First, understand these terms:
Seller’s Asking Price = what they are willing to accept to no longer have access to enjoying and being responsible for the property
Buyer’s Offer Price = what they are willing to pay to have access to enjoying and being responsible for the property
* The asking and offer prices should reflect the data collected on recent sales, known as comparables, but they don't have to. THE MAIN THING TO REMEMBER IS THAT PRICE IS WHAT ONE INDIVIDUAL IS WILLING TO LET SOMETHING GO FOR AND WHAT ONE INDIVIDUAL IS WILLING TO TAKE FOR.
Now, look at this comparison between buying milk and buying a house.
- A buyer can choose from different sellers offering milk (Generic, Deans, Mori’s)
. . . just like buyers can choose from different sellers selling a home (Developer, Rehabber, long time residents).
- A buyer can choose from the different sizes of milk containers that are offered (pint, gallon, CHUG)
. . . just like a buyer can choose from the different sizes of home offered (2, 3, 4 bedroom).
- A buyer can choose from the different qualities of milk (2%, Skim, Chocolate)
. . . just like buyers can choose from the different qualities of a home (brick, frame, updated)
Question: So, why if buying a house is so much like buying milk, why don't we haggle on the price of milk like we haggle on the price of a house?
Answer: It is because you know that if you don't want THAT milk at THAT price for THAT type, either 1. you go to another market and try to find it the way that you want it, or 2. you pay what the current market is asking you to pay because you just need it, OR you realize that you are going to waste the 45 cents that you would gain in a cheaper price at the store down the block, but would spend 55 cents in gas to get there, OR you have to have it because you have someone(s) at home whom you need to get it for
As home buyers, we agree to the terms of a specific house in a specific location for the same reasons as we buy that specific milk from that specific store. So go into your bidding for a house the same way that you go in for buying milk, except that you have an OPPORTUNITY to ask the seller to reduce their price of the house based on the terms of the purchase that you are offering (maybe the timing, maybe the down payment or earnest money amount, type of financing, etc.).