This is the root of being a good real estate investor, or a successful wholesaler (a person who gets properties under contract and sells them at a mark-up to others).
Many people list property for sale, at the price that some aspect of their more or less educated fantasy prescribes. In interviewing real estate agents pricing gets further distorted. Many real estate agents play the game of suggesting a high listing price with a long listing contract. Then they can negotiate that their seller accepts a lower price if that’s all the market bears. However if they lead with a low listing price, another, less ethical and less fact-based agent is likely to be awarded the listing and ultimately end up with the sales commission.
Therefore, to you as buyer, offering the price that works for you is best. It’s basically mastering the art of negotiating a deal for you that is independent of the price tag a merchant might have scribbled on the asset somewhere. The price tag is an expression of fantasy. The size of your pocketbook and the actual value are an important part of reality that must be expressed and communicated in order to buy real estate in a way that works.
Offending the seller with a low offer is possible, but we cannot caretake the emotions of others. Reality still applies for all of us. If you are realistic, a seller will hopefully be able to appreciate that.
I still drive by a vacant, eventually to be collapsing brick house regularly. All the wood components, from roof joists to floor beams are about to fail from unaddressed water leaks from a roof that hasn’t been replaced since the 1990s at best. I have spoken to the owner repeatedly over the past 20 years. He always wants to sell his dilapidated wreck that needs a $100,000 or more in rehab for the price of the newly refinished, fully remodeled Victorian home somewhere in the vicinity. It seems like he simply doesn’t understand that replacing roof framing, the roof itself, and all the other aspects that make a house a house takes money.
His price has gone up as real estate values have increased over the past 20 years, and he has never been willing to just sell the house to someone who would heal it and stop the accelerating decline of that home. His fantasy is creating the slow destruction of the underlying asset he has to sell. Generally, you will not be able to successfully deal with people who aren’t willing to have one foot in reality. This seller’s mental model creates a lose-lose-lose outcome.
Bidding an amount and having him take it or leave it works. Getting attached to an asset and wanting it at any price is never a good strategy, unless you know there is an undamaged Picasso hidden somewhere in the moldering woodwork.
Offer at the price a property is worth to you. The seller can make a decision if that amount of money is worth it to them. Then you either have something you can work with, or you keep looking for something that does work.