Expert: Hans Weber, Licensed Broker Associate - 4/6/2007

Question
Hi, I know you are in NY, but perhaps you can answer my question anyway. I live in Northern/central NJ and was wondering what buyers' are typically offering now in relation to asking price. I have a cousin who is a real estate agent and she told be that in her area (somerset county), lots of buyers are offering 20% below asking. Is this true?


Answer
Hi Jennifer,

Sorry about the delay here.  I thought I already responded to you.

The answer is yes.

Over the last 7-8 years buyers were schooled by the media and the marketthat they needed to offer asking price or better to win a bidding war for the home they wanted to buy.  During that seller's market prices kept going up every year, more than doubling.

Last year the market changed and became a buyer's market, but seller's refused to admit it and continued the upward pricing trend.  Buyer's have refused to follow the prices upward and stopped buying causing the stagnant market.  The buyers are still out there but are only willing to pay 2005 prices.  You can see evidence of this when one of a group of homes reduces the price it sells right away.  Slowly buyers are begining to make what seem like low ball offers of 20 to 25 percent off.  Sellers have been rejecting the offers, but really need to get real and negotiate the offer since they finally got one in this market.

This is almost exactly the way it was in 1990, except then the interest rates were 10% and now they are 6.2% so today's buyers still can get cheap money and are willing to buy, but only at a lower price.

So, if you have and offer, negotiate it!

Good luck.
Hans