What to offer on a house in the Eastside-particuarly Redmond

[roysie]

My husband and I moved away from the Seattle area 3 years ago. Due to his job we are now coming back. We would like to live in the Redmoond/Woodinville area again. I noticed that prices have come down but not wayyyyy down since we left. Any ideas on how much less than asking price you can offer on a home in those areas and still have the offer accepted? We have never bought a home in the buyers market before. We have always moved when it was a sellers market and I am unsure of protocol in a buyers market. Thanks for your help!

[ira s]

Roysie,
The average selling price is about 4% less than the final listed price, but there are a lot of variables. As an example, let's say a house in Redmond went on the market three months ago for 600,000 dollars, and didn't draw much interest, so they lower the price a couple of times, and when they finally get an offer the asking price is now 550,000. They accept an offer of 528,000 dollars, which is about 4% off of the last asking price.
But what is the least amount you can offer that is likely to be accepted?
That depends on the seller, how much equity they have in the home, how desperate they are, and how realistic and fair the asking price is. In a few instances, the sellers want to sell their home quickly and price their home lower to begin with. These folks don't want to haggle, they just want someone to buy their house and that's why they've priced the house low to begin with. I've represented a few buyers who felt it was almost obligatory to offer far less than the asking price, even when the asking price was way less than comparable properties. In every case, they missed out purchasing a home priced considerably less than nearby similar comps and regretted not offering more. If the house appears to be a real bargain, you like the house and really want to buy it, you like the neighborhood, and figure you're going to stick around a while, don't feel that you have to offer less than the asking price.
On the other hand, some sellers just can't hang in there any longer and are ready to deal. And many houses are still waaay overpriced, deluded sellers being represented by deluded agents.

[BillE]

Somewhat related, I've heard that offers below asking price are less likely to be accepted when the home is owned by a bank. Any truth to that?

[ira s]

BillE,
There's some truth to that. When a bank owned property gets priced, they'll conduct a Broker Price Opinion (similar to an appraisal), so they have a pretty good idea of what they think the current market value is, and then price it somewhat below that. Some bank owned properties are so undesirable in so many ways that they're just not going to attract very many buyers. Some of these properties get reduced substantially in price, but only after they've been on the market for a while. And I've also seen bank owned properties sell for just under the asking price (and over the asking price too), so...I think you can safely assume that if a bank owned property is relatively new on the market, they've already got it priced below market value and won't be willing to budge much, if at all.. Depending on the potential of the home and the neighborhood it's in, it can even result in a multiple offer situation and a sale for over asking price.
The banks are already seeing a loss on these properties, so yeah, most of them they expect to sell for asking price or near it.

[BillE]

Thanks. It makes sense. The banks don't have any of the personal issues that might cause other sellers to take a lower offer.

[Racket]