A home is probably the most expensive thing you will ever buy – and it’s easy to get caught up in the price of the home and the down payment. When preparing to buy a home, or simply saving for
Are Lowball Offers Effective
You’ve finally found your dream home – you’re willing to do what it takes to get it, but you don’t want to over pay.
Your agent should be helping you determine the value by sending you what has sold recently in the neighborhood. Another useful way of determining how much to offer is by looking at the Average Sale Price/ Original Price ratio.
The average sale price/ original price ratio will tell you, on average, what percentage of the original asking price homes are actually selling for.
The sale price/ original price ratio for Philadelphia in September is 94.6%. This means that if a home was originally listed at $200,000, on average, it sold for $189,200.
Keep in mind that this also includes any price reductions the sellers made before an offer was made.
While this ratio is at 94.6% for Philadelphia, it is important to know the statistics for your specific neighborhood. For example, the sale price/ original price for East Passyunk in September is 108.5%, while on the other side of Broad Street in Point Breeze the ratio is 78.7%.
Use this ratio when making offers to decide how far away from the asking price you should offer.