Miami Home Prices – How Much Do You Offer?

January 9th, 2009 Categories: For Buyers

I am often asked by Miami home buyers how much to offer on a home that’s for sale. To be more specific, I am asked what percentage under List Price makes an acceptable offer.

Well, here’s the problem… there is no set percentage because the list prices are all over the place. If a home is valued at $200,000 and is listed at $200,000, I would say go no lower than $190,000 (or 5% less). But list price is not always market value. List price is often much higher than market value.

Because list prices are not always in line with market value, you can’t use them to figure out your offer price. You really need to have your agent look at comparable sales as well as comparable listings which are priced low (usually foreclosures).

In today’s market, you can offer a little less than market value. Again, not list price, but market value. Forget the list price. It doesn’t matter. It’s indicative of what the seller wants and nothing else. It helps you gain some insight into whether the seller is being realistic and would be willing to negotiate with you, but it doesn’t help you figure out an offer price.

For offer price, find market value and calculate a little lower. 95% of market value is a solid offer, as long as all other terms are acceptable. Depending on how badly you want the house and how badly the seller wants to sell, you may settle on somewhere between your first offer and his asking price.

The trick really is figuring out the market value. It’s not an exact science. It’s more of an art. I’ll have to do a post on that soon.

Negotiating an offer is much more than just the Sales Price. There are many terms in a real estate contract. They can all be points of negotiation. A good real estate agent can help you with all of them. Best of all, it doesn’t cost you the buyer anything for the agent’s services. Most agent commissions are paid by the home seller.

So next time you see a list price remember that you can’t calculate your offer using it.

This entry was posted on Friday, January 9th, 2009 at 10:41 am and is filed under For Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Thesa Chambers, Broker said at January 15th, 2009 at 2:32 am

   Maggie – good advice – pulling comps is always the best education when planning an offer.

2. Joanne Hanson said at January 19th, 2009 at 10:20 pm

   Hi Maggie, I am finding that most people seem to offer 90% no matter what the price,and the ones that get it together often end up around 95%. An unrealistic Seller will not negotiate, but we won’t even offer on one that is so much above the market to be ridiculous. I recently wrote a very similar post on my blog…great minds think alike!

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