Shopping for a new home can be really frustrating. Some homes are listed far above what you’d consider paying, and some homes aren’t worth making an offer on at all. But if you’ve found a home that you really love with a high price tag, how much can you lower that price? If you go too low, a homeowner is likely to laugh at your offer. If you offer the same amount, you didn’t get a deal at all. So, how much should you offer?
The Lowball Offer
Typically, most homes are priced with the expectation that any buy will try to get a better deal. Bargaining is almost expected in every real estate market. That said, it’s not a good idea to try make a “lowball offer.” What’s a lowball offer? Anything that’s 20% off of the sale price or less is often considered too low to be taken seriously. If you make that kind of offer, the seller is likely to laugh and toss your offer aside.
What’s a reasonable offer? That question is a bit harder to answer.
A Reasonable Offer
If we’re looking at just numbers, 10% to 15% off of a list price is typical. You can expect a seller to come back with a different offer (slightly higher), so don’t go to 15% right away. Aim for something around the 10% to 12% mark. That said – and this is a really important point – this tactic might not work in every market or with every kind of seller.
The Highly Motivated Seller
People that need to move quickly will likely accept lower offers. If you can find a seller that needs to move to a new town, simply wants to get rid of a property (due to a death or other tragedy), or needs money quickly, you may be able to get a really good deal. However, the opposite is also true.
The Casual Seller
Some sellers put homes on the market simply to see what they could get. In the same way that some people shop for homes without any real intention to buy, these sellers aren’t actually expecting to sell quickly. They just want to see how much a home is worth, so that they can make any necessary improvements or renovations, and then sell the home for much more in the future. If you run across this type of seller, you won’t have much bargaining power.
The motivation behind a home sale isn’t the only thing you have to think about, though. Whether or not you can get a really good bargain also depends on the area that you are considering.
The High Demand Property
Have you ever wondered why 500 Square Feet in NYC sells for around $700,000? It’s not because the house is fantastic (in fact, it might be in shambles). It’s because of the actual property – the land that a house sits on. If the homes you are looking at are in a desirable neighborhood, you can expect to have less bargaining power and pay a bit more. The same amount of space in a less desirable neighborhood may sell for just $100,000.
All of these things have to be taken into consideration when you are shopping for a home. How can you find out how much you should actually offer a seller? Go with the 10% to 15% off of the listing price strategy. At worst, your offer will be declined, and it wasn’t meant to be anyway (right?). If you want to play it safe, though, you can always knock off a small 5% or less.
Making Your Move
When it comes time to move to your new home, you’ll need some moving and storage help. That’s where we come in. At Exodus Moving and Storage, we’re experts at moving to Fort Collins, Denver, or anywhere else in these areas. We also offer storage solutions, and we can help you every step of the way from packing to unloading.
Once you’ve found that perfect home and made the right offer, give us a call. Moving is what we do, and we’ll make sure to take care of all of your moving needs.