How Much Should I Offer for This House?

It's a tough and complex question in our currnet market, and I find it essential to have a discussion early on about the market, inventory, absorption and what I see happening with offers. Some buyers, however, just need to learn the hard way...that their desired approach (e.g., to never pay full price) is destined to fail. I make it clear that the choise is theirs, not mine, but I do provide as much information as possible and talk about the pros and cons and what scenarios might unfold. We never know for sure until we get into negotiations.

Some good answers.  A lot depends on the scenario/circumstances.  Sometimes our buyers may have to pay slightly more or slightly less than market value due to their situation or the sellers (new house to be built, need a longer than normal settlement, etc.).

I'm a numbers guy so I try to give them all the information up front, then work backwards from there to include all the intangible factors.

Thanks for sharing.

There is one thing you can tell them and then one question you can ask them.  You can tell them what you think the house will sell for in this market.  Then you can ask them what the house is worth to them in relation to the current market and other homes they have seen.  For investors I might change the question up somewhat to focus more on what they expect out of an invest to see if this home can deliver.  

I try to give the buyers the best information available at the time. Ultimately it is the buyers decision.

Working with different personality types is always a challenge - but you didn't get into this business because it was easy! 

I do much the same things as I do with comps for sellers. It's just data and facts, then they can decide how badly they want the home. 

Anita - Greetings to a fellow Scottsdale Realtor and AR member!  

Many of the previous responses have already thoroughly covered the subject.  I'll just reterate what you already pointed out about our specific market here, and thet the days of "fire sales" has been over for a L-O-N-G time!  It is difficult when I have a prospective buyer tell me they want a "smokin' deal" and I have to politely tell them the bottom of our local market was in September of 2011, thus the smokin' deals are but a distant memory.  I am happy to look for whatever good deal might be out there, but when they consistenlty want to offer way below market for a house I will have "the talk" with them.  Some people get it and some don't.

It's always a great idea to have the answers to the question - How will we deal with ....  - before it ever comes up right?  Some questions are property specific but if you develop a strategy going in the client won't be surprised, or offer off the wall surprises.

The fact that there are so many different kinds of clients is the challenge but also the excitment, in my opinion.  I love that no clients are the same.  It's our job to educate them so they are all the "good" ones :)

I provide clients with all the necessary tools to make the decision of how much to offer:  CMA, Sellers Disclosure, current market trends and any other applicable information.  I remind them of their budget, pre-approved loan amount, and their moving timeline.  I then discuss what happens in a multiple offer situation and what happens when a property does not appraise for the agreed upon purchase price.  Once the buyer is armed with information, they feel in control and can make an educated decision.

Love your description of the 'gotta-get-a-deal' client-some can be educated to make an offer that will work and some just search.

Wow, all great ideas and information here.  Thank you.. I give them all of the information, comps, question them on their 'comfort level' and go from there. Sometimes it works; sometimes it doesn't.   Praying does come in handy. 

Hi Anita, we agree.  We like to ask them if they lose it, will they lose sleep over it.

It is great to be in charge and to pick the value of the home but being in charge has its own reponsiblities. The house must sell at the price or it all comes down tho the person in charge.

interesting POV. I never gave that much thought when a buyer looks to you for the advice or offer amoiunt and if that opens up any liability or issues down the road or if nothing to that extent you get the blame for a suggestion to them hmmmmm

When I was active as an agent, doing the CMA took me the longest. I analyzed the information several ways including trends so that I could give the best information I could.

I present the facts of the current market and then ask the question of how bad they want the property. This does differ depending on the property and what price range it is in.

Hi, Anita,

The strategies are the same here. We are in a short inventory, seller’s market that has been going strong for over a year but is tapering off slightly. Unfortunately, many buyers interpret the slowing for a turnaround in prices. That is an error and they compound it by wanting to offer less. Our first challenge in this market is to educate the buyer.

Good afternoon Anita,

As each client is different I start with comps of similar type homes and one for homes in the area with a range from low to high and the average. If they need concessions telling them to keep that in mind.