How low are people bidding below listing?

Bidding at least 10-15% below asking

Isn't this a nonsensical question? I would say it depends on the unit and the price history of the unit, how much the price has already dropped. I don't think any fixed percentage makes sense without the specifics regarding a particular unit.

It all depends. If the seller is desperate and you love the place and you can pay cash or you will waive a mortgage contingency, I would suggest a bid of 535,000, this way you are pricing ahead of future declines, which are sure to come.

I guess 7000K was a typo, otherwise it looks like 7M. I insist in something already stated: do your homework, find out comps from years ago (2003, 2004) see how much the apt. has appreciated in the last 10, 15, 20 years, think how much you think it should have, and then bid what you consider reasonable and fair.

10-20 percent below ask.

407 is right. there are too many other variables that you need to know. one of the most important that you will not know is if and where other bids are coming in. without knowing this you can't tell if your bid is in the ballpark for consideration or just a joke the seller will laugh off...for now. a lot of sellers seem unrealistic and price behind the curve, not ahead of it. if a buyer is getting peppered with low bids then it starts to change their perception of their place and reality will set in with all but the most stubborn of sellers.

Thanks sniper. Now that all you buyers have revealed your technique of bidding 10-20% below ask, I'll raise my raise by 10-20% and I'll have a deal.

sorry, raise my price... I wish we could edit our own comments.

If I were bidding, most definitely 20 percent or more below asking price. The seller has pretty much all the leverage these days.

"7000K?"

"The seller has pretty much all of the leverage these days"?????

Ok, all of the confusing sentences aside, as 407 and others have stated, there are far too many variables involved for people to throw out a number.

Just keep in mind that some sellers and brokers have started to anticipate 20% lower bids and have inflated their offers accordingly. (Which is an utterly ridiculous strategy on top of hoping the a buyer is dumb enough to fall for it.)

I'm not even sure why a set % below ask has any relevance at all! I have seen apts that I think should trade 5% below ask and seen some that I think will trade 60% below ask. Current ask should be the last input you look at when developing a bid and trying to gauge what the likelihood of seller hitting said bid will be. Current comps and expectations are the points that matter. As we all know, many buildings are offering several apts in the same lines with asks 15-25% apart, meaningless. Find existing comps from the last 6months, make guestimates for current comps, adjust based on your current macro and micro economic views, and bid away. Enjoy, and good luck.

LOL. I may be way off but I interpreted this as a $7000 rental.

If so, my crazy two cents is this: Bid LOW!!! Figure out what you want and what you want to pay for it. Give yourself time. I might be ballsy enough to start my offers at 30-40% below ask if a place has been sitting for awhile w/o a significant reduction. Be bold!!! See where it gets you. I consider an offer of 20% or less than ask in this market to be quite generous to the owner ;). It is to the advantage of all buyers and renters to negotiate their butts off.

Though, if you have your heart set on one particular place, it's a different story. Good Luck!!

I believe hallidina's question is related to rental prices.

i believe you are wrong.

I have been offering 30-35% below asking prices (probably 40% below peak) and not getting anywhere so far.

According to some of the closed sales that West81st and others have been posting, although is still rare, some people are getting somewhere with offers at 40% below peak. That can be 10% or 25% below ask, depending on how many price chops the apt. has already had.

This is kinda dumb - the listing price is IRRELEVANT ... the question is, "how far below a comp from 12 months ago". Its an inefficient market: some places are overpriced, some underpriced, others priced appropriately for how desperate/not the seller is.

I will never understand how real estate "professionals" continually quote irrelevant numbers. You can value a book wherever you want - but ultimately the market sets where it will trade.

Re: 30% to 35% below offering price

joedavis,

Sounds like a reasonable strategy - but you do have to be patient. It only takes one motivated seller for this to work.

When sales continue to decline and inventory continues to rise, sellers will gradually understand the "bid" and "transaction" market is well below their wishful-thinking "offering" prices. If they really do want to sell then they know what they have to do. (And BTW, sellers will similarly be able to buy a bigger place elsewhere at a much reduced price as well...so they're actually better off with this situation. It's only people trading down who will be hurt.)

joedavis:
"I have been offering 30-35% below asking prices (probably 40% below peak) and not getting anywhere so far."

Au contraire young lad, you are a beacon of light in this long journey of good vs evil!. You have gotten far. You are demonstrating to every seller that you encounter that there is a bid for their apt, the problem is theirs, not yours. Remember, they drew first blood, they offered their apt in the public market. They willfully made a decision to ask the marketplace what their apt is worth, you told them. Congratulations, stay gold!

