Several times in the past few months people coming through an open house have mentioned that their agents are not willing to make offers for less than about 2 percent below list price. Last week one of these people said her agent made her feel like an idiot for wanting to make an offer 7 percent below list price.
This isn't surprising - Davis is a desirable community and our agents generally do an excellent job of pricing their listings. But is it true that making an offer more than 2 percent below list is a waste of time?
The buyers I was talking to were looking in East Davis, which has most of the affordable (by Davis standards) homes and so is a place that first time home buyers consider. People use different definitions for East Davis, but mine is Davis east of L Street, west of Mace Ranch, north of 5th Street and south of Covell. In July, 7 houses sold in this area - how did the buyers do?
List Price Selling Price Percent below List
$300,000 $274,000 8.67
$299,900 $280,000 6.64
$347,000 $335,000 3.46
$384,900 $378,000 1.79
$427,900 $419,000 2.08
$439,900 $430,000 2.25
$518,000 $519,000 0
Judging from this very limited sample buyers might be able to get a good discount on low end houses that need substantial work and a limited discount off list for mid range homes in good condition. But since these numbers show that a 2 to 3 percent discount off list is possible buyers in this market shouldn't hesitate to offer 4-5 percent below list price for these homes but be prepared for a counteroffer.
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