August 1st 2022

What is a good offer on a property? This will depend on the current market conditions, the property’s list price, how long it’s been on the market, and many other factors to be considered.

Of course, every homebuyer wants to score a deal. It can feel good to negotiate a seller’s price down, and even a small price cut can make a big difference to those monthly mortgage payments.

But it’s not uncommon for such bargain-hunting tactics to fail. if you go in with a lowball offer on a house, you could risk offending the sellers—and having them write you off completely. Buying real estate is all about striking the right balance.

To help out, here’s a guide on some questions to ask yourself to figure out how much to offer on a house so you can land on the perfect offer price—from how much to offer on a house to how much you can negotiate on a house.

How much to offer on a house in a seller’s market

How much can you negotiate on a house? In this seller’s market, it’s much harder to go below asking price, because inventory is low, and multiple buyers tend to be interested in the same properties. In this case, the sellers may be getting multiple offers, so don’t expect them to be too willing to negotiate with you. If you’re determined to make this house your new home, it’s best to offer list price, or better yet, consider going above the listing price if you can.

Know that other home buyers might be willing to submit an all-cash purchase offer, or even waive a home inspection, to persuade the sellers to accept their offer, so prepare to get competitive.

Before you start submitting offers, your real estate agent can help you determine which market you’re currently in. Alternatively, here’s more advice on making an offer in a seller’s market.

How long has the real estate listing been active? 

Making an offer on a house that has been on the market a long time?  By paying attention to the property history, you can get a better idea of the demand for that house.  Two days on the market? Probably not a good idea to go in with a lowball offer 10% below asking price. A whole year on the market, with price reductions? That might be a situation in which to take a chance. The longer a house has been on the market, the less of an upper hand the seller has in negotiation.  However, in this seller's market, don't expect deals of a lifetime.

If the house has been on the market for a long time, the homeowner is probably motivated to sell as soon as possible, and that can often mean flexibility on price. In the worst case, if you come in with an offer that’s too low, the seller might come back with a counteroffer that’s still reasonable.  Still, talk to your agent about what low offer would be too low.  There's always the risk of offending the seller and receiving no reply.  

How does the price compare to similar homes in the area?

Once you have a general sense of how much wiggle room there is to work with, it’s time to look at comparable sales in your desired neighborhood. Ask your real estate agent to work up a comparative market analysis (also called a comp or CMA), which will show you the list and sale prices for similar homes that have sold in the last few months. Use that as your guide to homebuying.

The comparables should be your go-to on a first offer.  If, for instance, a similar property in the same neighborhood is compared at $10K less, then it makes sense for you to go $10K below the asking price.

As a homebuyer, knowing the market value is key to getting a fair price on your new home.  With my 28 years experience and hundreds of sales, put my expertise to work for you!

How badly do you want the home?

Last but not least, ask yourself: How would you feel if your offer got rejected? Let’s say you’ve been house-hunting for a while and you’ve finally found your dream home. It may be worth it to consider offering exactly what they’re asking for—or a bit more—to let the seller know you’re move-in ready.

If you want the home badly enough, you need to make the seller an offer they can’t refuse.  In this market, there are great homes on the market but inventory is limited, and buyers should be prepared to put their best foot forward.

Bottom Line

With interest rates and prices expected to continue increasing, the seller's market isn't going anywhere anytime soon.  Now is the time to buy into the Shore market, as many may become priced out in coming months.  Make your best offer out of the date, determined by comparable properties, market conditions and with help from my 28 years experience!