This is a tough question without knowing more of the background, and I suspect the answer varies considerably depending on the geographic area you’re in. In our area of metro DC, many agents would advise their buyers that more than 10% off of list price is considered ‘low ball’. Does that make it offensive? Not necessarily. A good agent will investigate and help you determine what’s a fair market value to offer for a property you’re considering, and present it accordingly to the other side. Some things to consider:
What are the comparable sales that are pointing you towards your offer price? Are they within the past 90 days? Within a similar season (late winter but pre-spring run up in prices) as last year? If there are clearly similar homes that your agent can walk the listing agent through, then it’s not offensive — it’s fact. But it needs to be presented in the right way. There are tactics to this…for example, a phone call with a simple “I’m trying to find comps to justify this price and having a hard time…can you send me which comps you used to come up with this price? The ones I’m finding are all quite a bit lower, and I don’t wish to offend your seller or waste anyone’s time.” This is the sort of thing an experienced agent can guide you through!
Is the neighborhood trending up or down? How many homes like this one are likely to come on the market in the next few months? What is the seller’s situation and his estimated carrying costs (i.e., what did he pay for the property and can you ballpark how much his mortgage is? Maybe it’s a very low cost and he’s not opposed to waiting if his carrying costs are low). Has your agent called the listing agent to see what the situation is? It could be that the agent knows it’s overpriced but the seller is just unreasonable. Has the seller turned down offers previously that could help you narrow a range of what the seller is likely to accept?
Many agents will advise you not to write an offer if it’s too low because the seller is unlikely to accept it, or even counter offer. However just because an amount is what the seller will accept doesn’t mean it’s the market value! Sometimes it’s better to pass on a house if you think something similar will come up in the next few months that is in a lower price point for similar condition, or if the seller is just unreasonable. A look at historical sales in the neighborhood in the past 12 months will tell you that, combined with a live discussion between your buyer agent and the listing agent. But before you decide to move on, discuss these questions with your agent to determine whether it’s worth the time to submit an offer, and how long to wait for a response before you move on to a reasonable seller. On the other hand, if the comps support a higher value, then in the absence of special circumstances, you might just be wasting valuable time, and more likely to offend a seller.