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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