I think it would depend on a lot of things. How long have they being try to sell the house? Have they reduced the price already? How much is the house?

Personally any house under 200K, I would consider 10% under list price insulting, if the house was relatively new to the market and/or I had reduced the price already. But that's just me others may feel differently.

Make your offer based on a fair market price, not a percentage of list price.

lorac07 - tell me what is more important to you? (a)Pay the fair price within your budget and be able to sleep at night without financial stress or(b) go out on a limb and overpay for the house just to make sure that seller does not feel 'insulted'?

List price means nothing. Best approach will be determine the fair price and go from there. Treat it as a business transaction and keep emotions out of the way.

You may wish to use the search option ( towards the bottom ) of the page. Try looking up "lowball" or similar keyword and see what you can dig up.

If the asking price is 500k and you bid 410k and they come back with 490k, will you be insulted? If not, then give a bid, it won't hurt. You need to do research before bidding, look at comps or is there a reason why you feel you should give a much lower bid like work needs to be done etc.

I just sold my house after it had been on the market for nine months (metro Detroit). We started at $360 and dropped twice to $335. Out buyers first offer to us was for $265 (a 20% difference), and we weren't insulted in the least. I think the realtor was more upset than we were!

I certainly couldn't blame them for trying to see how motivated we were. As it turned out we weren't as motivated as they had hoped. We ended up settling at $315, which is 6% below asking price and the average in this market. So my advise is to go ahead and lowball, but be prepared to come up a lot if you really like the house.

Because the media has made such a huge deal about the buyer's market we are having, buyers are expecting to walk into a house and snap it up for 25% below asking price. They aren't realizing that this depressed market is already being reflected in the asking prices.

Nicole

I totally agree with other posters. You make your offer based on FAIR market value, not on the asking price.
Find out what sold recently, consider all factors i.e. location, shape of the house, extras. Find the closest comparable & go from there. Offer a little less to leave room for negotiations.

Sometimes a comp is not a comp, although it may be indentical to the house your purchasing. There are circumstances where buyers sell for a lot less. If there is an emergency to sell, time of the year & other, the price usually drops tremendously because the owner needs to get out quickly. You cannot use that as a true comp.
Those are the things that you consider when making an offer based on comps.

I find asking prices are all over the place. Many buyers assume that everybody prices their homes too high because they are not familiar with close comps.

Example: I went to an Open House yesterday. The house was overpriced by at least 100k. These people just put it on the market & threw up a figure, thinking the RE is appreciating like it did in 2004. If I were buying that house, I would make an offer for 120k less than the asking price.

When I was selling my house, I already priced it 20k (579k instead of 599k)below comps. I would have been insulted with any offer for less than another 30k (550k) below asking. At that point, I figured 10% below what the true comparable was sufficient for the buyer. That's exactly what happened. I sold it for 550k. They got a good buy & I did ok, seeing that I needed to sell & it was in the dead of winter.

Had I been selling in the spring, I would have wanted closer to my already lower than comps asking price. I may have settled around 569k.

"my brother is 'my agent'"

Tell him to get off his rear and find you some decent comps that sold recently.

Our house was on the market for three days & we got an offer of 50%! We countered by taking a couple of thousand off the original asking price, the buyer came smartly up to the plate & we ended selling (in a total of five days) for about $5000 under asking price, in a dead neighborhood in a dead regional area. Don't know what they were thinking at first; apparently they just offered what they had in their checking accounts. But, we didn't take offense, and are ever so happy that we didn't. That house could easily have sat for months, even years.

Kate, sounds like you did good!

"my brother is 'my agent'"

Tell him to get off his rear and find you some decent comps that sold recently.

Have to agree. Do a search of this forum for realtor friend or something to that effect. Mixing business with friendship / family doesn't equal good.

We were going to use the realtor that sold this house to my husband over 20 years ago; but after being here & reading about how friendships sour; we wrote her a letter, telling her we were sorry but that the friendship was worth more to us; and it is. I hope she understood as I'm not sure since she never returned a reply. This is what we had to do because we need someone that meets our needs, I didn't want to find out after it was too late...

happykate-"Our house was on the market for three days & we got an offer of 50%! "

happykate, I applaud your decision to go ahead and counter with a more reasonable price rather than throw the whole deal away.

We bid on a house that originally listed for 284k. It was more than the comps. so we sent the owner a letter offering 249k cash. He accepted.

We had the inspection and it came back with many areas that would need repair (leaky roof, ancient furnace, etc) so we dropped our offer to $245k.

The owner got angry and raised the price back up to $269k. We walked.
The house sat on the market for another 8 months and eventually sold for $242k. We might have held with our original offer if he hadn't got so testy.