What is The Appropriate First Offer on a Property?

Posted by Jim Kimmons, Broker/Owner • January 7, 2008 • Printer-friendly

When working with buyers, I'm frequently asked what is a good first offer to make on a property. The implication being that you want to make the best and lowest offer possible, but you don't want to upset the sellers to the point that it hurts the negotiation.

There is no rule of thumb for deciding what a first offer should be. Though there are some statistics that can help you in seeing what others have done before you. In Taos, this real estate market has experienced good times and some slow times. And, in the good times, generally we've seen offers that come in at 10 to 12% below the asking price. Then after negotiations we have found that an average over the entire market shows acceptance of the contract at something between 3% and 6% below the original asking price. In slower markets sometimes those numbers can slide downward,. In other words you might offer less than 10% below asking and you may settle below 6% under.

Again, there really is no rule of thumb. My goal is to help my buyers get the best deal possible. However, I will always be direct and to the point as to my viewpoint of the situation. I'll be honest, and tell you what I know and what I perceive about the motivations of the seller. I have no problem presenting any offer, but do not want to put you in a position of losing a property you really want because we were too aggressive in our first offer.

Whether we make the deal in one counter offer or ten, my goal is to help my buyer get the best deal possible. To do that we will take as long as necessary.