The million dollar question! You've spend the last three weeks looking at homes, narrowing them down to two or three of your favorites and going on second viewings of your top three. You are now ready to make an offer on the one you want to call your own. This is when the million dollar question arises,"How much below list price should I offer?"
Let me start by mentioning real estate is local, the answer to this question is based on market trends for the local area in which you are shopping. This being said, I'm focusing my answer on our local market, Slidell, Louisiana and the Northshore.
Motivated sellers aren't listing their homes, going through the motions of keeping it in showroom condition and accepting the fact that 'strangers' are viewing their properties on a regular basis just for the fun of it. They are doing this because they have a motive... to sell their house. Therefore, they know in order to receive an acceptable offer, they have to have showings.
How do they get these 'showings' you say? For starters, by listing the property at an attractive price, a price in which an educated buyer will use to compare many properties listed in a particular price range to determine which property will give them the most bang for their buck!
Now, think back to the beginning stages of this process. You consulted with your buyers agent to discuss with them your mission. You had 'must haves,' 'nice to haves,' and 'absolutely must-not haves.' And.... you had a price range. Your agent went to work, searching for and selecting the cream of the crop, the properties that best met your criteria AND your price range. You viewed them all, compared them apples to apples and have now selected the property that most fits your needs AND your budget. This was not random, this was work and effort on your part to become an educated buyer, you weighed out your options and you made a decision.
Now, on the other side of the table there is a seller who through his agent did the same thing. There was a reason you selected this home ... in addition to the fact it suited your needs cosmetically ... it was also priced right!
So, back to our question... "How much should I offer below list price?"
For the past 4 years the median list price- vs - sold price in our area has hovered just at 96.4%. = 3.6% off of list price. This answers the question "How much can I realistically buy this house for?" How much you should offer, on the other hand, depends on whether or not there are other buyers eying the same property.
If you aren't risking a multiple offer situation and you you prefer to play the game just to see if seller will go lower, offering 6-7% below list price will usually get a response. Seller may go ahead and accept it because it is only a few percent less than they anticipated or you more than likely will end up with a counter offer from seller of 3-4% off of list price.
If, on the other hand, the house has shown multiple times in the last week, you may want to rethink your initial offer. Keep in mind another potential buyer may very well make their initial offer at 3-4% below and win the bid.
So, there you have it. You can usually expect seller to accept 3.6% off of list price in our market based on local market statistics.
As always, feel free to Contact Me to introduce yourself! Let's get acquainted and see how I can be of assistance to you!
I'm an active Buyers Agent as well as Listing Agent and the Broker/Owner of Smith Realty Group.
Happy House Hunting,
-Karin :)