I've been looking at 1 and 2 br apartments in the $500-600K range in Brooklyn, but at a minimum I am bidding 30% below asking price. I have an amount I can spend (all cash), so any place that truly interests me, that amount is what I am bidding. I don't anticipate someone accepting that offer right now, but a year from now I plan to get that 2-br that would've listed for $650K in 2007.

I think that the more of us that make such 30% below offering bids the better for all of us future buyers. It sends a message loud and clear to the sellers.

Otherwise, they simply think their price is fine but the market just isn't moving...so be patient.

We need to disabuse them of that perspective. The more of us the better.

Power to the people!!

Appreciate the comments and apologies for the typo - question was with respect to a rental that is currently asking $7,000/month. I understand that there are several variables that work into this decision, but was simply trying to get a sense of where people, roughly, are bidding for rental or sale units relative to asking. Thanks!

"I have been offering 30-35% below asking prices (probably 40% below peak) and not getting anywhere so far.

If your serious about buying, your going to have to do much better than that. Don't be a cheapskate.

Anyone who thinks that apartments are going to fall by X% needs to wait for them to fall by that much. You cannot buy an apartment today for tomorrow's price. If you want to buy today, then you must pay what the apartment is worth TODAY. I am sorry, but you can't have your cake and eat it too. This is precisely why 99% of offers that factor in future price declines FAIL to result in a sale. Can I price in future declines in value when I buy a brand new car? I rest my case.

Generally wise to ignore asking prices - selling brokers use them to develop a "reference point" which is a common negotiating strategy. I know of someone who recently listed an apt at $1.3m, quickly lowered to $1.1m a month later just to give the impression that he has already come down 20%.

Isn't an apartment that isn't selling worth....about $0?

alpine: The car comparison doesn't hold weight for 2 reasons.

1, if you've ever bought a new car and paid list price, you're a sucker. Ever walk into a dealership and say "OK!" ?

2 if you've ever bought a used car from either a person or a dealership and paid their asking price, you're a sucker.

You also completely made a case against your argument by saying "you must pay what the apartment is worth TODAY." An apartment is only worth (in resale dollars) what someone is willing to pay for it. I want to buy Apartment X for $300K, even though it's listed at $400K. If I make the only offer on that apartment, then whether or not the seller accepts my offer, that is what it is worth TODAY.

I would assume you're either a broker or selling your own apartment, but I'd implore you not to rest your case when you've lost the argument.

just a little fyi: You have to pay list price if the car you want is a hot seller. I had to pay list when I bought. And so did everyone who bought the PT Cruiser when it first came out. There was a waiting list for that car.

OK so you pay list price for 15 CPW, but what about every Downtown Brooklyn listing thats chopping away at their own prices?

No, I am not a broker. But you cannot expect the seller to accept an offer for 30% below asking. If you wan it for 30% below asking, ten you have to wait for that price, assuming it ever comes.

I should also point out that, by lowballing, buyers are actually the main reason sellers are listing high. Sellers are not dumb. They know yur going to offer 25% below asking. So what do they do? They list 25% higher than they normally would have. One realtor who inflates prices for lowballers has already admitted to doing so in the Real Deal a few weeks ago.

Alpine,

If the seller want to sell in the next couple of months, he might have no choice but to accept the low bid. If he wants to wait it out a few years, that's another story.

"I think that the more of us that make such 30% below offering bids the better for all of us future buyers. It sends a message loud and clear to the sellers."

That strategy would only piss off sellers and make them RAISE their prices 30%, doing more harm to future buyers.

Although there is a "measure" of truth to what you're suggesting, Alpine, I think it would be foolish for buyers to ignore what two-year residential futures are trading at. New York residential futures are selling at a 15% discount to the current C-S spot price.

(That, of course, is New York "metro" area. Manhattan has appreciated considerably more than the metro area as a whole over the past five year and IMHO has considerably greater downside risk given current and likely Manhattan fundamentals.)

> But you cannot expect the seller to accept an offer for 30% below asking.

Significant evidence to the contrary...

"I should also point out that, by lowballing, buyers are actually the main reason sellers are listing high. Sellers are not dumb."

Hmm...is there an option other than dumb and not dumb b/c listing high right now isn't what I would call "not dumb".

Alpine, your argument seems to assume that the value of an apartment is equivalent to what the owner is asking for it. Here is how the logic of your argument above would look if you instead start from the assumption that what is being offered is the value:
"But you cannot expect the buyer to pay 42% above his offer. If you want to sell it for 42% above the buyer's offer, then you have to wait for that price, assuming it ever comes."

Of course, neither assumption (that value equals asking price or that value equals offer) is valid.

Good point, JD. But, in the bigger picture.... who cares whether sellers are pissed or happy or refusing or whatever.

