How much should I offer?

While it may not be appropriate to specify a recommended offer down to the penny, I think we as Realtors do have an obligation to give our clients the best, most helpful, most useful knowledge possible. And (while you weren't necessarily suggesting this) I think it's a real disservice for a Realtor to respond to that question: "I'm sorry. I can't help you. Offer what you're comfortable with." And leave it at that.

So what can we tell our clients who ask such questions?

We can run a CMA and tell our clients, for instance, "Similar homes in the past 90 days have sold for $250,000-$280,000. Adjusting for some of the features in this home versus the ones that have sold, this one might have sold for $260,000-$270,000."

We can call up the listing agent and ask for guidance. Some actually will be quite helpful. Others will say nothing. But you don't know until you ask. I've never had a listing agent tell me: "We've got an offer in for $275,000." But I have had listing agents tell me: "We've got a couple of solid offers in, in the range of the sellers' asking price."

We don't know what the seller will take . . . generally, the listing agent really doesn't, either . . . and sometimes the sellers don't. But what we can figure out is what they might be more or less willing to take. Consider: A house that's just come on the market, listed at $275,000, shows well, the comps range between $270,000 and $280,000 and the sellers bought it 6 years ago for $240,000. I'd present these facts to the buyers along with my observation that the ultimate sales price is likely to be awfully close to the listing price . . . although the buyers could, of course, make any offer they wished.

On the other hand: A house has been on the market for 120 days, listed at $275,000. It's in average condition, but could use a bit of TLC. The comps are in the range of $240,000-$250,000. The sellers bought it 20 years ago for $100,000. Again, I'd present these facts to the buyers along with my observation that when the property finally sells, it'll probably be at the low end of the comps.

As for what our buyers can afford--Hopefully, they've been prequalified up to a certain amount. That doesn't mean they'd feel comfortable spending the maximum, but that's the ceiling. And we certainly can tell our buyers: "You're qualified up to $275,000. With today's interest rates and the amount you plan on putting down, your monthly payment would be approximately $x. Is that a number you're comfortable with, or would you really plan on spending somewhat less?" And maybe they'll come back with a number suggesting that they only want to spend $265,000. We'd factor that into the scenarios above to help fashion an offer.

So I think it's important to "add value as an expert," as you suggest. But that value goes far beyond "help you make the very best choice [presumably of the property] possible."

So Tere, assume your buyers figure a price on their own.  Safe to also assume you will not be able to negotiate effectively for them, since you can't even point them in a price range.  What is it that you provide to your customers then?

Although your agent may not tell you what to offer they should pull comparables for you so you can see what homes in the area have been selling for. 

Buyers should look to their agent for council when it comes to crafting an offer. It is not difficult to get a pulse on what properties are selling for in a given area. A reasonable offer would be based on the current data that an agent can supply.