When bidding on a house

[haydensmom]

How much off of the asking price is acceptable to offer?

[jodi]

As a real estate agent, I have worked with people who assume they should take 10% (or 25% or whatever price they have heard) off from the asking price. I have never found a set rule. There are too many factors to consider, such as:
-Is this a neighborhood where houses are selling fast? If so, you might want to offer full price, or even above the asking price, if you think the house is worth it.
-How long has it been on the market? A house that has sat for 6 months will have owners more willing to negotiate than one that is new to the market.
-What are the terms of your offer? A cash offer would warrant a lower offer as there is a quicker closing with less hassle for the sellers. On the other hand, with a Nehemiah or Ameridream offer (where you are in effect asking the sellers to pay some of your costs), you would want to bid higher to compensate the sellers for the extra difficulty and costs involved.
-Is the house priced fairly? Get your real estate agent to help with this by doing a comparative market analysis of what other COMPARABLE houses have sold for. If you don't have an agent, see if you can find comparable house sale prices in the tax records.
-How quickly do you want to close? If you are asking the seller's to wait an extra month to close so your kids can finish school, for example, then your offer should reflect the inconvenience and risk to them.
-Are there any special conditions in your contract? Again, if you are asking the seller to do something out of the ordinary, you should compensate them.
-Why is the owner selling? Someone who has to move quickly is more likely to look at a lower offer than someone who is downgrading to a smaller home and has all the time in the world.
I have written offers for anywhere from 25% less then asking price to over asking price, depending on the circumstances.

[Fern]

There's no need to guess.

Ask your realtor for a printout of the listing and selling price for all the houses that sold in the town you're looking in for the past 3 to 6 months, say within a given price range to narrow it down even further.

Then get your calculator out and figure out the percentage of selling price that the asking price represents. Do this for each property in the print-out, then figure out the average. Depending on your area, it could be 90% or it could be 97%, really depends.

Base your initial offer on the low end of the % of selling price other homes have sold for recently. Work your way up from there if you have to, or if you really love the house.

[jodi]

That method may be a way to get a rough idea, but I don't think it will be representative. I imagine you would still get figures from too much of a range to speculate. Some people want a quick sale, so they price their home low. Consequently, they will probably get 95-105% of the asking price. Others price their home very competitive, so they may get 90-100%. Some people want to get the most money possible, even if they have priced their home way above others in the market. They may have to lower their price several times before they find a buyer, so they may only get 70-90% of their original asking price.
If you just look at the final sale price, it won't reflect the original asking price (only the final asking price) or if the seller paid any of the buyer's costs, which can artificially inflate the sales price. For example, if the sales price is $100k on a house that was listed at $100k, but the seller kicked in $6k towards closing costs (not too uncommon in today's market), then a house that looks like it sold for 100% of the asking price really sold for 94%. If that same seller originally listed his house for $120k, then the house sold for a much smaller percentage of the asking price.
Maybe I'm getting a little too technical here