How much to offer on a house will depend on many factors: the market you’re in, the property’s list price, and how long it’s been on the market, among other details.
Of course, every homebuyer wants to score a deal. Even a small price cut can make a big difference to those monthly mortgage payments.
But it’s not uncommon for bargain-hunting tactics to fail.
To help, we spoke to leading real estate agents in their markets to collect tips and tricks for potential homebuyers to consider when making an offer on their dream home.
When to go above or below the asking price
The truth is, if you go in with a lowball offer on a house, you could risk offending the sellers—and having them write you off completely. Making an offer on a house is all about striking the right balance.
“Your ability to present a lower offer will depend greatly on current market conditions—meaning if it’s a buyer’s market or seller’s market,” says Cynthia Jacinta Keskinkaya, co-founder of the Keskinkaya Dartley Team at Douglas Elliman in New York City.
So, before you make any real estate purchase offer, determine what type of market you’re in. Traditionally, a buyer’s market comes with a lot of flexibility on price, because available inventory is high and houses tend to sit on the market for longer. Here, home sellers tend to be more willing to negotiate, because offers are few and far between.
“In a buyer’s market, I would not hesitate to submit an offer that’s around 10% below asking,” advises Chris Cloud of Exit Heritage Realty in Haymarket, VA. “Most sellers will at least see that as worthy of a counteroffer.”
When you should go above the asking price
In a seller’s market, it’s much harder to go below the asking price—because inventory is low and multiple buyers tend to be interested in the same properties. For reference, experts agree we’ve been in a seller’s market since 2022.
In this case, the sellers might be getting multiple offers, so don’t expect them to be too willing to negotiate with you. If you’re determined to make this house your new home, it’s best to offer the list price, or better yet, consider going above the list price if you can.
Know that other homebuyers might be willing to submit an all-cash purchase offer, or even waive a home inspection, to persuade the sellers to accept their offer, so prepare to get competitive.
Before you start submitting offers, your real estate agent can help you determine which market you’re currently in.
When you should offer less than the asking price
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Real talk: Do sellers even come down on a house price anymore? It is tricky, but Michael Russell of Ratchet Straps USA emphasizes the importance of making sure a lowball offer doesn’t insult the seller—if you want to be taken seriously as a buyer.
“The rule I’ve always followed is to never go more than 25% below the listed price,” he says. “Chances are, after fees, commission, and sentimental value, the sellers are already hurting. If you dip below that point, they may disregard your offer entirely.”
How long has the real estate listing been active?
Making an offer on a house that has been on the market a long time could be a gamble that pays off if you’re looking to score a deal.
“By paying attention to the property history, you can get a better idea of the demand for that house,” notes Jennifer Carlson of Coldwell Banker in East Greenwich, RI. “Two days on the market? Probably not a good idea to go in with a lowball offer $50,000 below asking price. A whole year on the market, with price reductions? Go ahead and roll the dice. The longer a house has been on the market, the less of an upper hand the seller has in negotiation.”
If the house has been on the market for a long time, the homeowner is probably motivated to sell as soon as possible, and that can mean flexibility on price. In the worst case, if you come in with an offer that’s too low, the seller might come back with a counteroffer that’s still reasonable.
Fortunately, information on how long a house has been on the market can be easily found on most real estate listings—or if not, any good real estate agent will have access to this information through the multiple listing service. Ask for this to be pulled up for you, and use it as a reference as you draw up your offer.
How does the price compare with similar homes in the area?
Once you have a general sense of how much wiggle room there is to work with, it’s time to look at comparable sales in your desired neighborhood. Ask your real estate agent to work up a comparative market analysis (also called a comp or CMA), which will show you the list and sale prices for similar homes that have sold in the past few months. Use that as your guide to homebuying.
“The comparables should be your go-to on a first offer,” says Shane Lee on behalf of Realtyhop. “If, for instance, a similar property in the same neighborhood is quoted $10,000 less, then it makes sense for you to go $10,000 below the asking price.”
As a homebuyer, knowing the market value is key to getting a fair price on your new home.
How badly do you want the home?
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Last but not least, ask yourself: How would you feel if your offer got rejected? Let’s say you’ve been house hunting for a while and you’ve finally found your dream home. It might be worth it to consider offering exactly what the seller is asking for—or a bit more—to show that you’re move-in ready.
“If you want the home badly enough, you need to make the seller an offer they can’t refuse,” advises Jenny Ditty Kang, a real estate agent with Wakefield Reutlinger Realtors in Louisville, KY.
However, if you think you’ll be able to move onto the next property without any issues coming up, there’s no harm in trying to score a deal. In the worst case, the seller rejects your offer and you go back to house hunting. In the world of real estate, there’s almost always a long list of new and exciting properties.
How much to offer on a house with multiple offers
If you think you can fall in love with another property, don’t waste your time and money competing with multiple offers and other buyers. If you find yourself going over market value or potentially overpaying in a bidding war, take a step back and ask yourself if this particular house is worth it.
Real estate is expensive, and with the added cost of home inspections, closing costs, real estate agent fees, and so on, it’s best to make sure you can afford the house before you get locked into a mortgage you can’t afford.
This last piece of advice might be the most subjective of all, but it’s important. Ultimately, it’s up to you to determine how much to offer on a house.
