How much lower than asking price are home buyers offering these days?

By
Real Estate Agent with RE/MAX Centre Realtors

I was talking to an agent the other day and we were discussing the current market. The buyers are taking their time and the list of features they are looking for in a first time home is longer than some move-up  buyers asked for many years ago. They hear it is a buyers market and believe they can get homes at half the listed price.

The agent was out showing homes and it seems the buyers asked her ,' Can  buyers offer $100,000 less than asking price these days? ' They were interested in a house. The houses she was showing were in the $400,000 price range. She was shocked and thought she was wasting her time with the buyers if they wanted to offer 300k for a 400k house, that was not a foreclosure. She said she could do a market analysis and help them determine a fair price.

I have met buyers who ask what the sellers will accept. They usually want to put in low ball offers. I have prepared a  letter of intent where we fill in price and contingencies and ask them to sign it and also get a good faith deposit .This works out because I would like to present an offer however low it may be and if the seller comes up with a counter atleast we know what they will consider. I explain to buyers how some sellers may be offended and not counter and if they are willing to take a chance they can make the offer. Fortunately I have not yet met a buyer offering 300k for a 400k house.

I was wondering if others are having similar experiences with buyers.

 

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Gita Bantwal is a Realtor with RE/MAX Centre Realtors in Bucks County, a Northern suburb of Philadelphia. You can view 1000s of listings on her web site www.GitaBantwal.com

 

She can be reached at 215-343-8200x124 or direct 215-275-8491 or via email gita01@aol.com

If you would like a FREE MARKET EVALUATION OF YOUR HOME IN PHILADELPHIA, BUCKS or MONTGOMERY COUNTY call me at 2152758491

 Gita specializes in Active adult communities and is a Seniors Real Estate Specialist. She holds the ABR designation (Accredited Buyers Representative) and specializes in selling to first time buyers as well as move up buyers.Gita also hold the CRS designation , Certified Residential Specialist and the CDPE designation as well. Information about real estate market is deemed to be correct but is subject to errors and omissions and should be verified independently.. Opinion expressed by me or others  in my post and comments is not to be construed to be  legal advice.I am licensed in Pa. Check real estate laws in your state as they may be different than in Pa.

IF YOU WOULD LIKE TO SUBSCRIBE TO MY BLOG         CLICK HERE   OR EMAIL ME AT Gita01@aol.com

 

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Show All Comments
Ambassador
790,501
Russ Ravary
Keller Williams Commerce - Novi, MI
Metro Detroit homes - Michigan Real estate & Mortgage info
It is not unrealistic in Metro Detroit to see offers like that.  The longer the home sits the more likely the seller is going to get an offer like that.  I had done a market update on Plymouth, Michigan.  One price range of homes were on the market an average of 431 days!  It's is a buyers market.  Sellers need to be ready to be insulted with an offer.  They don't have to accept it.  A good agent that can Negotiate is key in this market.
February 02, 2008 05:51 AM #1
Ambassador
497,504
Stanton Homes
Stanton Homes - Our family designs and builds custom homes for your family - Raleigh, NC
Design/Build Custom Home Builder in North Carolina

One of my friends had a listing recently.  Was on the market for two weeks.  Buyer came, loved it, offered $90K below list price!!  Two weeks later, it sold for 100% of list price to another couple who was thrilled to get it.  Sometimes it takes buyers awhile to realize the only true bargains are foreclosures - and even most of those in this area are selling very close to market value.

February 02, 2008 05:53 AM #2
Rainer
164,544
Gary McAdams
GMAC Schwartz Property Sales - Key West, FL
I think that is very different by different area.  In The Florida Keys if a buyer really, really wants the house they will start around 90% these days.  Three years back if you really wanted the house you just came in at full price.  No questions asked.
February 02, 2008 05:57 AM #3
Anonymous
Anonymous
Anonymous
Hi Gita,
It is a little slow here and prices are not rising but they are pretty steady.  Offers as you mentioned, are not common and definitely not accepted.  I hope we do not get there!
February 02, 2008 06:03 AM #4
Rainmaker
263,238
Jay Beckingham
Premier Nationwide Lending - Port St Lucie, FL
i'm a lender in southwest florida. the realtors i speak with say that nothing surprises them any more in regards to buyers offers.
February 02, 2008 06:17 AM #5
Rainmaker
1,847,282
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Russ, Thanks for the comments. I have read about the Detroit market . Hope it turns around soon.

Gary, I agree it is different in different markets.

Cynthia, I am glad it is pretty steady in North Carolina.

Jay, Thanks for taking the time to comment. At least there wont be appraisal issues for a while.

February 02, 2008 06:39 AM #6
Rainer
126,237
Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv
REISA - 317-663-4173 - Indianapolis, IN

Hey Gita!

Like most I feel it is based on the market. I have a co-worker that just moved to SC. While looking for a house he was shocked (BTW, he is a season mortgage pro and did over 150 mortgages in 2007) that most homes were sold for list or above and very little seller concessions. 

