It never hurts to put an offer in. And you won’t know unless you try. Yes, the sellers may be unrealistic and they probably have a strong emotional attachment to their home; the home does hold a lot of value to them. But the good news is that with an overpriced home, you, the buyer, should have very little competition.
First, you should look at how long the property has been on the market and have there been any price reductions. If it’s new on the market, then the seller my be less likely to negotiate. But if it’s an old listing, it may be a good time to make an aggressive offer. Your agent should have a conversation with the listing agent to guage the sellers’ position.
Then you should put together an offer and submit the comps that substantiates your number. The worst thing that can happen is the seller says no. And even then, I wouldn’t give up. If the property is still on the market in a few weeks or months, I would approach the agent again to see if the seller has any change of heart.
I’ve had buyers in both scenarios. I had a client last summer who fell in love with a condo but the sellers were priced way above market. We kept going back to the seller and after a couple of months, we were able to come to a number that satisfied both buyer and seller. The property appraised at the sales price and all parties were happy. Then I had another buyer a few months later who wanted to make an offer on a home but the seller had unreasonably priced the home. It was priced even higher than the new construction that was on the market. The listing agent let me present the offer to the seller in person. And even though we had the comps to justify the offer price, and even though the listing agent was on our side, and even though the seller agreed that the market was down, she was adamant that her home was worth the asking price and she wouldn’t budge. And you know what happened? My client walked away with no regrets and the seller eventually took the home off the market.