How much can property's asking price be beat down?
Posted 02/08/2010 - 09:12 by dickboren
Most of our clients start asking this question as they closer to writing an offer. As it turns out we have very good data available that allows us to develop and clear answer to that question.
The first thing we look at is the comparable sale data. That is what have similar homes sold for recently. That is important because not only can we look at that but so can the seller and that is what the appraiser will use to establish value from a loan perspective. In most cases a seller will out until they get offers that are near the comparable sales number. There some cases where the seller has other pressures which may cause them to accept lower offers and we’ll try to figure that out to the best of our ability.
We’ll prepare those reports for you once we get to a short list of properties, but in the mean time we have some general charts on our web site that help us understand the relationship between what homes are listed for and what the end up selling for. You can see that chart by following this link: http://www.borenrealestate.com/default.aspx?pp=164441
What you can see on this chart is that unlike last year, the current selling prices are pretty close to the asking prices.
I hope that helps.
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In my experience there are no hard and fast rules when it comes to how much asking prices can be knocked back. It depends on so many factors. Local demand, the state the property is in, whether the asking price was reasonable to start with. Often times a seller ill need to make a sale so bad you can get a massive cut in price. Other times, especially when demand is strong you can't get the price to budge an inch. The golden rule though is "if you don't ask you don't get".
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