How much should my first offer on a house be ?

Question

Listing price is 160,000. It seem to be a buyer's market and I'd like bring that down as much as possible. How low should I make my first offer?
140? 120?
What is likely to be the response?

What if it has been on the market for 6 months already?

Answer 1

If you offer $140K, they MIGHT counter offer your offer. If you offer $120K, chances are they will ignore your offer entirely.

It's a BUYER'S market, not a fire sale.

Answer 2

Hi In the climate today, it is rare to get the full asking price. If there is work to be done, she must be realistic. And the fact that the house has been on the market 26 weeks, should tell her and her agent that something is not right. If she didn't need to sell, she would have let the property out months ago and be making money on the rental. If the property is one you both are set on, then put in another offer, says full and final price. It will be better to leave the next offer for as long as possible 7/10 days then the vendor does not know you are desperate for the house, nor does the agent. Do you have a property to sell? if not you are in an excellent position. It is a buyers market, more so than at any time in the last 15/20 yrs. If anybody gets an offer on their house they are lucky.

Answer 3

The short answer is that you should do what feels right to you...the only thing they can do is say no.

Personally, I low ball until I get a bite -- BUT -- I go for the deal and have yet to fall in love with a house or property. If you care about your buy price together with a particular property, a "no" is exactly the same thing as counter at a price outside your "good" price range.

Set list price to the side. Look for 3 comps in the last 30 days...if different than the list price, consider the comps what the list should be.

Using your basis (160) , I recently offered the equivalent of $141,000 for a property that was close to what I wanted and 135,000 for a property that was not. In both cases, I waited until each neighborhood had had no sales for 60 days. Both countered (at $150 and $155, ironically). I said no. I want to see if 90 days will pass without a sale and/or if anyone in either neighborhood will get $150.

Now, I'm hoping for a slaughter.

I'm such a nasty bastard.

Answer 4

If they are asking 160k. For the home and you offer 120k. They don`t even need to answer your offer. They can just put it in the recycle bend. If you are woking with an agent they will talk with the other agent and see where you need to be. You can always go with the first offer. And then after one thing leads to another a counter offer will come back to you (after you have insulted the owner) Most likely at full price. Best of luck

Answer 5

You need to know how long the house has been listed on the market. Then you need to know if you are buying the house already under market value.

Once you find the answers to those two statements; then you will have more of a calculated game plan when making an offer. So you need to do a little research.

Your response will be based on the research; but its either a No or yes depending on the research

Answer 6

Definitely some good points to consider in the posts above; you should consider enlisting the help of an experienced Buyer's Agent to advocate your side of the transaction.

An ethical and experienced real estate Buyer's Agent will provide you with background information you'll need to make an *informed* decision on your offer price - as well as recommend tactics on leveraging seller concessions which will ultimately result in the price you offer for the home. Buyer's Agents are typically paid via a commission split with the seller's agent at closing, so there are rarely any fees to the Buyer for their services, and they will represent YOUR best interests throughout the transaction.

Most sellers will flat out reject offers that come in too low, with multiple contingencies and/or require too many seller concessions that detract from the purchase price. While shopping mortgages, ask lenders about the ability to "buy down" their stated interest rates, and if it's permissible to have seller contribution fund the "buy-down". A very powerful seller concession I pursue while negotiating on behalf of my Buyers is, rather than (or in addition to) paying cash at settlement to offset closing costs, seller pay points so that the buyer can get a lower rate. For example, 1% of a $160K asking price is $1,600 and 2% is $3,200. If one were able to negotiate just 1 point in seller concessions to "buy down" a Client's mortgage rate, that would equate to a $158,400 purchase price (on a full-price offer, which looks good to the seller) and would yield a potential buyer benefit worth far more than asking the seller to help pay other closing costs at settlement. Double that benefit for 2 points, triple for 3, etc... and factor that savings over the life of the loan, and you'll see how much it's ultimately worth...

The point is to create an offer that the seller will consider, but one that also employs several factors that will ultimately benefit the buyer. Those taken together with the property's background info the Buyer's Agent is able to produce will ultimately result in an offer & price you are comfortable with.

Good Luck!

Answer 7

Your offer price has NOTHING to do with "asking or list" price. Just because the seller WANTS a certain price or thinks that their place is worth XXX; has NO repeat NO affect on any offer I may make.
What you need to do is decide what the place is worth TO YOU. Are you buying it for a rental and need to estimate cashflow? Are you buying it for appreciation growth? Are you buying it for tax reasons? Instead of working off the numbers the seller would LIKE to get; work of what price will make YOU a profit IF you were to rent it out, or what price you could pay for the place and still turn a profit if you have to resell in 2 years.
Find out how long the current owner has owned the house, what did they pay for it when they bought it, how long it has been on the market, WHO the seller is and why are they selling. Is it a bank selling a foreclosure? Is it a private person who overpaid for the house and MUST sell due to adjustable rate morgage? Divorce? Job loss?
Once you decide what YOUR number is to make the purchase a good INVESTMENT; then try to see what the seller's motivation is and why they are selling and how long they have been trying, have they dropped the price from first listing? How is the rest of the market in your area and how does this property compare to others on the market.
The realtor you SHOULD be using to help you can get most of this information for you for free; and here are a few numbers to show you what is possible atleast here in Las Vegas, NV.
4 bedroom house sold in Feb. 2006 for 300K. Foreclosed by bank for 255K; the bank listed house for 320K, dropped price to 299K, dropped price to 240K, and I offered 152K. Bank rejected but countered with $169,900. I accepted. House needed 5K in paint and small repairs. Did I mention that this house also has pool?
So I offered 51% of last purchase price, I offered 59% of the amount they foreclosed on. Bank ACCEPTED net of 155K on a house they foreclosed for 255K. That's a bank LOSS of 100K and additional loss of commisions, court costs, closing costs, title fees, etc.
Since the asking price of YOUR house is 160K; depending on the situation and local market I MAY offer 90K.

Answer 8

The response is...if you don't know, then you need a Realtor.

They aren't giving you a 3% commission discount for not using one...so you need to get what you are paying for.

If the home is listed by an agent, understand that the agent is NOT your friend....she represents the sellers.

Answer 9

Haven't thought about it

Answer 10

if a house is 160,000 and I offer 147,000 will they take my offer.