Worry more about the upside: What offer would be too high? The answer: Anything above the fair market value of the property.
What you need to do is determine its fair market value. Then offer no more than that. Probably offer less. As you imply (you're more delicate in such matters than I am), the Zillow number is worthless.
What you've run into with the listing agent is pretty typical. Some agents who handle REOs do little more than put the listing (and usually one poor-quality picture) on the MLS. (Others--and I know some--do a lot more. But your experience is more the norm than the exception.)
So: Get your own agent. Find out what the property is worth. Make sure you factor in needed repairs. Then make an offer no greater than its current value. Probably offer less; your agent can advise you on strategy.
Hope that helps.
If you know the market, know the work it needs and feel it worth what you are willing to pay go for it.
I Love the buyers who offer low don't get it and would of paid more. I also love the buyers who put in a high offer it gets accepted and then get cold feet and back out. Do you see a pattern here, its called human nature. You want what you can't have and when you can have it, you don't want it.
As for how low is too low an offer: you'll know when your offer is too low when the seller (or bank) won't accept it.
Be sure to check online tax records for the property to see how the town/city values the property. This in combination with the market value and asking price should provide a strong direction on what to offer.
Finally, your purchase price will ultimately be determined by what you feel most comfortable paying, based on what you plan to do with the property. For example, if looking to rehab and sell for profit, you will want to make sure you pick up the property for the least amount possible. Whereas if this home is for your personal use, you may pay more of a premium at the auction to secure the property.
Hope this helps
Denis DaSilva-Broker CDPE, LMC e-Pro
Managing Partner | reavolv real estate | Website: http://www.reavolv.com
phone: 508-813-6875 | email: Broker@reavolv.com
Broker License for Massachusets and Rhode Island
If you send us the address we can give you the value but without it it's all speculation.
There might be a reason the listing agent is not on his game with this property. The bank who foreclosed on it might be completely disorganized and selling this home therefore near to impossible. If you are taking a loan on the property you will want to do some serious due diligence on the property. You will also want to seriously educate yourself on the foreclosure process. It's not for the faint of heart.
Understanding fair market value is the first piece of tendering an offer. Hopefully your working with a Buyer's Agent who can provide you with sold data for similar homes. Whats you know what fair market value is than its up to you to decide where to start the negotiations. If the home has been on the market for a long time then it would not be off base to try and start negotiating 10-20% below fair market value.
But from where I am, it could be anything.
You need to have a Realtor do a CMA to determine the Market Value.
Real numbers backed by logic and reason.
Recently, the emphasis on Appriasals has made this more important:
If you offer too much over Market Value, you will not be covered by the Appraisal and that will create a whole bunch of problems for you.
Good luck and may God bless