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Anyone house hunting right now knows that we’re in the midst of a seller’s market across much of the country. Homebuyers may find they have to offer much higher than the listing price to compete with other buyers. But the tides may change as the housing market corrects itself, and the buyers will have more leverage one.

How much to offer on a house depends on the market (you need a buyer’s market), what shape the home is in, and the seller’s needs. But if you have the right conditions, you can sometimes successfully make an offer on a house for less than what the seller is asking. Let’s take a closer look at what you need to know before you make an offer below the asking price and how to do it successfully.����

When does it make sense to make an offer below asking?��

What the real estate market in your area looks like will determine whether you can make a successful offer less than the asking price. If you’re currently in a buyer's market, with tons of available inventory and homes that sit on the market for a while, you will have more negotiation power with the sellers. Your real estate agent will help you determine how competitive your local market is and if you should make an offer below the asking price.

If you're in a seller's market, then you may end up doing the opposite: making an offer above asking price.

Reasonable offer chart

What's considered a reasonable offer depends entirely on the market as well as the condition of the house. Here's a list of what different offers look below the asking price.

Tips for making a low offer

If you want to make a low offer on a home, go about the process the right way. Here are some helpful tips that will make it easier to find the right number to propose and will teach you how to sweeten the deal for the seller so they are more likely to accept a lower price.��

• Find out what matters to the seller. Chances are, price isn’t the only thing that the seller cares about. For example, they may want to do a while they look for their new home. See what you can do to make your offer appeal more to the seller even if it’s lower than their asking price.��
• Be accommodating. If the seller can be flexible on the price, can you be flexible on the closing date? How about minor repairs? For this offer to work, you need to make sure both parties are happy with it.��
• Limit contingencies. If you agree to waive contingencies or shorten the time frame on some of them, the seller may be able to overlook a slightly lower price.
• Pay cash, or put more down. If you can’t pay cash, put down a higher down payment amount to show the seller that you’re financially stable and that this deal is very likely to go through.����
  

There’s never a guarantee when you make an offer on a home, even if you offer well above their listing price. Work closely with your agent to determine when it’s worthwhile to make a lower offer. If you play your cards right, you may save a pretty penny.��

→ Here's what happens after your offer is accepted

How much less can you offer on a house?

There aren’t any set rules regarding how low of an offer is appropriate. Again, your real estate agent should be able to help you formulate a suitable offer. How low you can go will depend on if other offers are on the table, how eager the seller is to sell quickly, and how long their home has been on the market. If you have your heart set on a particular home, it’s important to remember that sellers will typically take the highest offer they get, so have your agent inquire as to whether or not the seller has other offers on the table.

While there are pricing rules for offers below the asking price, the following guidelines will give you an idea of how much lower you can go when you sit down to create your offer.��

Offering 1% to 4% or more under asking

While asking for as low as 1% less than the listing price may not seem worthwhile, if you buy a $1,000,000 home, you could save $10,000. That’s a lot of savings that will bring your monthly mortgage payment down, or you can put those savings towards new furniture or to fund repairs around the house. A small discount like this is a good thing to ask for if you’re paying cash (which is very appealing to sellers) or if you’re in a market that currently hovers between a buyer’s market and a seller’s market.��

Offering 5% to 10% below the asking price

It will be easier to get away with offering 5% to 10% below the asking price, especially if your real estate agent has strong negotiation skills.��

Your agent should study nearby homes to see what selling points they have, as this will help you decide how much to offer on a house below asking price. If other homes in the same price range have new appliances or recently remodeled kitchens, and the home you want to put an offer on doesn’t have these things, you may be able to reference those homes during your negotiation. Do ample research so you can argue what the home’s true market value is. Many agents will recommend slightly higher listing prices with the assumption buyers will want to negotiate down, so don’t be afraid to try to snag a deal — especially if the home didn’t sell quickly.��

Offering 20% or more below the asking price

To make a significantly lower offer of 20% or more, you have to be in a buyer’s market where there are many more houses for sale than buyers. If a home won’t sell after six or more months on the market, that’s a sign it’s a good time to strike with an offer this low. What condition the home is in also enables you to make a much lower offer, especially if pricey home repairs are necessary.��

You should also take a look at what other homes in the neighborhood recently sold for. If nearby homes recently sold for much less than the original list price, that may work in your favor.��

It’s also helpful to find out why a seller wants to move. If they need to relocate for a new job, they may be eager to get the show on the road and accept a lower offer.��

What are the risks of making a low offer?

Your real estate agent must be upfront and honest with you about your chances of making a successful offer below the seller’s asking price. They should do research about comps (aka comparable homes) in your area so that you all better understand if you should make a lower offer or if it’s safer to stick to the seller’s ideal price.

Of course, some risks come along with offers that are below the asking price:��

• The seller may not take your offer seriously and, as a result, may refuse to negotiate with you.
• You may waste both your time and your agent’s time if the offer is too low for the seller to consider seriously.
• You may miss out on your dream home if another buyer makes a more competitive offer.

When you buy a home with ���ϲ�����, you'll work with an experienced local agent to help craft your offer.

When should you not offer below asking price?

Yes, there are situations where offering significantly under asking price may not be advisable. In a seller's market with limited inventory and high demand, making a lowball offer could result in your offer being rejected outright or facing competition from other buyers. Additionally, if the property is priced competitively or in high demand, offering too far under asking price may not be taken seriously by the seller.

FAQs

Here are more details about making a low offer on a house.

How much should I offer below the asking price?

There is no one-size-fits-all answer to this question as it depends on various factors such as the local market conditions, the property's desirability, and the seller's motivation. A common starting point is to offer around 5-10% below the asking price, but it's essential to work closely with your real estate agent, analyze comparable sales, and consider any unique circumstances to determine a competitive yet reasonable offer.

How can I determine the right amount to offer under asking price?

Researching comparable sales, also known as "comps," in the area can provide valuable insights into the market value of the property. Your real estate agent can help you analyze these comps, consider any unique features or drawbacks of the property, and assess the seller's motivation to arrive at a suitable offer price. Balancing your budget, market conditions, and the property's value will guide you in determining the right amount to offer below asking price.

Can I offend the seller by offering less than asking price?

While offering below asking price can sometimes be seen as a negotiation tactic, it's important to approach it respectfully and professionally. Sellers are aware that negotiations are part of the home buying process, but excessively low offers may be perceived as disrespectful or unreasonably undervaluing their property. It's crucial to maintain open lines of communication and work with your realtor to present your offer in a fair and well-reasoned manner.

What other factors should I consider besides the asking price?

While the asking price is a significant factor, it's essential to consider other elements such as the property's condition, any needed repairs or renovations, local market trends, and the seller's motivation. Additionally, factors like the length of time the property has been on the market and any competing offers can influence your negotiating strategy. Working closely with your real estate agent will help you evaluate these factors and make an informed offer that reflects the property's overall value.

Here's what else to ask yourself when buying a house.‍