Now in central Indiana it is a different thing. I just finish up a mortgage for a client that was buying a Beazer spec home. Listed at $235 with a solid appraisal to support. Accepted purchase price $150 plus 3% seller concessions.

All about supply and demand.

Happy Selling!

Tony Grego - Indiana Mortgage Broker 

February 02, 2008 06:42 AM #7
Rainmaker
1,847,282
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Penny, Thanks for the comments. I am sure the market will turn around and more buyers will lose out in our area if they offer too low. I advice buyers not to fall in love with the house, that way they wont be disappointed .

Tony, I agree it is all about supply and demand.

February 02, 2008 06:45 AM #8
Anonymous
Anonymous
Anonymous
Gita, It seems lately that is the million dollar question. How much lower? I know from the Mortgage side many people come to us first before they go out and see properties. I keep get that question. I give my clients the standard answer. This is where a Professional Realtor comes in and help guides you.  All I can do is give you the money but they will be able to make you an educated offer.
February 02, 2008 06:52 AM #9
Rainmaker
630,833
Brian Block
RE/MAX Allegiance, Managing Broker/Branch Vice President - McLean, VA
Northern Virginia & D.C. Real Estate
Gita, I think it just varies by area.  In the area where I work, the average sales price is about 5-8% below the average listing price.  Therefore, initial offers are even lower.  If a home is priced to high to begin with and has been on the market a significant amount of time, I don't see any problem with buyers putting in lowball offers, because in reality, that is what the market is doing.
February 02, 2008 06:52 AM #10
Rainmaker
1,002,783
Charles McDonald
Charlottesville Real Estate Solutions - Charlottesville, VA
REALTOR®, Blogger, Principal Broker®, Owner

It is defined by area I just had a conversation with an agent on the west coast and his percentage was about 3 times lower than what we would offer on a home.

your friend in Charlottesville

February 02, 2008 07:59 AM #11
Rainmaker
44,257
Rich Quigley
Chicago, IL
Gita-No doubt buyers are looking for bargains, but $100,000 off list is excessive, unless the house was greatly overpriced to begin with. Some sellers have not taken the market conditions into consideration. After some time on the market they adjust the price or adjust their attitudes. I was working with a buyer who made an offer that was not even countered by the seller. About a month later, the seller came back with a counter and we eventually got the house for slightly more than our original offer.  It also depends on the circumstances. This happenened in December when the market was slowest and the seller needed to move. I think it is still a buyer's market, but sellers can't give the houses away either.
February 02, 2008 09:26 AM #12
Ambassador
1,531,389
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Gita, I am not seeing anything that extreme. But low ball offers can be downright silly. Not only insulting, but silly.

I did see a listing description yesterday that said offer between $525,000 and $650,000. So with that description who would offer more than $525,000. Made no sense. A buyer can offer whatever they want. Doesn't mean anything though unless the seller has a meeting of the minds.

February 02, 2008 09:41 AM #13
Rainer
59,597
Krista Fuchs
Prudential Fox & Roach - Exton, PA
Chester County Realtor - (484) 459-8025 - Home Buying and Selling

I have come across Buyers that want to totally low ball and others that just won't buy because they feel the market hasn't hit bottom.  I just continue to educate them on the state of our local market which is much better than what they are hearing nationally. 

One problem in my area are the builders dropping their pants!   I've have had offers accepted up to $70,000 less than what they list.  This has been for quick deliveries and each time I was shocked when I made the offer and the sales associate didn't bat an eyelash at the low offer.  Once new construction goes that low buyers don't see the value in resales.

February 05, 2008 08:03 AM #14
Rainmaker
1,847,282
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
Krista, Thanks for taking the time to comment. I guess I will get more buyers to look for new construction.
February 05, 2008 10:23 AM #15
Rainer
131
Blog Pennsylvania
Blogger - Carlisle, PA

February 2008

Actually, yes, it is quite normal in this housing market for prospective buyers to offer $75K-$100K less than asking price of the home. Many buyers are now using the tax assessed value as a baseline bargaining tool.

THE MARKET DETERMINES THE PRICE. So if a property has been on the market for a very long time, the property simply is priced too high. The longer a property sits on the market, the more likely buyers will submit low offers ... the longer, the lower in this market.

Some realtors and sellers wish to believe that the market has hit bottom. No, the the housing market is going to get much worse before it gets any better all across the country, and buyers are offering substantially less than listing price and fewer are budging with counter offers. Those sellers who are refinancing in an attempt to wait until the market picks us are in for quite a surprise, as the bottom of the market will not hit for years down the road.

Sad but true, an incredible number of homes are now selling for less than tax value and less than mortgage value.

February 18, 2008 09:01 PM #16
Rainmaker
1,847,282
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

It is the buyers who will determine what they want to pay.  It is not easy to refinance these days.

Welcome to Active Rain. Hope you get time  to post your profile.

February 19, 2008 04:57 AM #17
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Rainmaker
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REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
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