I want to make an offer on a home that has been on the market for a year. The home in my opinion is overpriced. Homes in my area usually sell in weeks. originally listed at 299,000 and now a year later is 254,000. How low is too low to go on this home. I really love the house but am not willing to go higher than 200k. The home is completely outdated still in the 1980's. Other homes available/equivalent are priced around 185,000-225,000 and over 1 more bedroom and newer inside. Is this too low of an offer? Should i wait for the price to drop more? Any advice would be helpful.
HI @Sam Smith . Your questions are best suited for a local real estate professional, probably a Realtor, but I can answer your question generally.
At the end of the day, you should base your purchase price on comparable sales, it's the safest route to go. If I were in your shoes, I would enlist the help of a local agent, one whom is savvy with investors (hard to find, that) and determine roughly what you believe the fair market value is.
Based on that, you make your offer. Since homes not sold between investors are often bought or sold based on emotion, you must keep that in mind. You may decide to start by offering a lower number with the intent to negotiate back and forth to arrive at a compromise number that both parties find acceptable. However, if you go too low, you may offend the seller, which ends up backfiring and taking away a good amount of your negotiating power. If you offer too much to begin with, you may be giving up negotiating room.
It all comes down to what your goals are. On this particular instance, knowing nothing about your specific market, I'd say a home that has been on the market quite a long time may be a good opportunity to offer the seller less, since they may be more motivated to sell at this point. Keep in mind though, assuming your numbers are accurate, a home that is that overpriced indicates either a seller or a listing agent with unreasonable beliefs or expectations. Therefore, do not expect your reasonable rationale to be met with a reasonable reception.
Just some initial thoughts, but again, you should defer to a local agent who is knowledgeable on the trends and characteristics of your area.