Is offering 25% less than asking price ok?

Asked by Rob, 05667 Thu Mar 6, 2008

I know alot has to do with market conditions and prior sales, but in general how is an offer like this received by the listing agent and owner (when a good faith deposit is sent as well)?

As a follow up question, if you have an area that doesn't have alot of previous sales (in the past 6 months) due to the rural location how would you apply the current market conditions to existing homes for sale?

Thanks . . . Rob

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Chuck, Renter, Denver, CO
Thu Mar 6, 2008
I would not base your offer on the "asking price". Your offer should be based on the price that comparable homes in the area sell for and in what time frame. If your objective is to quickly sell the home for a profit and it would only be worth it to you if you bought the home at 75% of it's current market value then base it on that, not "asking price".

If you have any questions, feel free to call me 720-251-1578 or email me chuck@chuckknowsdenver.com

You can also check out my bloag at http://blog.chuckknowsdenver.com

Take Care...
0 votes
Suzanne Walk…, Agent, Oklahoma City, OK
Thu Mar 6, 2008
25% less would be appropriate in some situations and offensive in others. That is always the risk. Good faith (which is earnest money in CO) is irrelevant if the offer is immediately rejected by the seller because it is too low. Presentation of the offer will be extremely important going in this low. Do you have a buyers agent that can advise you? If not, there are tons of threads on Trulia about this exact same question.

In regards to rural comps; what is you say is not unusual at all. Sometimes you have to find properties 20 miles away and two years back and then adjust based on very specific criteria. Appraisers and agents deal with this issue all the time, regardless of market conditions. Rural properties are difficult to price and agents/appraisers go to school to learn how to do it.

There is no magic number in regards to how low of an offer to put in or how to make an adjustment on an appraisal. Each and every real estate transaction is unique and should be analyzed carefully.

Good luck,
Susan Walker
0 votes
Jose Gomez, Agent, Miami, FL
Thu Mar 6, 2008
Rob - the most important thing to look at when submitting an offer is knowing how much equity the sellers have in the home. That will determine whether a 25% reduction in asking price might possibly swing or not. For instance, if a homeowner purchased a property for $350,000 and have a mortgage of that same amount or close to it and are now selling for $400,000 then there is no possible way offering 25% less (or $300,000) will be considered (unless it's a short-sale situation). So before insulting someone by submitting an offer that could possibly be outright rejected with no way of even countering your own original offer, I suggest that you put pencil to paper and do some research into the property that you are interested in. Best of luck, Jose Gomez - Miami Realtor
0 votes
Kent Palmer, , Denver, CO
Thu Mar 6, 2008
You can offer any price you like. But I would be willing to bet that the seller will reject your offer and not even bother with a counteoffer.
0 votes
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