Cash bidding advice?
Buying a home in a tiny down market, median home price is around 65k, lots of homes on the market 1yr+, but some of the higher priced homes are moving because a federal prison brought about 100 comparatively wealthy families to the area. At the same time, the giant blue collar employer in town has closed. This has caused the smaller SF's and the MF's steadily fall in price. MF's are especially cheap, vacancy rates are probably terrible. The places we're looking at are in the 30k-50k range, but I need some bidding advice and realtor advice. Looking at the recently sold homes on zillow in that range show about 1/2 selling for asking price with the rest selling below asking. Most of the homes selling significantly below asking price are in need of repairs to be habitable. The agent told me that most of the deals he does have some kind of closing cost money exchanged.
(I just read a cool study about how people are willing to spend more when you disconnect the actual payment from the purchase decision. I think the proliferation of closing cost contributions are because of that same reason. The seller gets the feeling of getting a selling price they like, along with that obligation to pay those costs at closing, disconnecting selling decision from the actual payment of closing costs. If anyone cares to read it: https://www.apa.org/pubs/journals/releases/xap143213.pdf )
Do you have an opening bidding rule or guideline? I feel lost as what to bid because the home price is so low. If a home was listed at 120k, underbidding by 10k might be rejected, but it won't insult the seller either. If I underbid a 35k home by 10k aren't the buyers going to dismiss me as a serious buyer? Or is it possible that a seller could be that desperate as to accept a bid 30% below asking?
The reason I'm asking is that the agent I've been with(no contract has been signed with him) has been a good guy to work with, but is either a poor negotiator, or just doesn't want to haggle when he's only making 1k on the deal as it is. He was recommended by a friend, has great reviews on angies&zillow, and we like him. His advice on the first home has been to bid full price and ask the seller to handle all closing costs. On a cash deal, closing costs are pretty low, aren't they? This is probably a concession of $1000 or so, right? It's a 35k listing, so the closing cost concession is about 3% of sale price, which is probably a fair deal on the house, but everything I've read on negotiation says that everyone bids too high on their opening bid. We're waiting to see other properties, and some comps before making a bid.
What would your opening bid be on a 35k home in a down market(home on market 90+ days)? Cash bid, very flexible on closing date, usual contingencies. Can sweeten the deal with big EMD if that's something the seller cares about. It's probably important to know that RE is so cheap in this town a 35k home isn't a distressed property, we'd be mostly bidding against other people looking for a primary residence, and not investors(or nobody at all considering most of these homes have been on the market 90+ days).
Apologies for my rambling to get to a pretty simple question:
TL;DR How low should my opening offer be as a percentage of listing price in buyers market?