Q: I’m looking to buy a home in New York’s Hudson Valley, where it seems sellers sometimes ask for a lot more than the property is actually worth. So when it comes time to make an offer, when is it okay to undersell and when is it okay to just offer what I think is a realistic market value? My real estate agent and I have different philosophies. I follow the “there’s nothing wrong with asking” rule, especially for properties that have been on the market for months. Any guidance would be appreciated.
A: No two potential home buyers are exactly alike, so there is no universal answer to your question. In any case, you should be open with your agent about your strategy so you can build a good working relationship, or find another agent who can support your goals.
The seller may have set the price using local market data, or because they know they want to get a certain price, or a combination of both, said John Avenia, broker with Columbia County Real Estate Specialists, LLC.
One thing you can do is have a conversation with the seller’s agent to understand what kind of offers their client might consider. “Whether the seller is flexible or not, you should understand the local market, comparable properties and market trends,” said Jeff Cohen, a real estate agent with NextStopNY who works in New York City and has experience in the Hudson Valley.
An experienced real estate agent who knows the area can help you strategize. If the seller is asking too much based on recent sales of comparable properties in the area, and if the days on market are higher than average for the neighborhood, you should definitely consider submitting a lower offer.
“However,” Mr. Cohen added, “be aware that the seller may not consider such offers or may not make an offer in response.”
Still, prospective buyers should limit any offer to the value of the property as they see it. “It’s unfortunate to deprive another buyer of a property because you undervalued it,” Mr. Avenia said. “It can be very bad to overpay for a property.”
He said some homebuyers have had success purchasing homes at prices well below the property’s market value. But the overheated housing market in recent years has reduced the success of this strategy.
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