When making an offer- is there a rule about going in under the seller's asking price?

Asked by Harm, Anchorage, AK Sun May 11, 2008

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Alan May, Agent, Evanston, IL
Thu May 15, 2008
There is no magic rule about how far "under" the seller's asking price to offer. Each home should be approached on an individual basis.

Some sellers have dramatically overpriced their homes, some have priced them reasonably, and some have priced them at fire-sale-bargain-basement pricing. The key to knowing what to bid, is knowing your local market. Know what comparable homes are selling for, and have sold for (very recently). Be objective about which homes are TRULY comparable. (ie: don't use the house two doors down, that has 2 extra bedrooms, a spanking-brand new Viking kitchen, and an olympic sized swimming pool)
2 votes
Pam Winterba…, Agent, Danville, VA
Sun May 11, 2008

There is no rule. Ask your Realtor to do comps for you on the house and neighborhood, any upgrades and condition of the home and determine how long it has been on the maket. From that you will determine if the price is accurate and get an idea where to price the offer at. Good luck.
1 vote
Curt, Both Buyer And Seller, California
Thu Aug 14, 2008
No, there is no rule. People will tell you that houses are priced depending on what the seller wants to get...sometimes this is the case, and sometimes it is priced based on what the REALTOR wants to sell the house for. Your offer should be what you are comfortable with. There are alot of things to consider when you make an offer and what you can afford is only one piece of the equation. Consider the current market, how long has the house been for sale? How long has the current owner been in the house? What does the house appraise at for tax value? Are there any other current offers on the table? Often times if you are flexible, this can sway the sellers as well...include in your offer to let them pick the close date...maybe they are not *completely* ready to move our just yet. Creative offers can sometimes take your offer straight to the top...even if it isn't the highest offer on the table.
0 votes
Alison Lane, Agent, Anchorage, AK
Mon Jul 21, 2008
Ask your Realtor to show you comparable market data for nearby homes with similar features (size, layout, age, amenities and location). You should be looking in several categories...
1. Active listings - these are the current competition that have not sold. How long have they been on the market without an offer? Any price reductions?
Walk through these houses. How does yours compare in price vs. condition?
2. Sale Pendings - these are the houses that have accepted offers and are waiting to close. Their list price and condition was good enough to bring in an offer. How does your house compare?
3. Sold/Closed homes within the last 3 months - Look at the list price vs. sales price. How close were they? How does your house compare in price vs. condition?
You will know whether the house you want to buy is over priced, accurately priced or under priced (already a good deal). These are the same statistics an appraiser will use when determining market value. If you are still unsure, ask your Realtor to include a protective clause in your contract to ensure you're not obligated to pay more than the appraised value for the home.

Alison Lane
Prudential Jack White Vista
Residential REALTOR
Web Reference:  http://www.movingalaska.com
0 votes
Eric Bushnell, , Eagle River, AK
Wed May 14, 2008
Each house is priced according to what the seller wishes to get for the home. It should be very easy to determine an accurate price, but many home owners move into and out of Alaska on a regular basis. They some times determine their price based on what they need, or unfortunately, what they owe.

The current stats indicate about a 5% reduction on sales that have longer market time. If an owner prices his home to high, sometimes he will get less. A good clean home that is attractively priced will sell for its asking price. If you watch the market and look at a few homes, you should get a good feel for what is a good deal.

But remember this, the seller may really need to get X dollars for their home, and in this situation you may offer less because that is what you feel, and your Realtor, feel is a fair price. But there will be know deal. This is the unfortunate side of inflation and our market.

Good luck in your search.

Eric Bushnell, Associate Broker
Prudential Jack White/Vista Real Esate Eagle River
0 votes
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