How to Determine What to Offer on a Luxury Home

To decide what to offer on a luxury home, you work out what the home is worth to the market today, then decide where inside that range your offer should land given how long it has been for sale, its price history, its condition and how much competition you face. The value comes from comparable closed sales adjusted for land, size, views and quality. The position inside the range comes from leverage. The terms, not just the price, often decide whether the offer is accepted. Below is the process I use with buyers before any number goes on paper.

Key Takeaways

• Start with value, not the asking price. Asking prices in the luxury tier are opinions; closed sales are evidence.
• Use days on market and price history as leverage signals. Sotheby’s reported average days on market of 62 in Beverly Hills in Q2 2026.
• Estate comparables are thin. Widen the window and adjust carefully, rather than relying on one sale.
• Real outcomes vary. 10301 Strathmore Drive, a sale I represented on the seller side, listed at $21,995,000 and sold at $20,283,800, about 92% of list.
• Price the hidden costs, especially transfer taxes inside City of Los Angeles limits, before you decide your number.

Step 1: Build the comparable sales picture

Choose the right comparables

For a luxury home, a good comparable sale is close in location, land, size, age and quality, and recent. In practice you rarely find perfect matches, so I collect a wider set and adjust. I look at:

• Closed sales in the same neighborhood, ideally on similar streets, over the last 6 to 18 months.
• Pending sales, which show where the market is now but whose prices are not yet public.
• Active and expired listings, which show what sellers want and what the market refused.
• Private sales I learn about through my network, where details can be shared.

Adjust for what really drives value

At this level, land and setting often matter more than square footage. My adjustments focus on:

• Lot size and usability. A flat, usable acre is worth more than a steep acre.
• Views and privacy. City and ocean views, gates and setbacks.
• Condition and age of systems. A recent rebuild is worth far more than an original home with the same footprint.
• Architecture. Significant architects and well preserved design can carry a premium.
• Street and micro location. Two homes a few blocks apart can price very differently.

Beware of averages

Neighborhood medians are context, not valuation. In Q2 2026 Sotheby’s reported a Beverly Hills median sale price of $4.75 million and an average of $8.65 million. Neither tells you what a specific estate is worth. Thin markets make this worse: Sotheby’s recorded just one Holmby Hills sale in the same quarter, at $22.3 million. One sale can move a median dramatically.

Step 2: Read the listing’s history

Days on market

Time on market is the clearest leverage signal. Sotheby’s reported average days on market of 62 in Beverly Hills in Q2 2026. A home that has sat well beyond that, with no price change, often has a seller who is more open to a conversation. A home that just launched, priced in line with comparables, usually is not.

Price reductions and relistings

Check whether the home has been reduced, withdrawn and relisted, or previously listed by another agent. Each change tells you something about the seller’s expectations and how the market responded. A home that has been listed at several prices over a year has shown you where buyers were not willing to go.

Previous sale price

When the seller bought matters. A long time owner has more flexibility than a seller who bought recently and has a renovation budget to recover. That does not change the home’s value, but it shapes the negotiation.

Step 3: Understand the competition

Ask the listing agent directly whether there are other offers or significant interest. A fair answer is common at this level. Also look at inventory: Sotheby’s counted 169 Beverly Hills listings and 73 closed sales in Q2 2026. More choice for buyers means more leverage, but a rare home on a rare street can still draw several serious buyers.

Step 4: Price the condition and the costs

Inspections and estimates before you commit

For an older estate, I recommend getting preliminary input on major items, such as roof, foundation, drainage, systems and permits, before you settle on a number, or making sure the inspection period gives you time to renegotiate. Renovation budgets at this level are significant and permitting timelines are long.

Transfer taxes

Holmby Hills, Little Holmby and Bel Air are within the City of Los Angeles, where Measure ULA applies to sales within city limits. For transactions closing after June 30, 2026, the reported thresholds are $5.4 million at 4% and $10.9 million at 5.5%, on top of existing city and county transfer taxes. Who pays is negotiated in the contract. If a seller expects the buyer to share that cost, your offer price needs to reflect it. The City of Beverly Hills is a separate city, so a home’s exact location matters. Your tax and legal advisors should confirm the numbers.

