Offering below asking price

[Katherine Roberts]

I’m new to real estate and haven’t made an offer yet. I keep finding properties that don't make sense at the asking price, which I’m sure is common. For example, I found a pretty decent property but they’re asking way too much. They’re asking $385k but the only way I’d get a good deal is around $330-345k. Do I offer that or do I just walk away? 

They bought it 2 years ago at $305k, so they’d still make a profit.

Any advice?

[JD Martin]

Quote from @Katherine Roberts:

I’m new to real estate and haven’t made an offer yet. I keep finding properties that don't make sense at the asking price, which I’m sure is common. For example, I found a pretty decent property but they’re asking way too much. They’re asking $385k but the only way I’d get a good deal is around $330-345k. Do I offer that or do I just walk away? 

They bought it 2 years ago at $305k, so they’d still make a profit.

Any advice?

 If they bought it at $305 and sold it to you at $340 they're not making a profit. Their RE commission alone is going to be $20k. If it's not their primary there will be a capital gains tax as well, and perhaps depreciation recapture if it's a rental. That also doesn't account for the fact that $305k in 2021 dollars is $340k in 2023 dollars using 6% annual inflation as a figure. 

Irrespective of all of that, if you figure out what a property can be profitable to you at, that's going to be your offer. I would say that the market might not be able to support your idea of "a good deal" and you might just either have to settle for an "OK deal" or wait it out.