How much lower than asking price are home buyers offering these days?

It is not unrealistic in Metro Detroit to see offers like that.  The longer the home sits the more likely the seller is going to get an offer like that.  I had done a market update on Plymouth, Michigan.  One price range of homes were on the market an average of 431 days!  It's is a buyers market.  Sellers need to be ready to be insulted with an offer.  They don't have to accept it.  A good agent that can Negotiate is key in this market.

One of my friends had a listing recently.  Was on the market for two weeks.  Buyer came, loved it, offered $90K below list price!!  Two weeks later, it sold for 100% of list price to another couple who was thrilled to get it.  Sometimes it takes buyers awhile to realize the only true bargains are foreclosures - and even most of those in this area are selling very close to market value.

I think that is very different by different area.  In The Florida Keys if a buyer really, really wants the house they will start around 90% these days.  Three years back if you really wanted the house you just came in at full price.  No questions asked.

Hi Gita,
It is a little slow here and prices are not rising but they are pretty steady.  Offers as you mentioned, are not common and definitely not accepted.  I hope we do not get there!

i'm a lender in southwest florida. the realtors i speak with say that nothing surprises them any more in regards to buyers offers.

Hey Gita!

Like most I feel it is based on the market. I have a co-worker that just moved to SC. While looking for a house he was shocked (BTW, he is a season mortgage pro and did over 150 mortgages in 2007) that most homes were sold for list or above and very little seller concessions. 

Now in central Indiana it is a different thing. I just finish up a mortgage for a client that was buying a Beazer spec home. Listed at $235 with a solid appraisal to support. Accepted purchase price $150 plus 3% seller concessions.

All about supply and demand.

Happy Selling!

Tony Grego - Indiana Mortgage Broker 

Gita, It seems lately that is the million dollar question. How much lower? I know from the Mortgage side many people come to us first before they go out and see properties. I keep get that question. I give my clients the standard answer. This is where a Professional Realtor comes in and help guides you.  All I can do is give you the money but they will be able to make you an educated offer.

Gita, I think it just varies by area.  In the area where I work, the average sales price is about 5-8% below the average listing price.  Therefore, initial offers are even lower.  If a home is priced to high to begin with and has been on the market a significant amount of time, I don't see any problem with buyers putting in lowball offers, because in reality, that is what the market is doing.

It is defined by area I just had a conversation with an agent on the west coast and his percentage was about 3 times lower than what we would offer on a home.

your friend in Charlottesville

Gita-No doubt buyers are looking for bargains, but $100,000 off list is excessive, unless the house was greatly overpriced to begin with. Some sellers have not taken the market conditions into consideration. After some time on the market they adjust the price or adjust their attitudes. I was working with a buyer who made an offer that was not even countered by the seller. About a month later, the seller came back with a counter and we eventually got the house for slightly more than our original offer.  It also depends on the circumstances. This happenened in December when the market was slowest and the seller needed to move. I think it is still a buyer's market, but sellers can't give the houses away either.

Gita, I am not seeing anything that extreme. But low ball offers can be downright silly. Not only insulting, but silly.

I did see a listing description yesterday that said offer between $525,000 and $650,000. So with that description who would offer more than $525,000. Made no sense. A buyer can offer whatever they want. Doesn't mean anything though unless the seller has a meeting of the minds.

I have come across Buyers that want to totally low ball and others that just won't buy because they feel the market hasn't hit bottom.  I just continue to educate them on the state of our local market which is much better than what they are hearing nationally. 

One problem in my area are the builders dropping their pants!   I've have had offers accepted up to $70,000 less than what they list.  This has been for quick deliveries and each time I was shocked when I made the offer and the sales associate didn't bat an eyelash at the low offer.  Once new construction goes that low buyers don't see the value in resales.

February 2008

Actually, yes, it is quite normal in this housing market for prospective buyers to offer $75K-$100K less than asking price of the home. Many buyers are now using the tax assessed value as a baseline bargaining tool.

THE MARKET DETERMINES THE PRICE. So if a property has been on the market for a very long time, the property simply is priced too high. The longer a property sits on the market, the more likely buyers will submit low offers ... the longer, the lower in this market.

Some realtors and sellers wish to believe that the market has hit bottom. No, the the housing market is going to get much worse before it gets any better all across the country, and buyers are offering substantially less than listing price and fewer are budging with counter offers. Those sellers who are refinancing in an attempt to wait until the market picks us are in for quite a surprise, as the bottom of the market will not hit for years down the road.

Sad but true, an incredible number of homes are now selling for less than tax value and less than mortgage value.