Its a MARKET.

Some sellers are successful, and it is because they have lowered their prices. Those who don't will stay sellers a long time. Lowball a bunch of 'em... you only need one to say yes...

Exactly nyc, a market means a seller offers a good, and a buyer can choose to pay for it, negotiate for it, or move on.

I went to an open house a month ago for this unit - http://www.streeteasy.com/nyc/sale/167914-condo-326-state-street-downtown-brooklyn-brooklyn

The building has 2 units for sale, this is one, and both have been on the market over a year, with the developer/seller lowering price by 23% during that time. At the open house, the broker said that if I was at all interested in placing a bid, the seller was VERY eager to unload the property and move on, and was listening to any offer. Given these factors and the kind of market we are in, I made an inquiring offer saying I like the property and was considering an all-cash offer in the high $300's. A $375K offer is a 30% discount from the current asking price. Instead of opening up any type of discussion, the broker's response was "any offer in the 300s will not be working for this seller."

I don't expect to ever see this property listed at $375K, but I think it's naive for any seller right now to not at least have a discussion with any potential buyer out there who is making offers. I think it's also stupid for a broker to basically encourage a lowball offer and then just simply say "no."

Like nyc said, I just need 1 person to say 'yes.' If these brokers ever want to see their commission, they'll have to convince the seller to be more open. If they can't, well then for the broker's livelihood sakes, I really hope someone else out there makes a higher offer.

Alpine's argument makes no sense, and is laughable at best. Prices are driven by market forces, NOT if the owner is "pissed" or not. If an owner is actually trying to sell his apartment, pricing it 30% above market rate (as suggested by Alpine) is moronic.

fishermb, the broker may just be trying to encourage you to bid higher. No reason to bid against yourself though. Anything lost by just putting in the offer and seeing what happens?

John: At this point, I'd be surprised if the broker was playing games when they clearly want to unload the unit, although I suppose with a broker, you never really know. A month has passed since I contacted them, and with it an open house each weekend. Perhaps at the next price reduction I will follow up but for now I'm content where I am.

fishermb,
Thanks for the anecdote. I looked at that one also and thought to myself that I wouldn't pay more than 400 for it. I didnt even bother discussing that with the broker though.

An apartment is worth what the comps are selling for. If the comps for a classic 6 are $1.8 million, then that is the value. And anyone who thinks they can get the apartment for $1.1 million is delusional.

"If an owner is actually trying to sell his apartment, pricing it 30% above market rate (as suggested by Alpine) is moronic."

I am not recommending any strategy. I'm just reporting what agents are doing, and some of them are listing high in anticipation of lowball offers.

"I am not recommending any strategy. I'm just reporting what agents are doing, and some of them are listing high in anticipation of lowball offers."

That is precisely why brokers (such as yourself?) have such a bad rep. Apartments will NOT be sold anywhere above market rate, certainly not 30% above. In fact, the only apartments that are actually selling are closing at LOWER prices. Brokers that waste everyones time (owners and buyers) by asking high prices are delusional, and should be immediately fired. The bottom line is that if there are two identical apartments on the market, and one is priced 30% above market rate (due to your 'theory'), NOBODY will bother to come see it. The longer an apartment sits on the market, the lower the final price will be. So by trying to inflate the price, the broker is actually lowering the final closing price down the line. Pretty stupid business decision, dont you think?

First, I am not a broekr. And yes, is is stupid to list 30% above the competition, especialluy when it is in the building. But what I am saying is that offering 30% below asking when there are NO COMPS to justify that offer is a stupid strategy that will not get you anywhere.

I think most reliable and saavy brokers realize the state we are in now. Usually it is the seller who is more delusional than the broker and refuses to lower the price despite the broker's protestations. If a broker is encouraging higher rates than the comps show these days, than the broker is worthless. I sold my one bedroom last year because I was priced much lower than apartments with similar comps. And I even accepted a lower bid than my asking price. Those same apartments that were foolishly overpriced are still on the market.

The problem is that the financial world changed in Oct 08 and continues to get worse therefore what comps are reliable?

It could be argued any comp Dec should be ignored as the contract would have been signed around the meltdown went into full force.

It's easy for the agent to tell the seller to lower the price since it's not their money.

True that, alpine, but it's also the best advice right now.

Alpine292 sounds like a majorly pissed off broker I dealt with on a W. 70th property. She told me that I was "delusional" and that I was "out of the ballpark."

There is absolutely nothing wrong with putting in bids 30% or lower on property.

