How much lower do you typically offer on a house?

Question

Generally speaking, what percentage under the asking price would make a competitive offer.

Say the house is listed at 200k

The Apprasial is marked at 195k

Average cost of other houses in the area is around 185k

But there were 30k in renovations done to the house since it was built.

Under said circumstances, what would make a competitive offer?

Has been on the market for 74 days. Buys or sellers not using agents, sellers ambitious and buyers very interested.

Answer 1

The 30k renovations really only counts on new upgrades as like the kitchen and bathes, new pool, additions and etc. if its just for new roofing, siding, carpet, etc. that's considered as up keep and really doesn't add value to the home. Its best to get a few prices of sold homes in the area that fits close to the one you are interested in, allot of cities now have the tax records on line and you can search by address of homes sold, print them out and include them into your offer to purchase. With the home market down you should be offering in the price range what others have sold for which you have stated around 185k, make sure you make your offer contingent to an acceptable home inspection which will be able to get you out of the purchase agreement should the home inspector find any faults and if there are new additions, the home inspector will make note and ask for building permits, also add that the home owner will bear all cost of repairs up to 2K that the home inspection finds if any and that a walk though prior to closing will be done and signed by booth sellers and buyers. Don't forget to list EVER THING that is to stay with the home, refrig, stove, window dressing, ceiling fans,carpet etc. and when you go through the walk through make note ever thing is there, take pictures of the home at time the offer is accepted, then you can verify that the correct stove, refrig., etc. is the same as you seen when you made the offer. Good Luck
Retired Realtor
Bill

Answer 2

Don't jump in with an average bid. Bid below average first. A lot depends on how long the house has been on the market & how bad the seller needs to sell. Real Estate agents will lie to you. They want the commision & the more the house sells the higher their commision. The 30k in renovations were they done to code? You don't want to buy something that in 6 months to a year you have to correct renovation errors. When the city checks your house for tax appraisal & finds things not done to code you have to correct them within 30 days. I learned all this the hard way. Go over the place with a fine tooth comb. I wish I had looked harder than I did. 170 - 175 is a good place to start. Back you offer with price negotiable as long as they can provide city inspectors approval of all renovations in writing. Your the buyer you can always go down the road to another house. They on the other hand need to sell their house. You might actually get a bargain that you didn't expect to get. You don't need a money pit.

Answer 3

I have been told by a friend that is a real estate agent, 10% is acceptable. If appraisal is $195, a bank will only loan that much, they won't loan more then appraisal value. I would offer $185,000 and I think you could easily get it for that.
Hey, they can say no or make a counter offer. If its been on the market for awhile it will be in your favor.
We made a bid on a house a few years ago for $20,000 less then what they wanted, they refused the offer and we walked away. 3 months later the real estate agent called us and asked if we were still interested in the house at the price we offered. We said, "yes" as we had found nothing we liked better. So, we ended up with the house at the price we offered. Never get in a hurry because even if you don't get the house you will find another you like just as well, just a matter of time.

Answer 4

I think you should bid low. There has been too many price gages in the past couple of years and we the BUYERS need to take the power we have and tip the scales back. Whatever the house appraises for bid 10 - 15 % lower than that.

The asking price should never be part of the equation on what you will bid so take it out of your mind.

30K in renovations seems crazy, if there are really 30K of renovations necessary then they will be selling the House "as-is" and/or looking for a cash deal because something is obviously wrong with the house. If it is 30K of renovations for the home to fit your style, then that is another matter and it may not get you much on the negotiating front.

GOOD LUCK, be firm, and remember you are the customer, they NEED YOU!

BUYERS LETS TAKE IT BACK CONTROL.

Answer 5

Make your offer worth asking price but not by numbers alone. Value in a offer is not just determined by price but a variety of factors. I have never offered more then 92% of list price in hundreds of accepted offers by building extra value in my clients. The appraisal might be a good opinion of value but was done for a different situation and performed with comps now dated. Current market values might make the old appraisal useless. Renovations are never recouped on a dollar spent / dollar gained basis. I would offer $182,500 and post a 5% ernest deposit on a note due within 24 hours of removal of the inspection contingency. I would show a certified funds cashiers check to prove the funds for the note are valid. Then I would show a letter of lender pre approval and a 2nd cashiers check for funds necessary to close. By demonstrating credibility and the ability to close the deal the seller should see you as a serious and able buyer. Any adjustments upward from there in countering will be split with 1/2 credited back from seller towards buyers allowable closing costs. The seller can opt to wait out a higher offer in a currently sinking market but will only make several more payments of which most will be non recoverable.

Answer 6

I would say, depends on the asking price. If you find a home you like BUT it is overpriced or at market value, by all means bid 5-10% below. HOWEVER, dont expect all sellers to bow down at your offer. It also depends on the sellers situation and motivation. For example, I just listed my home in California. Never refinanced or took out equity so I have over 200k equity. I am in no hurry to sell. But at the same time I have plenty of wiggle room IF the offer is acceptable to me. On the flipside, there are tons of people in trouble that NEED to sell. Problem is, that information is rarely disclosed to the buyer. I have to agree it is a buyers market, but please submit your offers accordingly or run the risk of being passed on. Good luck.

Answer 7

A house is only worth what you are willing to pay. What's it worth to you? They say always keep your emotions out of it and treat it as a business transaction. If others are making offers and it's a prime neighborhood it may be worth your while to offer appraised value right off the get go. 30K in renovations is substantial (if fairly new), you would probably be getting a good deal at 195K, especially if you plan on staying in the house for a while.

Answer 8

It really dependes on what you are going to do with the property. If you plan on living it then probably not much less than 10% less than the asking price. If you are getting it as an investment property then you will probably want to go much lower in order to turn a profit.

Answer 9

192... Don't bid to low they won't even counter offer. Then if you bid again they know that you are really interested. It also depends on how long it has been on the market. They should accept 192 and not counter offer. It is a good bid