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how much to offer on a house below asking price?

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How far below the asking price can we go?
We're first-time home-buyers interested in a particular house. I know there are a lot of factors to consider when submitting an offer - but I'm just going to share the basics of what we know.

The list price on the home is $225,000.
4 houses on the same street sold last summer for anywhere between $195,000 - $205,000.
The house has been on the market about a month.

And finally..
A house on the same street just came on the market today for $224,900. They are holding an open house this weekend.
Here are the major differences (to me- at least) between the houses:

The newer sale 300 more SQ feet (in the basement.)
The newer sale has new hardwood flooring and carpet.
The newer sale has a new HVAC/H20 Heater/Humidifier.

The other house has 1 more bathroom.
The other house has a deck.
The other house has a walk-out to the backyard.

So - whatever one house has the other doesn't. For instance, the other house doesn't have new
carpet.. it's berber.

We are thinking of offering $215,000 plus closing costs (about $7,000) for the house that has been on the market for a month.
Do you think it would be "insulting" if we were to go lower? Or are we already too low?

Also - how does the new listing across the street affect our offer? Does it at all?

Thanks for any help, advice, or tips.

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asked Feb 25, 2017 in Business and Finance by MeredithR
edited Feb 25, 2017

5 Answers

0 votes
Tap, what you need or want has nothing to do with what buyers are willing to pay for your house at a particular time.  I know- I recently sold my house for about what it was worth a few years ago as a two bedroom cape, before we sunk tons of dough into it to convert it to a 5 bedroom colonial.  

What a buyer should offer has a lot less to do with what the asking price IS, than what the asking price realistically should be.  Those two don't always match because so many sellers have a hard time coming to grips with the reality of today's market, especially when they may lose money.

In most markets these days, buyers have the luxury of not having to care about insulting the seller because they know they can just move on to the next one.
answered Feb 25, 2017 by Joan Braunschweiger
0 votes
You seem to think the house is worth $205k or less based on similar sales. I would offer only what you feel it is worth. A seller would rather be insulted by a lower offer instead of no offer at all.
answered Feb 25, 2017 by Dan
0 votes
If you don't trust your agent, you are already at a disadvantage. Buyers need to take the choosing of their agent seriously. After all, this is possibly one of the largest purchases of your life, thus far.

 It sounds like you already have some knowledge of the recent sold comparables. Educate yourself (sounds like you've done a pretty good job of that already), milk your agent's knowledge (that's what she's there for) and make an educated offer, based on the knowledge you have.  

You should never offer more than a house is worth to you.  The more you know about the market, the more likely you are going to be successful in getting the house you want for the price you feel comfortable with.  A great agent will make the process as painless as possible.  An agent who you already don't trust, not so much.  Gain knowledge, gain confidence in your agent (or use another one) and look forward to getting the house you want for a fair price.
answered Feb 25, 2017 by Joan Braunschweiger
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I'm selling my house right now, and I would feel somewhat insulted. The seller may not have that much equity so may not be able to go too far lower than their asking price.

The listing price is 225K and you're offering 208K basically. I've had one buyer give an all cash offer but offer 30K below my asking price. It was too low after seller closing costs and agent commission so I didn't counter. I had another spend so much time coming to my house a few times only to offer 25K lower. I didn't counter.

I would say 10K below asking price is workable for a seller. The seller would probably counter and an agreement can be reached.
answered Feb 25, 2017 by Optimus012
0 votes
Buying a house…how much below asking price did you offer?
After months of waiting, FI & I are finally ready to buy our first home together (yay!). We found a house we love and has absolutely everything we need. It’s at the very top of our budget, and we’re trying to decide what we’re comfortable offering for it. If we have to pay list price, we will (because we love the house and it is a price we are comfortable with), but we don’t want to overpay if we could possibly get it for less. On the other hand, we don’t want to go in too low and end up losing it!

So….tell me: anyone who has bought/sold a house, how much below list did you offer. Did they accept? Counteroffer? Share your stories!
answered Feb 25, 2017 by Raymond L.
we offered asking based on the market and comps.

edit: that being said, one house we offered asking and didn’t get it, our current house we offered asking, and got it. It totally depends how the comps come back (and where having a really good realtor comes in).
I don’t have a house, but it really depends. If it’s been listed for a long time, I would bid lower than if it just got on the market. My parents recently bought a house and they had to bid on 3 to finally get one–the other two (and possibly the one they ended up getting, I’m not sure) both went for more than the asking price. It really depends on how in demand that house is.
We did a new build home, so there was no formal negotion/offer process. We had to pay the "asking" price, however, we got to decide on a number of semi-custom features that added up to the final price. We were able to negotiate some incentives though like a $2,000 toward closing and getting free backyard landscaping.
You need to talk to your realtor, what you should offer really depends on the area and the market in that area. The market you can lowball, the market you cannot for asking, and some market you need to go over by 10 to 20%, it really depends.

When my husband and I bought our current house, we offered about 5% below asking, but that was because of the area, the comps in the area, and that the house had already been on the market for 100 days.

at the same timewe were buying, we sold his previous house in an area just 20 miles from where we were buying, and almost all of the offers were 20-25% over asking Because the area was in such high demand. He only considered the highest ones, and we almost ended up selling to an all cash offer which was 20% over. He had received eight offers in four days, and we were in escrow by one week after it went on the market. Completely different than the house we bought

look at redfin.com, find comps in the area to see what other similar houses are selling for, and talk to your realtor. That will give you an idea of how much to offer.

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