“What’s your budget?” is likely one of the first questions your realtor will ask. It’s important to know your target price point. This helps ensure you’re getting the most bang for your buck! With all budgets there’s always a “high” and “low” end. Ideally one of the goals of home buying is to get your offer down as close to your low budget end as possible, right? But how low of an offer is too low?
It depends. Offers should be dependent on many, many factors such as: the market, how long the home has been on the market, are there other offers coming in, has the price already been reduced, etc.
If you’re home buying in a seller’s market, the chance you will be successful in offering significantly below the listed price is slim. This is due to the fact that inventory is low and it is not uncommon to have multiple offers submitted on the same property.
However, home buying in a buyer’s market gives you a much better chance at getting a lower offer accepted. Check to see whether the homeowners have reduced the price on the home. Also, make sure to check how long the house has been active on the market. If a property has had a price reduction and has been on the marketing for 6+ months, feel free to go low.
Offering lower than the listed price needs to be done with tact. Put yourself in the seller’s shoes and ask yourself if you would find your suggested offer fair. If the answer is no, you might want to reevaluate your price.
A general rule of thumb is not to go lower than 25% below list price. If you do, your offer very well may be passed by without a second glance. It’s also good to include a note to the seller as to why you should be the next homeowners especially if there are multiple offers on the property.
Are you looking for a home? I’d be happy to help find your dream home and negotiate the price down. Contact me today!