Profile picture for knickknack

How low do we go? (in making an offer)

We are interested in a $420k home, but we saw (thanks to Zillow) that the Zestimate amount of the house is actually $414k.  Considering that the seller will probably present a counter-offer, how low should we bid?

We'd like to go as low as possible, and then not ask the seller to share the closing costs so our monthly payments are less, but will the seller go for this, and will we get a good deal out of it in the long run?
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December 23 2008 - Greece
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Replies (10)

Profile picture for clayton790
Keep in mind an Zestimate is not the actual market value. It could be right on, or could be off by tens or hundreds of thousands.

I'd get a local expert to put a value on it.
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December 23 2008
Profile picture for Mr Caveat
home prices are expected almost across the board to fall a minimum of 15% over the next year.

rather than looking at comps, or in addition to:

step 1)
go into the history of the house and good neighborhood comps and try to eliminate the asset "bubble's" prices. go back to 2001 or earlier and then add in 3% a year.

step 2)
look at the last 6 months, have there been price reductions? have they been whopping 200k the end of the world price cuts? 5k look at this house price cuts? basically if there is no indication that prices are done falling, they probably aren't assume this is going to last 12 months more and price in the risk.

step 3) place an offer that makes sense in light of this historical data. forget the minor concessions, you will come out more ahead from the pricing game, if they counter, you can throw in concessions in your counteroffer( they say 380, you say 370 + closing costs&you want the banister downstairs fixed.) it doesnt matter if they will go for it or not, you should pay what you think the house is worth. not a penny more!
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December 23 2008
Profile picture for Mr Caveat
home prices are expected almost across the board to fall a minimum of 15% over the next year.

rather than looking at comps, or in addition to:

step 1)
go into the history of the house and good neighborhood comps and try to eliminate the asset "bubble's" prices. go back to 2001 or earlier and then add in 3% a year.

step 2)
look at the last 6 months, have there been price reductions? have they been whopping 200k the end of the world price cuts? 5k look at this house price cuts? basically if there is no indication that prices are done falling, they probably aren't assume this is going to last 12 months more and price in the risk.

step 3) place an offer that makes sense in light of this historical data. forget the minor concessions, you will come out more ahead from the pricing game, if they counter, you can throw in concessions in your counteroffer( they say 380, you say 370 + closing costs&you want the banister downstairs fixed.) it doesnt matter if they will go for it or not, you should pay what you think the house is worth. not a penny more!
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December 23 2008
Profile picture for lowbuyer
NTETS...that means the condo I was interested in, listing for almost 340k now, having sold for 150k in 1991, still has a ways to go to, huh?   ;-)
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December 23 2008
Profile picture for lowbuyer
sorry, that's 2001, not 1991!
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December 23 2008

A Realtor will answer all of the good questions you raised, if you haven't contacted one yet, do so. Many real estate transactions are highly emotional, beware offending the Seller with an unrealistic offer. They may refuse to negotiate further.

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December 23 2008
I was interested in a property listed at 160K, and told the realtor I wanted them to write up an offer of 90K.  The realtor told me that such a low offer would be insulting.  I asked them to write it up anyway.  The seller countered with 135K, then I countered with 95K, and the seller accepted that offer. In today's market, it seems that low bids are much more common than they were a few years ago, and also accepted much more often.  I know that is not a definitive answer, but I hope it helps!
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December 23 2008
Profile picture for CORONA NICK
Dont worry about offending anyone with a lowball offer, thats all they are getting now these day, at least in CA.
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December 23 2008
Profile picture for knickknack
Thanks so much for your replies, everyone!  You were all quite helpful.
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December 23 2008
I would use Realtor.com and see what other houses in the same area are being offered, also go check what the county assesor's office says the house is valued at. Most counties have this information on their web sites. Then decide what you want to offer. If the house has been sitting on the market for a while, the listing price is most likely has been lowered, so you will not need to go too low to get a good deal.
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December 23 2008
 
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