What Percentage of the Sales Price Should You Offer on a House?

Your offer might be more successful if you offer at least 85 percent.
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When you walk into a clothing store to buy a pair of jeans, you have the option of paying the price on the sales tag or leaving empty-handed. Buying a house is far more complicated. Sellers want a good price for their home just as much as you want a good deal. Some list their homes for more than they expect to get, anticipating that you'll offer less. Unfortunately, if you can't be certain why the seller listed the home at the price he did, there's no firm percentage rule as to how much you should offer.

Risks of Starting High

If a seller lists his home for $300,000, and you offer 5 percent less -- $285,000 --the seller might immediately sign the purchase offer because he really only expected about $280,000. After he's signed the purchase offer and you receive notice that he's accepted your price, you're locked into the deal. If you find out after the fact that similar homes in the area are selling for $275,000, you've cost yourself $10,000. You can get a good idea of what the home is honestly worth by doing a little research first. If you're working with a real estate agent, she should have a list of comparable sales in the neighborhood, including short sales and foreclosures. If you make an offer in the same price range as a comparable home in the area, you probably won't go too far wrong.

Risks of Bidding Low

If you really want the house, you might be better off not going too low. If the seller asks $300,000 and you offer only $225,000, you're cutting the sales price by 25 percent, which may be too much. You run the risk of antagonizing the seller so he won't deal with you at all, especially if the reason he's asking $300,000 is because that's honestly what he expects to receive. An exception exists if comparable sales in the area indicate that $225,000 is a fair value and the seller has grossly inflated his asking price. In this case, if the seller refuses to deal, that's not a bad thing. No matter how much you like the house, you probably don't want to pay 25 percent more than it's worth.

Bargaining Tools

Other variables can affect how much you offer as well, factors that may have nothing to do with the property's value. If you're offering the seller something he may not be able to find elsewhere with another buyer, you'd probably be justified in offering 85 percent of the asking price. For example, you might have just inherited a large lump sum of money, or have prequalified for a mortgage, so the seller doesn't have to worry about the deal going through. Likewise, you could offer 15 percent less if you know for a fact that the homeowner is desperate to sell. He might be involved in a divorce or be facing foreclosure.


Your offer doesn't have to be a one-time deal. Assuming the seller doesn't refuse to work with you because you offered so little, you usually have a bit of room to negotiate. For example, if you offer 15 percent less than the asking price, the seller typically will counteroffer and ask for more. If he counteroffers, you're under no legal obligation to accept the new price just because you made the first offer. A counteroffer lets you out of your initial purchase offer. In one sense, it's like starting all over again, but this time you'll have a better idea of how much money the seller really wants.

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