How much money is TOO low for an offer on a house?

Question

I mean is there a general rule for this? For example, is offerering $190,00 on a $220,000 home to low? The home needs some work (it's a cape and the 2 bedrooms upstairs need to be dormed, needs paint, needs new kitchen, etc).

$190,000* oops

Answer 1

Contrary to what has already been said, there is in fact a "rule of thumb" as to what can be offered. When I was in Real Estate we always told our clients to ask on the 1st bid only 95% of the asking price or you can go as low as 90%. This is assuming the house has been fairly appraised but in your case it sounds like it's something of a "fixer upper" or a "handymans special", in which case you can go lower. You are offering about 86% @ $190,000. Also, "location, location, location" still applies.

Answer 2

The property you're interested in buying - in fact, any property - is ONLY worth what someone is willing to pay for it AND what the Seller is willing to sell it for. Not one penny more.

Apparently, you went through and inspected the property. You have (or should have) a pretty good idea what the other properties in that area are selling for AND what it takes to bring that property you're interested in "up to snuff" (up to today's present, building code) for the municipality the property is located in.

It doesn't make any difference:
A] IF the Seller has an appraisal for the property from the most well-known, honest appraiser in the world.
B] IF someone offers an "oral offer" to the Seller - [which isn't worth the paper its printed on].

There is an old axiom in real estate: YOU [the Seller] name the price - I/we [the potential Buyer] name the terms;
YOU [the Seller] name the terms - I/we [the potential Buyer] name the price;
TOGETHER, WE [the Seller & potential Buyer] can, or should be able to, make the deal.

Yes, there are or may be real estate brokers, agents, attorneys, consultants and others - including family members and friends - who may offer their advice and opinions. In the end, no one else's signatures appear "on the dotted line" except yours, as the potential Buyer, AND the Seller's [and, of course, the witness(es)].

In the case of an estate (the owner of the property is deceased), the Executor's/Executrix's (sorry ladies,, but this is what the female Executor is known and referred to as), appears on the line where the Seller signs.

You know what type of mortgage you qualify for and the type which applies to that property.

This may be very difficult for some folks to do:
Make and submit written offers.
In other words: Put your money where your mouth is.

At the very most, you'll buy that property. At the very least the answer you will or may get is a flat "NO" - without any explanation. [Other than in love and romance, "NO" never hurt anyone.] A side thought: "NO" might mean "not right now".
It doesn't mean the Seller won't be in a much better frame of mind tomorrow, next week, next month, 3 months from now or even next year.

Somewhere in the middle - with a counter-offer - could by "the crack in the door" all the parties need for continued negotiation.

I got this from one of my mentors:
Remember this: SW3 - N!
Some Will. Some Won't. So What! NEXT!

If you have any doubts about any of the points I mentioned, it might not be a bad idea "to get your ducks lined-up" before you get into something WAAYYYY over your head.

I wish you well.
Our Family Slogan: "Every Good Wish to You and Yours!" I wish you, your family and your friends nothing but the absolute best of everything life has to offer.

Very Truly Yours,
Ron Berue

Answer 3

There is no fast rule, but there are things to keep in mind.

1. Realitors will get tired of it if they feel you are always low-balling.

2. If you come in too low, and you really want the house, the owners maybe insulted and no longer entertain offers from you.

3. Look at the approx appraisal value. Is the house already priced low for the value?

All in all, without knowing more, the offer does not look bad, but what is your realitor saying? Just remember, the higher the sales price the more they make, but they also want to make a sale period. If they say it is to low, ask what they are basing that on and have them give you hard numbers to back it up.

Best of luck.

Answer 4

No, $190,000 is NOT too low to offer for a $220,000 house no matter where you live. It is less that 14 percentage points away from the full offer. Realtors want to keep offers as high as possible because their cut is higher the more you offer. Watch out for advice that is likely self-serving.

Answer 5

It is hard to get an accurate answer on here with the info given. We do not know where the house is, and the local market conditions. Some markets are still going strong, and offers that low will be laughed at. Like I always say here, the 220k asking price could be low for the area for all we know. I would hire a buyers agent, its of no cost to you, and have them do a market analysis. This will be the best way to get an idea of where to start. All answers on here will be a shot in the dark.
Good luck,
RE Agent,
Remax

Answer 6

Ask your agent to get comparable properties that have SOLD, then you can get an idea where to start your offer. Also, if the house has been on the market awhile, that is in your favor. If the house recently went on the market, it is unlikely they will accept your offer unless they are motivated. If I have a buyer that wants to start low, it doesn't hurt to ask, I'll write the offer but let them know where I think we stand. The seller can counter offer or reject, and then you know where you are at with them.

In my area, houses are selling for about within 5% of asking price, but I know this varies widely by area.

You just sold your house, what would you have taken if it hadn't sold so quickly. =)

Answer 7

Do not assume that the property is overpriced at $220,000. Your first move should be to determine what an appropriate market value currently is for the property in question, and then start your negotiating once you have that information in hand.

As a real estate broker, I've seen properties go for $30,000 MORE than the asking price. You need to do market research.

Answer 8

right being that it's a buyers market again, i would say that no it is now to low. Actually i would go as low as 175k.

Answer 9

depending on the place where the property is at....
if you let me know the address I will let you know the average value of it.
shot me an e-mail.... [e-mail]