How Much Below Asking Price Can You Expect To Get A Home For Now

By
Real Estate Agent with Maximum One Greater Atlanta Realtors

Almost every client of mine has asked me at some point, How much below asking price can we expect to get a home for.  The public seems to have the perception that a good deal on a home is based on how much you get the seller to come down off their asking price.  In reality, the difference between the two prices has NOTHING to do with what is a good value or not.

For example, I can take the same exact home, price it at $300,000 and let a buyer negotiate it down to $250,000.  The buyer will feel like they got a great deal because the caused me to come down $50,000.  However, if I list the exact same home with a $250,000 asking price, most buyers will refuse to pay full asking price because they hear that the market is bad.

The truth is that in order to determine what is good value, one needs to ignore the asking price and do the research to know what the home is really worth.  Asking prices should be used merely to limit your search to an appropriate range.  When it comes time to make an offer, you need to do some research to see what the home is really worth and make your offer based on that.  I have come across several cases where a price more than $100,000 below asking is a fair price.  I have also seen many where you'd be getting a bargain even at a full price offer.  This is the point at which an experience Realtor(r) who knows your LOCAL market can really help you as I do for all of my clients in the Cobb County, Georgia Area.

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Rainer
26,594
Spencer Hill
Hill Asset Management - Kingstree, SC
#1 Financial Planner -- South Carolina

You make some very good points about correctly pricing a home in this market. The argument about lowballing is a moot point when a home is priced correctly. The law of supply and demand drive local market prices. If there are a bunch of REOs and foreclosures they will depress the market, let it happen don't fight the trend,  the market will stabilize quicker.

June 06, 2008 08:02 AM #1
Ambassador
492,349
Brian Schulman
Coldwell Banker Select Professionals, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552

The answer depends on many factors, including how motivated the seller is about selling, and how much the seller owes on their mortgage.  Sellers who are asking unrealistic prices may be unwilling to come down, even if their homes stay on the market for many months.

June 06, 2008 08:03 AM #2
Rainmaker
856,352
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

I agree with the other comments market value will seek it's on level, based on area comps over-price the property and you'll get large swings in offers priced correclty and it will sell close to asking price. Steve

June 06, 2008 08:12 AM #3
Rainmaker
240,126
Palm Coast Homes
Prudential East Coast Real Estate - Palm Coast, FL
Palm Coast/Flagler County Real Estate, The Ross/Co

This is such a generalized question and it is starting to get pretty old.  The truth is that real estate is still very local and even within your own area...prices will fluctuate dramatically between neighborhoods...it is basic economics...supply & demand. This is a question that cannot have a blanket answer...I guess we need to do a better job of educating the consumer :-(

June 06, 2008 08:23 AM #4
Rainmaker
1,035,209
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

You are absolutely correct and this is very difficult to explain to some buyers.  I wish more would understand exactly the point you have made here.

June 06, 2008 08:25 AM #5
Rainer
134,620
Michael Shankman
Realty One Group - Las Vegas, NV
Selling Las Vegas 702-498-3383

good post...it all depends on what the home is listed for...good agents will know if it is a good deal or not.

June 06, 2008 08:26 AM #6
Anonymous
Anonymous
Anonymous

it is in your best interest (as a realtor) to keep prices high .  Especially if you don't see to be inflating them .

October 25, 2008 10:05 AM #7
Rainer
22,491
Matthew Share
Maximum One Greater Atlanta Realtors - Marietta, GA

Please clarify why it's in my best interest (as a realtor) to keep prices high.  If you are referring to the fact that we get paid as a percentage of the selling price, I have calculated out that for every extra thousand dollars that a home sells for, I receive about an extra $10 in my pocket.  That is also looking at one isolated transaction.  in reality, I actually prefer if prices stay low.  The more affordable homes are, the larger the pool of potential buyers and therefore the more potential clients there are that I can work with.  What you are saying is analagous to saying that stock brokers want to keep stock prices high.  Realtors have less control over home prices than stock brokers have over stock prices.  Prices are determined by market conditions and economics only.  So, please think about what you're saying here.  I would argue that if we had any control over prices, realtors would actually prefer prices to remain low.  However, the truth is that we have absolutely ZERO control over prices.  Our role with price is simply to understand the local market dynamics and advise our clients on how to price their home to meet their individual needs.

October 26, 2008 09:31 AM #8
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Rainer
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Matthew Share

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