This is another common question I’m asked during the home buyer process. The answer: It really depends.
There are many factors involved in coming up with an asking price. If your realtor does his job properly, he will use a variety of sources to set an asking price for your home. Of course, a realistic seller also helps tremendously. When an unrealistic seller wants to overprice his home, it would be good if realtors walked away from the listing, however many don’t, unfortunately.
The market often determines how much flexibility there is in an asking price. Back in the ‘90’s, there was much more flexibility than there is in the new millennium. Today with lower inventory and great interest rates, I'm seeing very little flexibility once again. Then again, it also depends on how accurately the home has been priced.
If you are interested in putting an offer on a property that currently has no other offers from other buyers, you’re in a good position to negotiate the asking price. You can’t just throw in some low-ball offer without a good reason for doing so, you usually won’t get anywhere. In fact, there’s a good chance you’ll offend the seller and blow any chances of having him/her work with you any further.
There are many good facts and statistics realtors use when submitting an offer below the asking price. There are a variety of other things to be considered, such as the condition of the home, and what’s included in terms of upgrades and extras that can change the offer price. Every situation is different, and you need to rely on your realtor to use his knowledge, past experience, and tools to ensure you don’t overpay for a property.
Again, throwing in a low-ball offer without backing up your reason for it will usually get you nowhere. I’ve had clients who told me to just “give it a try”. Without any backing support, there’s no point. Sellers don’t care if your offer is “all you can afford” - go buy a cheaper house. Sellers rightfully want fair market value for their home, and you would too.
It’s nice however, to have us on your side when the seller is asking more than fair market value, which is common. We’ve got the tools to prove what their home is worth, and the professionalism to ask them to qualify their asking price. When they can’t, they either get real and make a deal, or they don’t. Either way, you win.