Hi all, new to this forum.
My wife and I are looking for a house in the Altadena/Pasadena area in California. We have been preaproved and are looking for homes in the 400k range. We have an agent who is working with us to find our new home. I did some research on sold homes and it appears to me that lots of homes in the areas mentioned are selling in the average of 25k less than listed price in the past 6mos, some a lot less and some just in that range. We are looking for a home with 3 beds, 2 baths and 7500 sf yard or more. I found a house that is listed at 398k but it only has 1 bathroom, If we decide to make an offer, what is a safe starting offer, and why? Assuming the final price would be about 25k less than listed. thanks.

what is a safe starting offer, and why?

A safe starting offer will be a low offer. discounting a listing price is not a valid appraisal technique. you want to look preferably at SOLD comps within the last thirty days, but you may have to go back farther than that.

I know the Altadena/Pasadena market quite well, and there's a wide range of prices depending on the particular neighborhood, lot size, etc.

The answer will depend on a multitude of questions. How long has the house been on the market? Are there any other existing offers on the table? What kind of condition is it in relative to similarly-sized properties in the area? What (to reiterate Shana's point) actual dollar amounts are similar homes selling for? If the house is over- or underpriced, then that will make a big difference.

Your agent is probably the best-qualified person to answer that question with regard to the specific property. There are way too many variables to really discuss in theoretical terms.

Since you are working with an agent already, it could very well be a violation of our agency rules to give you any advice or opinions here.

If a lot of homes are selling for $25k less then what are the rest selling for? Full price, over full price?

What you need to do is get a copy of the recently sold houses that are similar to this one and compare them to this one. You have to compare size, age, condition and location.

It is possible this house is overpriced and the sellers might come down in price but it is also possible this house is priced very competitively and they won't come down in price.

It is also possible the sellers owe too much and can not come down in price.

There's nothing scientific about "Listed Prices".

If there were, Sellers could just say "I want $350,000, so because properties sell for $50,000 less than Ask, or they sell for 12½% below Ask . . . . then all I have to do is price it at $400,000 and voilą, someone will offer to purchase it for $350,000 !"

If that were the mechanism, why not price a $250,000 house at $500,000 and get $440,000 or so ?

Initial Asking prices represent the most that Sellers can expect a Buyer to pay for what they've got; in their wildest dreams. After a while, most of them will make the slow and painful descent down to reality . . . . but some keep their heads in the clouds forever.

A lot of my sellers don't give a hoot about how "other" homes sell at $xx,xxx below list price. THEIR home is "special."

There isn't a home out there that isn't "special" - they're all "special", one-of-a-kind, blood, sweat, and tears....

I paid $700,000 for it and I WANT $700,000 for it. I don't care about your facts and your stats saying my home is only worth $500,000 today. I paid $700,000 and I WANT $700,000.