"How much lower do you think they'll go?"
This morning I woke to an email from a buyer who asked,
"Do you think that this house will go for the price they are asking? (the lot is large, but the house is really small) I know that they are listing it at 1M, but I was wondering if a much lower offer could stand a chance?"
This is a question I hear from many buyers, at different stages of the buying process. While there is no easy answer, no set answer, here are some of the steps needed to make an informed, educated decision:
- Your Realtor® needs to prepare a thorough market analysis to learn what sales prices have been recently for similar properties in that particular neighborhood. Square footage of the house and numbers of rooms is a starting point; also the condition of the house, the layout, the privacy factor, and other intangibles.
- A study of competing properties currently on the market is needed. If there are a many similar homes from which a buyer can choose, more flexibility in an offer price might be possible.
- An investigation as to the condition of the property is essential, as are neighborhood issues. Is high-speed rail expansion slated for nearby? Are school closings or openings imminent? What about shopping centers, half-way houses, other proposed changes?
- How long has the property been on the market? In many areas here sellers become nervous after about a month, and might be more receptive to considering a lower offer than they would have been during the first couple of weeks.
- Why does this particular house appeal to you? Are you looking for a "deal" or does this house have what it takes to make a great home for you?
- How would you feel if you lost out on this house? If the answer is "terrible" we need to figure out the value based on the above steps, and offer a fair price.