How low is too low when making an offer on a house?

[Nate Pucel]

There's a house for sale that I'm interested in that looks to have been a rental due to a bit of visible damage. Hasn't been listed for sale in decades and is in the name of someone who I believe may have moved due to profession. The current price seems high based on the current condition and SF. It would be my first rental property, and so I'm unsure what's too low, both in terms of what you've seen accepted under asking, as well as what's acceptable to ask your real estate agent to take the time to draft up an offer?

[Jonathan Greene]

It's very market dependent and based on comparable sales in your area that match the BR, BA, amenities, and general area as your target property. Other factors that play a role in how low you can or should offer are:

- days on market (the longer the property has been on the market, the more likely a lower offer will be considered)

- if it's a short sale or REO or a straight market listing. There will be less wiggle room in the beginning for short sales and REO properties as the final price comes from the bank.

- feedback from your agent after talking to the listing agent about how firm they are on price (the listing agent cannot make comments that run against the seller's best wishes, but often times your agent can get a general idea if they think they listed too high or if it's just right)

With that said, there really is not a too low offer as long as you have reasons to back it up. No buyer's agent wants to write up lowballs without reasoning and if that is all someone does, agents will catch on and not expect much.

Have your agent send you all relevant comparable sales in the past year with the same bedrooms and bathroom and general amentities within a half mile to a mile of the subject property and compare what they sold for and their condition with what you want to offer and see how it shakes out.