when putting in an offer to purchase a house, how much percentage below the asking price is a good offer?

Asked by Ben, Queens, NY Sat Aug 9, 2008

without insulting the seller

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Don Tepper, Agent, Burke, VA
Sat Aug 9, 2008
Don't worry about insulting the seller. (Unless your name is Emily Post.)

First, determine the real value of the house. Second, determine what amount of mortgage you can qualify for. Third, determine what levels of payments you'd be comfortable with. Take the LOWEST of those three numbers: Value, mortgage qualification, comfort level. That's the most you should spend on the house.

Only then look at the asking price. If the asking price is higher, ignore it. If the asking price is lower, then you lower the maximum you'll spend on the property to the asking price. That, again establishes your ceiling.

Now: Offer that number, or something below it. How much below it? That's up to you. Something in the conservative range if 2%-6%. Something in the aggressive range might be 10%-20%. But, remember: We're talking about your offering below your maximum allowable amount, not necessarily the asking price.

As for insulting the seller: If the seller's overpriced the home, did the seller worry about insulting you? I don't think so. How about all the people who viewed the home and then didn't even both to put in an offer; did those people worry about insulting the seller? I don't think so.

Besides, you're not a mindreader. Some sellers will be insulted with an offer one penny below their asking price; they already feel they're "giving the house away." Other sellers would be delighted with an offer 20% below their asking price. We already figured out that you're not Emily Post. Well, you're not the Amazing Kreskin either. You're just a guy trying to get a good price on a house. And that's fine. So: Follow the steps above.

Hope that helps.
6 votes
Peter J Roge…, Agent, Mahwah, NJ
Sat Aug 9, 2008
When I started in the market a number of years ago I was taught your first offer should be within 10 of the asking. The seller then countered, you countered the counter and you met somewhere in the middle. Everyone knew this was the way the game was played. In the hectic sellers market of the past years that went out the window but now we are back to it being a buyers market so the game has changed again
Certainly 10% it not going to upset anyone. If it does then you are not going to do a deal anyway. Make sure you know the comp sales to make sure its not overpriced and also see if there have been price adjustments already which should indicate an urgency to sell and the willingness to negotiate.
Peter Rogers
3 votes
Paul Howard, Agent, Cherry Hill, NJ
Sat Aug 9, 2008
How much is the house worth? Have your agent do a market analysis.
Then have your agent calculate the average ratio of original asking price to sold price and also the ratio of list price at time of sale to sold price of all homes in the area for the last 6 months (not just actual comps). This will tell you what other people in that area have been doing. It will not tell you what to offer though for that particular house. that will depend on details which you should discuss with your agent. If you think the house is priced below market offer 5% below that anyway (if it is vacant maybe more) but try to give the seller a choice of settlement date.

You should be using an exclusive buyer agent. To find one in your area go to http://www.naeba.org
Good luck,
Paul Howard
2 votes
Christine Ma…, Agent, Reseda, CA
Sat Aug 9, 2008
Typically, your realtor should pull similar properties that've sold within the last 6months to get an idea of how realistic the asking price is. Then, based on time on market, and condition of the home, you will want to put in an offer closer to asking price if you really want the house OR an offer 5-10% below asking is a good starting point. It gets insulting if the home is recently renovated or "newer" than most of the homes on the market, yet you're offering 10% or more below. Also remember, the seller's may be stubborn and be insulted no matter what. They perceive the value of their home to be the asking price or higher.

Bottom line: 5-10% good starting point otherwise be prepared to negotiate or be turned down.

Christine Markow
ERA Statewide Realty
Office: (908) 874-7797, ext 519
2 votes
John Sacktig, Agent, New Jersey, NJ
Thu May 3, 2012
I bet Fredcarly.. The question was asked in 2008.. maybe late to the game in your offers too?
1 vote
William Leigh…, , New Jersey
Sun Aug 10, 2008
Ben: I tell my sellers NEVER to be insulted by an offer. On the other hand, it's hard to take a low offer seriously and even if you continue negotiations, the seller may look at you as trouble from the git go. Get your agent to do a CMA, (he'll know) and then you will know comparitve values. Next, figure out what you want and need. Paying a premium for the "exact" right property is better than a bargain on something unsuitable. You're going to live there for gosh sakes! How come everyone will pay more for a Beemer than than a Yugo? Value is part of it but class is another. Worry more about value than bargain and you'll do much better. Trust me.
1 vote
Sharon Kozinn, Agent, Hillsdale, NJ
Sat Aug 9, 2008
Dear Ben,
There isn't a simple answer to this because every house is priced differently. Have your agent do a Market Analysis on the property you are interested in buying and use that as your guide. Many sellers have started pricing their homes the right way, and they may be priced to sell at that exact price. There are still homes overpriced, that should get an offer lower than the asking price. Only a snapshot f the current market can tell you where houses should be selling for.
If you don't have an agent, do some homework yourself before formulating an offer.
Good Luck.
Sharon Kozinn
Web Reference:  http://sharonkozinn.com
1 vote
Jeremy S. Hi…, , Cherry Hill, NJ
Sat Aug 9, 2008

This question is often asked by many buyers and the truth is that just randomly determining a % to reduce from list price to make an offer to purchase is the worst way to put in an offer. Neither is it logical. For starters when you are purchasing a home your goal is to look out for your interests and your inerests only. Your concern should not be whether a seller is insulted or not. Some sellers would love to have any offer even if it was low. Others may feel as though their house is worth more than what they are listing it for. That's there problem and not yours.

What's most important for you to know is the most comparable recents homes in the area of interests. Then and only then will you have the ability to placed a well informed offer to purchase a home. Without this information you run the risk of losing making a very bad decision.. You may even overpay for a home. For example let's say the home is listed 10% above its market value. And you decide to make a offer that is 5% below the list price. You would be making a terrible mistake. Let's say the house is listed 10% below market value to stimulate a quick sale. A you make an offer at 5% below asking price. You run the risk of losing this house to a more informed buyer who recognized the good deal. Truth is you need the assistance of a buyer's agent who will supply you with all the information you need so that you can make a well informed purchase. Feel free to call me anytime direct should you need expert real estate advice.
1 vote
fredcarly29, Home Buyer, River Edge, NJ
Thu May 3, 2012
houses are going for the full asking price lately...crazy but true. I missed out on a few offering less. It did not matter...multiple offers for full asking price so thus a bidding war ensued.
0 votes
Dave Miller, Agent, Dumont, NJ
Tue Nov 16, 2010
Perhaps zero. Depends on the house - some homes are very aggressively priced, others way over priced. The MLS sold average is about 91% of asking price but you really have to go on a house by house basis...
0 votes
John Sacktig, Agent, New Jersey, NJ
Mon Aug 11, 2008
Ben, there is no "percentage" number. This is a poor way to go about buying a home. Get your comps of the area and see what has been sold recently and make a descision from there.
0 votes
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