Profile picture for jalka10

How much is too low when making an offer on a house?

We are in Southern California. Our loan amount is $295,000. I am seeing homes in the $305k-$315k range that are either foreclosure, short sale or have been on the market for a while. One house I'm interested in is a short sale at $315k and has been on the market for months. Another house that was in the process of being sold a few weeks back, but now back on the market at $310k. Question: would it be outrageous for me to consider making an offer of $295k on either of these homes or not?
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April 24 - US
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Answers (7)

Profile picture for hpvanc
Go ahead and make the offer. There is nothing wrong with buyer's testing the market with low offers, it is no different than seller's testing the market with high listing prices, it's a business transaction. Personally I'd probably lean to bank owned over short sales, on a short sale both the current owner and the bank have to agree to your offer, which complicates things.
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April 25
Go for it, market isnt as hot as it was a few months ago...

 
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April 24
Profile picture for Dan Tabit
List price can be meaningless.  Some homes are overpriced, some are underpriced, some are in a busy market and others in a slow market.  There is no "Blue Book" where we can look up an 1992 2 story by builder X.  It's an matter of an agent and owners interpretation of the data, the level of motivation, pay offs, competition and what a buyer brings. 
Too low an offer (if the house is priced right) offends and often end a conversation.  If the home is just overpriced, then offer what it's really worth, even if it seems low. 
Your agent should provide the best data and discuss what strategy you may want to use when making your offer.  Each transaction is different.
With a short sale, a low offer may make sense, but there are no guarantees that the lienholder will accept it after you've waited many months. Counter offers can happen and sometimes the bank just forecloses and doesn't respond.  This happened to a buyer of mine a couple years ago. 
Be prepared for anything.  
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April 24

A 3% to 5% reduction does not seem out of line. If the sale price is already approved by a lender you may have to wait a bit longer for an answer depending on the bank. Good luck!!

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April 24
I would think that $15K under asking for a property that's been on the market for a long time would not be an offensive offer. It's best to check with your Realtor and get their feedback. Some short sales are only approved for a certain amount & that might be at list price. However, you never know what a seller will take until you make an offer. And if you don't at least try you may miss out on it entirely. 
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April 24
Do you have any down payment at all? If a home is $305k, and you have $10k downpayment, you are good to go.
I would say try it, why not. Usually if the area is a desirable area, the home will sell for OVER listing price. That is what I have been seeing. I would suggest to not offer more than $5,000 less than asking price.

Good luck with your home search!
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April 24
Only an expert in your area would be able to assess the situation by looking at several different factors involved with making an offer structured in that way. It may be feasible to make an offer that low, but it will require a Broker to look at the comparable properties and other factors to determine if it is a reasonable offer or not. I would be happy to refer you to someone if you need help. Take care, -Kjell  
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April 24
 
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