Making a reasonable offer

3 Replies

My husband and I have been searching for homes, we found one that we both really liked. We liked it so much that we went to see it twice and even contemplated on making an offer. After talking about it a bit more we decided that the asking price was a bit too high for the home. The house is a 2 unit home and is large, other than the home needing some upgrades the deal breaker was that the siding is very old and the entire home has NO insulation. We live in New England and weather is crazy, so no insulation means $$$. We did not make an offer, and the house is still on the market. The price has been lowered twice, but even so we believe it is still high. As a first time homebuyer I do not know how low we should go when making an offer considering we have to insulate and put new siding on the house. The house originally went on sale for 390,000 in May, price lowered in June to 379,900, and again in July to 374,900. Is making an even lower offer even possible without offending the sellers?

The home is on the market.  That means the sellers are looking for offers. If they have been lowering their price it means they have not found an acceptable one.  The home is only worth what a qualified buyer is willing to pay for it.  Do sellers sometimes get offended by offers they consider too low?  Yes, but that isn't logical.  Any offer shows there is an interested buyer.   Offer what you feel the home is worth.  This may lead to a negotiation and a deal.  There is no way to know if you will find a deal without showing that you are a serious buyer.  The only way to do that is to submit an offer. (Make sure you include proof of funds and a mortgage loan pre-qualification if you will be seeking financing).

Good luck.

Originally posted by @Johanny Candelario:

My husband and I have been searching for homes, we found one that we both really liked. We liked it so much that we went to see it twice and even contemplated on making an offer. After talking about it a bit more we decided that the asking price was a bit too high for the home. The house is a 2 unit home and is large, other than the home needing some upgrades the deal breaker was that the siding is very old and the entire home has NO insulation. We live in New England and weather is crazy, so no insulation means $$$. We did not make an offer, and the house is still on the market. The price has been lowered twice, but even so we believe it is still high. As a first time homebuyer I do not know how low we should go when making an offer considering we have to insulate and put new siding on the house. The house originally went on sale for 390,000 in May, price lowered in June to 379,900, and again in July to 374,900. Is making an even lower offer even possible without offending the sellers?

I've heard several real estate investors say "if you're not embarrassed about your offer, you're offering too much." This is by no means always true (I've gone over asking many times), but there is an important truth in it; don't be ashamed of a low offer. If you offend the seller, so be it. Sometimes they will be offended, then come back to you a few months later willing to accept.

The other key lesson is not to get too hung up on any particular property. A lot of investors I hear about get into these long, drawn out discussions with potential sellers when they are nowhere close on price. I think it's better to just make your offer, let the cards fall where they may and then move on to the next property. Maybe, if the property sits, check in with them every month or two. But other than that, don't spend too much time on it.

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