What's the best way to ask for a significant decrease in the asking price of a house?

Adele,

I need more information to give you a really good answer.

However, I will make some assumptions that may help your situation.

The first thing to do is to be sure that a price reduction is warranted if you think the house is priced too high. The best indicator for that is the # of days the house has been on the market compared to similar ones.

You can use www.zillow.com or www.realestateabc.com to run some comps on the house to show the owner that the price is too high.

You can approach the owner and ask them when their listing expires with the Real Estate Agent. If the listing is about to expire, then you can tell the owner you want to buy his house, but you will do it after the listing expires. This way, the owner won't have to pay 6% of his equity to the Real Estate Broker and you and the owner can discuss how much of that savings can be applied to a price reduction. For example, if the house is worth 500K, then the owner can sell it to you privately for 470K and net out the same amount of equity that he would if he sold it through an agent. There are some fees that do have to be paid to ensure the paperwork gets done properly and that runs about 1% typically. So, figure a 5% price reduction if you can go this route.

Another thing you might try is seller financing. If the seller has a lot of equity, then they might be willing to lower their price and to loan you some of the money you need to buy the house. They make money from you on the interest payments you make back to them on the loan they gave you to buy the house. Again, I would have to know the parameters on the house you want to buy in order to run some calculations for you.

You can also ask the owner to reduce the asking price if the house has been on the market a long time and he can ask his agent to make the adjustment.

If the owner's listing is not going to expire soon, then the owner can work with his existing agent to agree to sell his current house through his agent and to buy his new house through his existing agent with the following commission plan: He tells his agent he will give him 1% commission on the sale of his house and he agrees to buy his new house through the same agent where agent will get a commission the purchase of the new house. This will allow the owner to keep his agent and also give you a 5% price reduction to net out the same equity on his current home.

If you already own a similar type of property, then you might be able to work out something called a 1031 exchange. Some owners do this to defer paying capital gains tax until a future date. You will need to look at the numbers to figure out whether this can work for you, but it might be a good option.

If the owner is in pre-foreclosure, then you can make a lower offer on the asking price. This is called a Short Sale and it is up to the bank as to whether your low ball offer is accepted. This is dependent on the local market and the lender's requirements. This can either be a quick process or take up to 11 months for the bank to approve.

Hope this helps !