Realtor says my offer would be an insult

[iced]

It's definitely market-dependent. Where I live, properties typically sell for more than asking price and if its priced reasonably, it's off the market in less than a week.

If it's a seller's market, lowballing does what has been mentioned already - the seller will not want to deal with you and even if you came back with a higher offer, they may refuse it just because it came from you. You also have the disadvantage in that type of market that while you're deciding whether to come up a bit, 10 other people have already put in less offensive bids.

[pipeguy]

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@Anonymous wrote:
In the neighborhood I'm shopping in Orange County, one of the hottest markets in the country, the average selling price is 70k UNDER the listing price. Learn your market. It's all about submitting an offer that the market will bear in my opinion. The only information the seller's listing price has gotten me is an indication of how reasonable they'd potentially be in negotiations.

Aside from landing a fantastic realtor, my advice would be to take more of the purchase process into your own hands. It's so easy to look up comps and other supporting information to determine a home's market value these days. At the end of the day it is your money, and nobody is ever going to care more about your money than you. Good luck!

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If that is the case, I'd assume that sellers are way over pricing their asking price or the market won't bear the current pricing. A "hot" market goes for asking or more if properly price, not a $70k discount to sell. Market value is dependant of quality comps more than anything for correct pricing.

As an example, the market I was selling in is a very strong high dollar area (Bethesda Md) - my pricing was based on comps per se, but I added an extra 5% ($40k) to test the interest/market (sales were $740 to $840 for older homes $1.8 to $2.5 M for new builds). When I "reduced" the property to what was the higher end of fair market value, it sold quickly - thats the game and it was a hot market (research zipcode 20816 if you are interested). Then again if you are talking $2.5M homes, $70 grand is not even closing costs so it's all relative I suspose.   

[Anonymous]

"2Kids2Cats I knew for a fact that I'd not be responsible for a penny but I am putting myself in the sellers position. Something people like you never do"

Not sure what kind of "people" you think I am, but as someone who oversees all capital purchases for my company, including a good but of real estate, I am well aware of the sellers positiom.

And catinthehat...what neighborhood are you shopping in, cause I need to start looking there! I'm in OC too and there are still bidding wars in YL.

[rooeez]

Another thing to consider is if it's in a new development. You say they were built within the last year, but if the developer is still building then the seller(s) really can't compete. You could look at their comps and how much of a discount they are offering to see if the price makes sense. 

[Anonymous]

It sounds like the OP is looking for a realtor that will just tell him/her what they want to hear. 

Why bother with a realtor then? And if you don't like the realtor's fees, again, go without. As a buyer though, your reatlor gets paid by the seller, not by you. 

If you're hell bent on making a lowball offer, do it, and you'll find out quickly what the answer is. 

For me, I talked at length with my realtor before putitng in our offer. He told me he felt like the house was priced "where it should be." I asked about various offer scenarios. Ultimately we put in an offer that was $2K under list, but with $3K back in closing costs, and it was accepted immediately. 

A GOOD realtor knows the market they work in, and can provide well-informed guideance. But if you're unwilling to listen, a good realtor is as effective as a bad one, or none at all. 

And as has been mentioned, if you're pre-approved for X amount, it would make more sense to look around that amount, rather than looking high and hoping a lowball offer is accepted. 

[seruby]

Having recently been through this same process, here is a personal story:

House I was looking at was listed at 304k.   After running comparables to other similar houses that sold recently in the neighborhood, I gathered about 270-275k value.  My analysis was thorough - type of house, number of full and half baths, number of bedrooms, house size, lot size.   I compared roughly 10-15 houses to that one.   Made my offer at 270, despite my realtor saying they might flat out reject it because it's so low.  Realtor even said she thinks the house could appraise for 285 easily.   Seller initially rejected, then countered the next day at 299.  I countered and said 275 is as high as I'll go based on my analysis.  Seller counted at 294, I refused and ended that.    2 months later, that same house sold for $275.      

The thing with house buying, and really most types of buying, is the seller wants to get as much as possible, and the buyer wants to spend as little as possible.  But both sides need to also be realistic to their goals.

The main question is, how close is your offer price compared to other similar houses in the area?   If your other similar houses in the area sold for about what you're offering, I'd stick with what you're offering.  If you're offering way under what they others sold for, you may want to re-evalute.

[MoreInfo1]

It'll depend on your market but I think that if you and your realtor aren't seeing eye to eye, then you need to find someone else who will be able to help you find what you want in your price range. You may also find that you need to prioritize your wants and needs.

When I bought my first home 2.5 years ago, the realtor I worked with was responsive but pushy. I think my home buying process would have been easier had I worked with someone who was more in-tune to what I wanted without being overbearing. When I found "the house" (4th home we looked at during 3 month span), my realtor wanted me to go in at a full offer or higher. I did my own research on comps, found out why the house was being sold (urgent need) and offered lower. The comment I got from my realtor was that it would never be accepted and basically a waste of time to submit but did so bc I didn't want to budge. I received a counter-offer for a smidge higher than my offer and we got the home. The home was on the market for less than a week.

So, I would say do your research, be realistic but also work with someone who understands what you need. The house buying process is already stressful enough; no need to deal with someone who isn't compatible with you (they'll probably appreciate it too).