In real estate, the asking price is how much the seller lists the home for. But you may be able to negotiate for a lower price.
The asking price is the listed price of a property
The selling price is how much the property is actually sold for
A real estate agent can help the seller determine the asking price and negotiate for a better sale price
Whether or not a seller accepts an offer below the asking price depends on the conditions of the current real estate market
The asking price is how much a home seller lists their house for. Also known as the listing price, this is the amount the seller thinks the buyer should pay. But buying a home often involves negotiation between buyers and sellers, so the asking price is not always the price at which the house is actually sold.
If you want to buy a home, know that you can always put in an offer for something other than the asking price. Depending on the real estate market — supply and demand for homes — and personal circumstances, the seller may be willing to accept an offer lower than the asking price or concede to paying some closing costs. But negotiating can be tricky, so it’s important to have a good real estate agent on your side.
Asking price is how much the property is listed for, but that isn’t necessarily what it is sold for. The listing agent, the real estate agent who works with the seller, will determine an appropriate asking price by a comparative market analysis looking at comparable sales in the area.
The sales price is what the buyer ultimately ended up paying for the house. You can find the sales price history of the home by checking with your county’s office of public records, or by asking your real estate agent. Online real estate marketplaces may also list this information.
Whether you’re a buyer or seller, you should keep an open mind and think about a price range, not just a specific price. Your asking price should be, most of all, affordable for you. Buying a house you can’t afford can leave you “house rich, cash poor”, putting you at risk for missing mortgage payments in the future. Use our mortgage calculator to find out how much house you can afford.
In a seller’s market — when the supply of homes are low and the demand for them is high — putting in a lowball offer may put you at a disadvantage. In the least, the seller may be offended, and at worst you may waste negotiating time and lose out to other potential buyers who are more willing to pay the asking price. In highly competitive real estate markets, it’s not uncommon for a bidding war between buyers that results in the house being sold for more than asking price.
In a buyer’s market — where there is a high supply of homes and low demand for them — you will have better luck when you make an offer below the asking price. Even if the seller doesn’t accept your initial offer, they will be more willing to negotiate.
But just because you can put in a lowball offer doesn’t always mean you should. For example, the house may already be listed below the market price (maybe it’s in foreclosure).
And just because the seller doesn’t accept your low offer doesn’t mean you should walk away. They may be willing to give you seller concessions if, for example, the home inspection reveals problems with the house, or if the house seems unlikely to sell within their time frame.
An experienced real estate agent can prove extremely useful in any of these situations for either both sellers and buyers. They’ll help you navigate the process and come up with a reasonable offer and counteroffers.
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Elissa is a personal finance editor at Policygenius in New York City. She writes about estate planning, mortgages, and occasionally health insurance. In the past she has written about film and music.
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