Unfortunately there is no hard and fast rule. In my book the name of the game is getting as much information as you can and using it to your benefit. Many people would consider me ruthless in the way I negotiate as I conduct a lot of research into the seller to determine where they are and more importantly where they are going. I look for every edge I can find and use the information discreetly so as not to personally offend someone. A seller must not only want to sell at a given price but must be able to in today’s market. So if they own $500K and are asking $500K, your $400K offer is not likely to succeed as the person is more likely headed toward foreclosure or a short sale.
It’s also very important to understand that a sellers motivation does not come from where they are but rather where they are going. Learning that someone is headed for divorce (i.e. both names on title but only one’s clothes in the closet) is valuable to know. There are lots of other tricks of the trade just as valuable and that’s what my clients hire me for.
