On a recent airing of the Today show, a viewer named Lauren from Boulder, CO, e-mailed a question to real estate guru Barbara Corcoran. Lauren asked, "We want to buy a home in Boulder, CO, and I've noticed many properties have been on the market over 60 days. How low of a bid is appropriate on $500,000 house on the market over 60 days? I don't want to bid too high or low." Ms. Corcoran quickly knocked some sense into the e-mailer, saying that deciding to make a low offer based on the number of days on market is nonsense. The best gauge of whether a low offer might be accepted is the seller's motivation. Moreover, in a "rising market" (her words, not mine) such as Boulder, putting in a lowball offer will only result in frustration and having to bid higher the next time around. She recommended 10% as the most under the worth (note she said "worth", not asking price) of the house that you should go.
I agree that the seller's motivation is the key factor in whether a low offer is going to be accepted. If a seller doesn't have to sell, they're not going to even bother responding to a lowball offer. As for the suggestion to not go more than 10% under asking, I think that's a good ballpark number for the absolute lowestyou should go in the Boulder market. Even at that point, though, you're risking offending a seller, because we really don't see things selling for 10% under asking much in the Boulder market.
I think it comes down to this: if you love a place, don't mess around hoping to get a bargain on it. Have your Realtor help you do your homework in determining what the right price is for YOU. If the home is a stretch and all you can manage is 90% of the asking price, it can't hurt to try. Maybe you can draft a letter to the seller explaining the rationale behind the low offer. But be aware: if you see something you love, you can almost be guaranteed someone else will love it, too. Don't take the chance that they'll love it enough to bid you right out of your dream home.
Here's the link to the video (Boulder part starts at about 1:40):
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