Special offer

Dear TZ - How do I know how much to offer on this house?

By
Real Estate Agent with Remax First Realty II 0790808

Dear TZ,

We love the house you showed us over the weekend. It's perfect for us. But the asking price seems a little high. Is it overpriced? Can we offer 85% of the asking price?

~ LowBall Larry

 

Dear Larry,

You can offer whatever you want for a home, and the seller has the right to either accept your offer or reject it.

If you want to actually buy the house, though, you need to offer to pay what the house is worth. Homeowners have access to the same information as you do - they know what their home is worth and may settle for 85% of the list price but likely aren't going to settle for 85% of the value.

How do you find out what a home is worth? Your REALTOR (R) will do a Comparative Market Analysis. This is free of charge and provides you with a good estimate of what the home will sell for.

If the CMA shows that the price is right, then offering 85% will likely lose you the house. The sellers may be so insulted by your offer that they refuse to negotiate with you, or they may feel that your offer isn't serious enough to warrant consideration. If the comps show that the house is overpriced, then you want to present the comps with your offer, explaining why your offer is so much lower than the asking price. 

Good luck! 

~ Team Zuhl

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~ Wayne & Jean 

Union County, NJ - a great place to live and work!

If you're looking to buy or sell a property in Union County, call us at 908-917-4189 or email TeamZuhl@gmail.com.

 

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All opinions, information and data provided is deemed reliable but is subject to errors and omissions. Not intended to solicit other Brokers' clients. We cooperate with them fully. 

Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Wayne & Jean.  This is classic!  I love your response.  I just might have to remember that ... great answer!  Question:  Did they decide they liked the house enough to write a fair offer?

Aug 17, 2014 03:54 AM
John Meussner
Mortgages in AZ, CA, CO, DE, FL, GA, IN, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI - Fair Oaks, CA
#MortgageMadeEasy Fair Oaks, CA 484-680-4852

Good advice for lowball Larry.  Smart pointing out they they may accept 85% of list, but not 85% of value.

Aug 17, 2014 04:08 AM
Wayne Zuhl
Remax First Realty II - Cranford, NJ
The Last Name You'll Ever Need in Real Estate

Diana Dahlberg - Most buyers are mostly interested in buying a home. If the difference in price comes out to only $20/month, for example, few buyers are willing to let their home go by.

Thanks, John Meussner. Sellers are educated about home values just as much as buyers are.

 

Aug 17, 2014 05:00 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

The other problem of using a very low price you are likely to be discounted by the seller.  The seller is likely to think you are not serious and be a bit upset with the offer.  That results in the buyer paying more not less.

Aug 17, 2014 05:21 AM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Wayne& Jean: 

I totally agree.  I have never had a buyer not understand the concept of paying $5,000 more at a cost of 4-5 dollars per thousand they are borrowing ... $20 to $25 is pallatable and not worth losing their dream house over.  Thanks again!

Aug 17, 2014 05:47 AM
Diana White-Pettis
Bennett Realty Solutions - Upper Marlboro, MD
GRI, CDPE, CNE, WHC Upper Marlboro Homes for Sale

Great response.  Sellers are just as savvy as buyers in accessing home value information.  As a result, to submit a low ball offer is very risky for the buyer and insulting to the seller.  This can mean the difference between an acceptance and a rejection for the buyer and a low ball offer is not be worth losing the home you truly want.

Aug 17, 2014 11:57 AM
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

Wayne & Jean, great advice for all agents to learn when we are dealing with low ballers.

Aug 19, 2014 04:29 AM