How Much Below Asking Price Should You Offer?

Quick Answer

There's no universal answer. The right offer depends on how long the property has been listed, comparable sales in the area, current market conditions, and how motivated the vendor is. In a hot market, offering below asking can cost you the property. In a slower market, 5-10% below is often reasonable. The data matters more than a rule of thumb.

Why "Offer 10% Below Asking" Is Bad Advice

You've probably heard the rule: always offer 10% below the asking price and negotiate up.

It doesn't work that way.

A well-priced property in a competitive suburb with low days on market will likely get multiple offers. Coming in 10% below might not even get a response. A property that's been sitting for 90 days in a suburb with rising stock levels is a completely different negotiation.

The right starting point is comparable sales, not asking price.

How to Figure Out What a Property Is Actually Worth

Before you decide what to offer, you need an independent view on the property's value. This comes from:

Recent comparable sales (comps) Look at properties with similar features that sold in the same suburb in the last 90 days. Similar size, similar land, similar condition. This is the most reliable anchor.

Days on market A property that has been listed for 60+ days is telling you something. Either it was overpriced, something put buyers off, or the vendor has unrealistic expectations. All of these create negotiating room.

The asking price itself Asking price reflects vendor expectations, not market value. Sometimes they're aligned. Often they're not. A vendor who set their price based on what a neighbour got six months ago may be overpriced relative to today's market.

Market conditions Is stock rising or falling in this suburb? Are clearance rates up or down? Is this suburb trending hotter or cooling? These macro signals affect how aggressively you can negotiate.

Reading the Situation: Four Scenarios

Scenario 1: Hot market, well-priced, low days on market

The property has been listed for 14 days. The suburb has low stock and fast clearance rates. Comparable sales suggest the asking price is fair or even slightly under where the market has been trading.

Offer strategy: Don't start too low. You risk losing the property to another buyer or signalling that you haven't done your research. Starting at 2-3% below asking with a clean offer (minimal conditions, fast settlement) is more likely to succeed than a lowball with strings attached.

Scenario 2: Property has been listed 45+ days

The property launched at $950,000. It's now been on the market for seven weeks with a price drop to $920,000. Similar properties have sold around $895,000-$910,000 in the past 60 days.

Offer strategy: You have room to negotiate. Start around $880,000-$890,000. The vendor has already adjusted expectations. They know the market isn't agreeing with their original price. A reasonable offer with a short settlement timeline gives them something to work with.

Scenario 3: Deceased estate or motivated vendor

Sometimes the circumstances around a sale create genuine motivation. A deceased estate, a divorce settlement, a vendor who has already bought elsewhere and is carrying two mortgages.

These situations create negotiating room that has nothing to do with the market. Your buyer's agent or research may surface these signals. They're worth paying attention to.

Offer strategy: The vendor needs certainty and speed as much as price. A clean offer -- minimal conditions, fast finance approval, flexible settlement -- can be worth as much as an extra $20,000-$30,000 in price.

Scenario 4: Auction market

Auctions set the price by competition, not negotiation. If a property is going to auction, the strategy changes entirely. You need to know your limit, stick to it, and bid with confidence. Trying to negotiate an auction property before auction is possible but vendors often won't engage unless you're prepared to offer a price that takes the property off the market entirely.

Practical Example

A buyer is looking at a three-bedroom house in Inglewood, Perth. Asking price is $875,000. It's been on the market for 38 days. Two comparable properties sold nearby in the last 60 days: one at $840,000 (similar size, similar condition) and one at $855,000 (slightly renovated).

The buyer's analysis suggests fair value is $845,000-$860,000.

They open at $835,000 with a 30-day settlement and pre-approval already in place. The vendor comes back at $865,000. They meet at $850,000.

The asking price was $875,000. They paid $25,000 below asking -- not because they followed a rule of thumb, but because they knew what comparable properties had sold for and opened at a position they could justify with data.

Negotiation Checklist

Before making an offer:

Pull comparable sales from the last 90 days in the same suburb (same type, similar size)
Note the asking price and the date first listed
Calculate days on market
Check if there have been price reductions since listing
Assess your competition (is the agent indicating other offers?)
Know your maximum -- decide before negotiating, not during
Consider your offer conditions (finance, building inspection) and their cost to the vendor
Have your pre-approval ready to attach or reference
Decide your settlement preference -- a shorter settlement can be worth more than price alone to some vendors

Key Takeaways

Asking price is not the same as market value. Base your offer on comparable sales, not the listing price.
Days on market is one of the clearest signals of how much negotiating room exists.
In a competitive market, a clean offer with minimal conditions can win against a higher offer with more strings.
There's no universal discount percentage. Context determines what's reasonable.
Know your maximum before you start negotiating. Emotional decisions in the moment are how buyers overpay.

FAQ

Is it rude to offer below asking price? No. Vendors expect negotiation. What matters is whether your offer is grounded in market evidence. A lowball unsupported by data is more likely to end negotiations than a considered offer with comparable sales attached.

Should I reveal what I'm willing to pay? Not upfront. Start at a position you can justify and work from there. Revealing your maximum early gives away your leverage.

How many offers should I expect before reaching agreement? In most private treaty negotiations, 2-4 rounds of offers and counteroffers is normal. If you're more than 5 rounds in with no agreement, either the gap is too large or something else is affecting the vendor's decision.

What happens if another buyer comes in while I'm negotiating? This is the vendor's leverage. If there's genuine competing interest, you either commit or step aside. Having pre-approval and being ready to exchange quickly removes this risk.

Make Smarter Offers with Marketli

Marketli gives you suburb analytics, comparable sales data, and tools to analyse properties before you make an offer. Run a free property analysis before your next negotiation.