Carrying costs

California reassesses property taxes on purchase. Insurance, particularly in hillside and wildfire exposed areas, can also affect what the home costs you each year.

Step 5: Set your range and your opening number

With value and leverage in hand, I give buyers three numbers:

1. The supported value range from the adjusted comparables.
2. The walk away price, the most you would pay before another home becomes the better choice.
3. The opening offer, positioned to start a serious conversation without ending it.

A real reference point

Real outcomes help calibrate expectations. 10301 Strathmore Drive in Little Holmby, which I represented on the seller side with Zac Mostame, listed at $21,995,000 on September 2, 2025 and closed at $20,283,800 on November 5, 2025, roughly 64 days later according to listing records. That is about 92% of the list price, and The Real Deal reported it as the priciest sale ever recorded in Little Holmby, at about $1,975 per square foot. It shows both sides of the lesson: a final price below asking can still set a new neighborhood benchmark. It is one sale, not a rule.

10301 Strathmore Drive, Little Holmby, listed at $21,995,000 and sold at $20,283,800.

For example

A buyer looking at a home listed at $12 million that has been on the market for five months, with one reduction, might find comparables supporting $10.5 million to $11.5 million after adjusting for an older kitchen and a smaller usable yard. That buyer might open near the lower end, with a clean structure and quick close, and set a walk away price near the upper end. This is an illustration of the method, not a recommendation for any specific property.

343 Veteran Avenue, Westwood, leased at $22,000 a month with Zac Mostame of Carolwood Estates. Terms matter as much as price in any negotiation.

Step 6: Use terms to win at the right price

Price is only part of an offer. Sellers at this level often weigh certainty and convenience heavily. Terms that can make a lower number more attractive:

• Cash or a strong, verified loan approval.
• Shorter inspection and contingency periods, if your diligence allows.
• A closing date that suits the seller, whether fast or extended.
• A rent back so the seller can move on their schedule.
• A larger deposit, signaling commitment.
• Discretion about the price and parties.

Off market offers

For homes that are not publicly listed, there is no asking price to anchor against, and no public days on market. That makes the comparable sales work more important. Zillow’s national study of 2023 and 2024 sales found off-MLS homes sold at a median 1.5% lower price than comparable MLS sales, but that is a national figure across all price points, and it does not mean a private luxury seller will accept a discount. My guides on finding off-market homes in Beverly Hills and buying a home that is not for sale explain how pricing works in private deals.

Mistakes that cost buyers

• Anchoring to the list price. A list price is a starting point the seller chose.
• Offering too low on a fairly priced, fresh listing. You can lose the home and the seller’s goodwill.
• Ignoring transfer taxes and renovation costs. They change what the home really costs.
• Negotiating price alone. Terms can close a gap that price cannot.

How to read the listing agent’s signals

The listing agent cannot tell you the seller’s bottom line, but the way they respond tells you a lot.

• Questions about your terms and timing usually mean the seller cares about more than price.
• A request for your best and final suggests real competition or a seller testing whether there is.
• Quick counteroffers close to asking suggest a seller confident in the price.
• Slow responses and long silences can mean the seller is weighing options or waiting for another offer.

I ask direct, respectful questions and share only what helps your position.

Contingencies and how they affect your number

Every protection you keep in an offer has value to you and a cost to the seller. Decide which ones you truly need.

• Inspection contingency. For older estates, keep it, but consider a shorter period if you have done preliminary work.
• Appraisal contingency. Relevant if you are financing. At this level, appraisals for unique homes can come in below contract price, so plan for the gap.
• Loan contingency. Strong buyers often shorten or remove it once the lender has fully underwritten the file.
• Sale of another property. Often a significant weakness in a luxury offer. If you need to sell first, say so early and plan around it.

Writing the offer

When the analysis is done, the offer itself should be complete and clean. That means a clear price, deposit, timelines for each contingency, the closing date, any rent back terms, items included or excluded, and who pays which costs, including transfer taxes. A short cover note from your agent explaining who you are and why the terms work for the seller can help, as long as it respects fair housing rules and avoids personal details.

Get an offer analysis before you write

If you are looking at a specific home, send me the address. I will prepare an offer analysis with comparable sales, price history, days on market and a recommended range, so you can decide with evidence. You can also use the form below to start a conversation about your search.