Question:
“When we find the home we want, how much below the asking price do people offer?”
Answer:
Sorry, there’s no set formula. What you should offer depends on 4 things:
1. Value
This is the #1 factor in what you should offer. Forget “always offer X% below list price” or “if you want it, offer full price.” Those focus on ASKING price—which has NOTHING to do with value! You need to know the home’s value before deciding what to offer. So educate yourself on values and work with a trusted Realtor.
2. Competition
If you’re the sole bidder, you have more leeway to offer a lower price. If there are other bidders, you may lose out by offering low and need to offer full value (note that I did not say full price), or even a little more.
3. Seller Motivation
If the seller is highly motivated (i.e. bought another home, has financial or personal pressures, etc.), you may get a better price. Find out why the owner is selling. Be aware that you don’t always learn the real reason.
4. Your Motivation
If you really want the home, don’t mess around with a low offer that could let other buyers to jump in and buy the home you want. Also, low offers can offend sellers. Many of my seller-clients have demanded an even higher price or refused to sell altogether to someone who lowballed them on the home they’ve loved.
