Question number one of any buyer I’ve ever worked with … what should we offer for this house?
It’s not always a cut and dried answer.
More often than not, I’ve recommended my buyers offer 10% below asking price for a home assuming the house is priced with the most recent sales.
Sometimes that percentage off will be lower if the home’s priced aggressively or has certain amenities that would be difficult if not impossible to duplicate. The number also can vary depending on where the home is compared to psychological price points. An owner who prices their home at $200,000 often is less receptive to an offer at $185,000 than someone with their home listed at $199,000. Why? Because the latter already has broken the psychological $200,000 barrier and the former has not.
Rarely do I recommend offering more than 10% off list price; if the home’s overpriced, it’s often best just to move on to the next house than to try and convince the owner a) that they’re overpriced and b) that they should take not only that much less but another 5% or so off the going market price.
My job when working with buyers is to help identify that one price where the seller at worst will counter and at best will jump at the offer. (Cash and a quick close often help, but don’t provide too much additional leverage beyond the 10% mark.)
There has been more than one house this year where I expected a counter offer only to see an acceptance coming across my fax machine. Contrary to popular belief, banks often are more strict negotiators than owners like you and me. Why? They have no emotion to interfere, positively or negatively. They look only at the bottom line.
(Banks also have no institutional memory – twice this year, I’ve seen a buyer break off negotiations, come back at the last price or close to it and then get countered well above the last counter price, as if nothing had taken place before. Bizarre.)
Just as pricing a home often is less science than art, the same goes for finding the best price to offer for a house. In these moments, experience helps.
[tags]Phoenix real estate[/tags]