How low is too low?

KappaK · February 2012

DH and I found a house that we really like. Right now, it is listed more than $60,000 over what it has been appraised at, and over $30,000 the fair dale price (all the numbers came from the government property appraisal site). Even if we were to offer them the fair sale price, that is still 15% under asking price. I have read that is considered an insult, and that you shouldn't low ball that much.

My question is, how low can we offer without seeming like we are insulting the home owners, all while making sure we can, possibly, get a fair price for this house?

Sisugal · February 2012

You want to talk with your realtor for advice. Look at recent comps and then go 5-10% lower for your offer.

JoeLies · February 2012

Unfortunately you have no way of knowing the sellers' mindframe. They could see the comps, realize their mistake and start negotiations. Or they could be highly emotional and disinterested in reality and stonewall you - sadly a situation DH and I recently found ourselves in. We submitted the comps used to determine our offer and I think that's really the best you can do. They'll either play ball or they won't, but you'll never know if you don't try.

atlcatlover · February 2012

KappaK:

DH and I found a house that we really like. Right now, it is listed more than $60,000 over what it has been appraised at, and over $30,000 the fair dale price (all the numbers came from the government property appraisal site). Even if we were to offer them the fair sale price, that is still 15% under asking price. I have read that is considered an insult, and that you shouldn't low ball that much.

My question is, how low can we offer without seeming like we are insulting the home owners, all while making sure we can, possibly, get a fair price for this house?

Do you mean the tax assessment? That is much different and is unrelated to the appraised value.

KappaK · February 2012

atlcatlover:
KappaK:

DH and I found a house that we really like. Right now, it is listed more than $60,000 over what it has been appraised at, and over $30,000 the fair dale price (all the numbers came from the government property appraisal site). Even if we were to offer them the fair sale price, that is still 15% under asking price. I have read that is considered an insult, and that you shouldn't low ball that much.

My question is, how low can we offer without seeming like we are insulting the home owners, all while making sure we can, possibly, get a fair price for this house?

Do you mean the tax assessment? That is much different and is unrelated to the appraised value.

I don't think so, but I am admittedly not very educated in this area. The house is listed for $225,000, but Just/Market Value is listed at $163,587 and the Sales Comparison is $192,500.

MNVegas · February 2012

How did you get appraisal value information? Usually a lender does not order an appraisal until an offer has been accepted. If you are talking about tax assessment value, then you are looking at the wrong number. Assessment value is not the same as appraisal value.

Have your REA run sold comps and base your offer on that information.

CCinLove · February 2012

You should definitely take this question to your realtor. The government doesn't really appraise properties, other than tax assessments. Those are always lower than the value of the home, so you would absolutely be lowballing if you used the tax assessment. Recent sold comps are going to be the best indicator of how much the house is worth.

EastCoastBride · February 2012

KappaK:

I have read that is considered an insult, and that you shouldn't low ball that much.

You need to focus on what you feel is a fair price for the house and what you're willing to pay for it.

Yes, I've sold a house, and yes, it's emotional and I could say I was "insulted" by the first offer - but the reality is it's a BUSINESS transaction and honestly..... I wouldn't worry all that much about "insulting" them.

If they actually did price themselves significantly above comps and what it would appraise for, are you really going to pay more for the house just because their feelings might be hurt because THEY feel their house is worth more than it actually is?

AbeFroman · February 2012

EastCoastBride:
KappaK:

I have read that is considered an insult, and that you shouldn't low ball that much.

You need to focus on what you feel is a fair price for the house and what you're willing to pay for it.
Yes, I've sold a house, and yes, it's emotional and I could say I was "insulted" by the first offer - but the reality is it's a BUSINESS transaction and honestly..... I wouldn't worry all that much about "insulting" them.

If they actually did price themselves significantly above comps and what it would appraise for, are you really going to pay more for the house just because their feelings might be hurt because THEY feel their house is worth more than it actually is?

I really like this response! Remember a home is only worth what someone is willing to pay for it, regardless of what the seller thinks. I never worry about insulting a seller. If they don't what to negotiate with me, that's fine. There will always be another house.

How low is too low?

Re: How low is too low?

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