I don't care if this offends anyone. Too many people have been completely spoiled by the last 8 years of the RE boom and have lost ALL objectivity of how an asset market works. 1999-2000 has created a whole generation full of amateur-hour real estate "experts" who assume that prices always would go up and GOD FORBID if someone puts in a deep bid on their property! Really, this is a whole generation of circus clowns that have little to no idea of the reality of asset market dynamics.

And yes, a home or an apartment is simply an asset. That is all it is. I really could care less that you happened to have lived in it and are all emotional about it because you raised your family in it. "Fuck you. Go home and play with your kids."

The real estate market in this region is in for a world of pain that very few recent participant have never even dreamed imaginable. The RE market is going to become plain vanilla and boring again - as it has been for most of existence - just after we get rid of the excessive fluff and price inflation we have seen over the past 8 years.

But keep on talking like you have a clue what how an asset market works because you happen to live in your home or feel an emotional attachment to your properties. You aren't selling your kids, but a pile of wood, rock, steel and dirt.

And by the time I am placing bids on properties 2-3 years from now, you'll wish you would have sold 30% below today's "comps".

"Alpine292 sounds like a majorly pissed off broker I dealt with on a W. 70th property. She told me that I was "delusional" and that I was "out of the ballpark.""

Haha, so true. He claims he isnt a broker, but thats unlikely based on all his comments here.

I could do without the f***k you, but Memito is right. It's fascinating to watch the rhetorical contortions into which some people are twisting in order to avoid one simple fact: Manhattan residential real estate is a depreciating asset the purchase of which in the current U.S.economy is fraught with enormous downside risk. Given current market trends, it would be stupid not to offer 30% below asking prices, or contract prices at the peak because sellers refuse to acknowledge the brutal fact that what goes up must come down.

"Given current market trends, it would be stupid not to offer 30% below asking prices, or contract prices at the peak because sellers refuse to acknowledge the brutal fact that what goes up must come down."

Yep, and that logic is being driven by two factors.

1) Sellers who refuse to admit the direction the market is going (DOWN for those who cant tell).

2) Brokers (people like alpine) who wishfully attempt to manipulate the market by feeding into the owners mind that prices will be going up, AND at the same time feel obligated to rudely respond to buyers with a '2008 peak' mentality.

I like your style memito. If we could clone you - oh I dont know say '9,992' times for a week or so maybe the cold shower of reality would wake sellers up to the new economic paradigm that we might be locked in for - a lost decade???

I know, I know, most of you don't care about real estate anywhere but nyc. I heard that on a previous thread but I watch a market where I used to own a second home on the coast of NC. That market started a similar decline in the fall of 2006 and some of the owners still haven't realized that their houses will not sell for what they were selling for pre 2006. Go to wendywilmotproperties.com and look at the "reduced properties". These owners wish they had priced their properties right from the getgo but still had in their heads that their houses were worth "bubble prices". Many of those houses have been on the market FOR YEARS and the sellers still will not lower their prices further and some of the other houses have not lowered their prices at all. The glut of inventory is huge. Just an anecdote but I think Julia has mentioned at other times that the Florida coast has been the same way. I am planning to wait several more months to a year, study the market up there and help my daughter buy a condo from a realistic seller/estate when the time seems right for her and as advised by members of this forum several weeks ago. If I feel the property is overpriced, I certainly would offer whatever it was worth to me (even if it was 30% less) than asking. If it doesn't work out, worse case, she will continue to rent.

blossom, there's a moment when the resistance of sellers starts really weakening. For example, if you've been following the news, you've heard about the general uptick in sales in FL, CA, NV, etc. in the last 3 months. The number of sales are not bubbleicious but not a dead market either. Median prices there are already 50% down and 50% of the sales actually occurring are foreclosures. The other 50% are guys who've understood that it'll be worse to wait and are chopping accordingly. So there's not a lot of room to play stubborn seller down there. In those states it is already a fact that sellers who remain stuck in a pre-downturn price, if they have to sell, will end up losing 60% or 70% when it's all said and done, easily. They're so much behind the curve they're non entities.

> An apartment is worth what the comps are selling for.

"The true value of a thing is what someone else will pay for it".

Something SUPER important in a crash... old prices are irrelevant.

this is an interesting question whether it applies to rent or purchase.

i don't think you should worry too much about where you should bid. bid whatever you feel you can get away with. it is only a starting point. it will help you realize several things: whether or not you are in the ballpark, how motivated the /renter seller is (by their response) and will just get the ball rolling in the process. most people don't put in their opening bid at their final price - i think. if you will only pay $5500 for that rental then tell them you will offer $4500. if you really like it add that you will sign a multiple year lease. you may end up working your way up to that $5500.

The most horrifying thing about this thread is that alpine admitted buying a PT Cruiser.

lol

jersey folk.