozen or more offers on a single underpriced property, and get the property sold quickly at a small discount to value. (but much more than the list price)

So sometimes 20% below asking price is too high a bid. Sometimes 20% above the asking price is too low to win the bidding on a house. Sometimes the offer should be $500 more than asking, sometimes it needs to be ten thousand below the asking.
2 votes
Rob McQuade, Agent, Sacramento, CA
Sat Apr 26, 2008
Jason:

Erin and Elizabeth are both spot-on with their answers. Elizabeth's explanation of list-to-sale price is 100% correct, but what's left out of the equation is this: there's a big divide in the market right now between what is selling and what isn't. If you're keen on getting a super deal, consider focusing on areas where there's a LOT of competition among sellers and with bank-owned homes (though be warned that all real estate is local and some neighborhoods that still have a glut of REOs may see some declines to come).

If you're looking for a deal, look for the ugliest home you can find that meets all your needs and still has potential to be beautiful. So many buyers have a hard time looking past "ugly" or "broken" and skip to the nicer homes that they don't have to use their imaginations with. This is your opportunity.

And remember: some neighborhoods never crash, they only dip a little. If you're looking for a deal and want to be close to--but not IN--Downtown (http://www.ForSaleinDowntown.com) or Midtown (http://www.ForSaleinMidtown.com), I think South Natomas (http://www.ForSaleinSouthNatomas.com) is a place to consider. Prices have come down dramatically because of foreclosure activity, but at the end of the day it's a nice place to live and convenient to Downtown--and I think it'll rebound nicely once the market turns.

Now you've gotten my three cents (NOTE: adjusted from two cents due to inflation).

Rob McQuade, ABR, REALTOR®
McMartin Realty | 2031 K St Ste 100 | Sacramento, CA 95811-4253
Tel (916) 444-7577 or Toll Free (866) 720-CITY (2489)
Web Reference:  http://www.robmcquade.com
2 votes
Gene Yakubov…, Agent, Burlingame, CA
Mon Apr 28, 2008
Jason, Market conditions for the properties in Sacramento decreased up to 25% in the last 6 months, average Day On M arket has been expanding, and inventory has steadily been growing. It is a strong buyers market. Typical sale prices are 5-8% below listing, if property is priced properly. If you represented by Agent he will be able to tell you what to do. Keep in mind that if you "hit" low in current market you probobly will get a counter-offer. than you can see how close you are to the owner selling price.

Keep trying
Gene
1 vote
Karen and Pa…, Agent, Cameron Park, CA
Mon Dec 7, 2015
A house is worth whatever someone is willing to pay for it. We don't really have set % to offer less. Sacramento is running at 99% (Oct 2015) of list price and the price per square foot average is $187. Agents can give a pretty quick and easy market value of everything that has recently sold so you would know what a fair price would be in the area you are looking. Although most people who overprice their homes eventually sell, it's after they drop the price to market value that it finally sales. One thing in Sac I have noticed is that when a property is slightly overpriced, it sits without interest or showings. Trying to get a few extra thousand dollars or trying to make room to negotiate in the price gets your listing avoided. The numbers for the last year show a house priced right gets 98-100 % of the asking price.
0 votes
Nathan, Home Buyer, Fresno, CA
Sat Apr 26, 2008
“Hurt by competition from cheaper foreclosed properties, new-home construction in California could be facing its slowest year in decades.”

“The California Building Industry Association said Friday that statewide housing starts in March fell 65 percent from a year earlier. The total of 4,713 starts made it the worst March for home building in California since month-by-month recordkeeping began in 1976, said association spokesman John Frith.”

“Association economist Alan Nevin said the number of single-family homes built this year could be as low as 40,000. That would be the lowest since the association began keeping annual records in 1961.”

“Nevin said the construction slump is being worsened by the flood of repossessed homes that lenders are unloading at steep discounts. About half the home sales in the Sacramento area this year are repossessed properties, and the median sale price in Sacramento County of all homes has fallen 36 percent since the 2005 peak.”

“‘We have a tsunami of foreclosures coming this quarter,’ Nevin said.
0 votes
Jeff Marr, Mortgage Broker Or Lender, Roseville, CA
Sat Apr 26, 2008
Jason - the answer to this kind of a question is always going to start with "it depends". This question is also the perfect invitation to meet some great realtors on this site, hopefully you see it this way!

Let me know if you have any financial/mortgage related questions, I'd love to help you out!

Regards, Jeff
Web Reference:  http://www.stanfordloans.com
0 votes
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