Hi everyone! Thank you for joining us back on the blog. Let us dive right into todays topic, because this is a popular one. We show houses to homebuyers at least a few days every week and the question always pops up. HOW MUCH BELOW THE ASKING PRICE SHOULD I OFFER ON A HOUSE?
Before even considering how much to offer on a home, it’s important that you’re familiar with the market you’re going to be looking in.
The market can vary between cities and price ranges. You’ll want to meet with your Real Estate Agent before jumping into the actual search process so you can learn about the current market of the cities you’ll be looking in. The ability for you to submit an offer below the listing price will entirely depend on whether you are in a buyer’s market or a seller’s market. Typically if you’re in a buyer’s market you’ll have more flexibility on price. The number of homes available is high and they tend to sit on the market for longer. The opposite is true if you’re in a seller’s market where inventory is low. This can lead to multiple buyers being interested in the same property. Which would mean you wouldn’t want to lowball at all but instead offer at or above the list price. Again, it depends on the property.
The second factor you’ll want to consider is your offer for a house:
how long the home has been active on the market to get an idea of the demand of the property. For example, if you want to write an offer on a house that has only been on the market for 2 days. You probably won’t want to offer the seller’s much below the asking price if you hope for them to at least counter your offer. On the other hand, if a house has been sitting for over a year, you’ll have more flexibility to go in with an offer lower than the asking price. Remember that even if a house has been sitting for an extended period of time, you want to use market stats to back up your offer. This is something your Real Estate Agent can help you with. If you really want the offer to be taken seriously, you won’t want to completely offend the seller. Make sure you’re not just throwing numbers around.
You also don’t want to overpay for the home. It’s important to look at neighborhood comps and see what other homes in the area have been selling for. Compare the difference in features, square footage, updates, etc. The comps are what you can use to justify your offer price when you first submit an offer. This will back up why you are offering the amount you’re offering instead of just appearing like you’re trying to get a deal.
ON A SCALE FROM 1-10, HOW BADLY DO YOU WANT THIS HOME?
The last thing you should determine is how badly you want the house. Ask yourself this. If your offer were rejected, will you regret not coming up in price? Or can you easily move on to the next house? Try thinking about the home on a scale of 1-10 – if you finally found everything you’re looking for, would it be worth losing for X amount? Decide what X is. If you lose it for more than what you’d regret losing, then it’s probably for the best!
We cannot stress enough how important it is to have this conversation with your real estate agent. They are selling homes in the neighborhood frequently and they know the average sales price to list price. They can guide you with your offer and all the details that go into the home buying process. Thank you for joining us. If you have any questions you can always reach out to us on instagram or call us, we would love to chat real estate with you!