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Old 07-11-2008, 04:01 PM
 
Location: Lake Wylie, SC
622 posts, read 1,583,676 times
Reputation: 475

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Quote:
Originally Posted by johne482 View Post
Offer 110. You think I'm nuts? Well look at some of the things you said.
1) Feb.
2) Agent"You can be aggresive"
3) Buyer's market
4) I'm nervous. First time buyer

What are they going to say? Get lost? Will you take that personally? You're cheap! OK-yes I am. OR--Hey we can't take that price BUT is there room to talk? Now you got something going..work it from there.

BTW-if they say we have someone that offered us 140--tell them "So why didn't you sell it to them?" Or -was that before today's front page news in the NY Times that even FreddieM & Mcan't pay their bills?

Good luck -Anything under 130 you owe me a beer. If you lose the house the other guy paid too much.
As a buyer's rep in todays market, I totally agree with you. Everyone in the office thought I was nut's on the last deal I closed. End result, asking price (570K), selling price (510K), bank appraisal (555K). The real result, 1 thrilled buyer!
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Old 07-11-2008, 04:08 PM
 
Location: Lenoir/Morganton, NC
148 posts, read 531,996 times
Reputation: 113
I'd go ahead an offer low. A builder isn't going to be as likely to get offended with a low offer, because they know it's just business and don't have much emotion vested in the home. The worse they can do is offer a higher counter offer. Especially since it's been on the market and your Realtor says you can be aggressive, I'd start low and see what they counter with.

btw, it's normal being nervous, especially on your first home. I don't know whether or not to classify it as easier or harder. I like it more, just because I'm not having to deal with a landlord [or apartment living], and can pretty much do what I want with the house and yard [no HOA either], but it was a lesson on budgeting and planning ahead. It's cool knowing that you own something, and will get something out of it if/when you move again, but keep in mind you'll also have to do any repairs that come up later down the road, so go ahead and budget for them and add a "household fund" into your savings plans, and you should be OK.
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Old 07-11-2008, 04:58 PM
 
160 posts, read 357,710 times
Reputation: 103
I'd sit down with your realtor and LOOK at the comps, both solds and active listings.

I'd also go into a purchase right now with the understanding that values will probably drop a min of 10% in the next 18 months. But if you're in for the long haul, don't let that bother you.

You could also talk to an appraiser - they will provide you with an unbiased, 3rd party opinion of what the value of the home is worth.
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Old 07-11-2008, 05:36 PM
 
Location: Lake Wylie, SC
622 posts, read 1,583,676 times
Reputation: 475
One important factor for you to consider is that you are a rare commodity in todays market (a ready, willing, and able buyer). With that in mind, go for the gold!

One thing to take into consideration is the financial health of the seller ( I assume it is a builder in a development, based on your previous posts). A very important factor is how many spec homes the builder has on the market. They are being pressured by their lenders to reduce inventory and cut their carrying costs. This gives you a very strong bargaining point in the negotiation. Recently, I have actually seen builders bring money to the table to meet the demands of the lender.

The unfortunate point is that you are emotionally involved in seeing a quick resolve to the negotiation. Personally, I do not believe a mysterious buyer with your qualifications will suddenly appear. Listen to your realtor and I am sure you will achieve your dream.
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Old 07-11-2008, 06:06 PM
 
549 posts, read 1,561,832 times
Reputation: 231
Go for it but don't expect the seller to bite. At only $150k the seller may not have a lot of room to negotiate.
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Old 07-11-2008, 06:33 PM
 
Location: State of Being
35,885 posts, read 67,004,073 times
Reputation: 22370
Now that I know this is a builder, attack it from every angle. Low-ball AND ask for closing $$ or other concessions and/or upgrades. Why not?

All they can say is NO. They want to sell the house. You want to buy it. Ya'll can work it out!!!
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Old 07-11-2008, 06:40 PM
 
364 posts, read 1,042,331 times
Reputation: 95
Just wanted to let you know that I bought our Spec. house in Dec this year and our home was listed at 180ish (high, then dropped to low) we settled on 174 (after trying to get 170). This was at the VERY start of our subdivision. They did not bargain aggressively with us. We walked away a few times saying, "Well, that's all we could afford". They'd call us a few days later to offer something else or "see what we can do". We were pretty happy with our purchase. However, prices in the community have dropped since then, and they stopped building Spec houses. I did find out that our neighbor who has a larger home than us, paid only $2,000 more. Oh well. I remember as we signed the "contract" that day to put down our earnest money, another couple called wanting to buy the house.
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Old 07-11-2008, 06:44 PM
 
Location: Auckland, NZ
5 posts, read 15,651 times
Reputation: 13
Offer whatever the heck you want. Offer $1 if you want. The real estate agent must present all offers.

People don't like negotiating. It's uncomfortable, so we all have a tendency to give people almost what they are asking. Why put all that energy into trying to bridge a wide gap between asking/bidding prices when it might not work out, and we risk hurting feelings?

...but we're all adults. They can say yes or no to whatever they like. They don't feel obliged to accept your offer just because you offered it, so why should you feel obligated to pay what they are asking?

So once you know all this, make it work for you. Go offer anything you think is a bargain. If you know you'd be happy getting the place for $100k, offer $100k. They don't have to say yes, but you might be the only person negotiating with them and they might be happy to hear from you. You can always offer $120k next week if you decide you'd be happy with that price.

All that said, the way I work out value is based on earnings yield. Ask a couple people about a possible rental income for this property. Let's say you can get $1000/month. Work out what kind of expenses are involved in owning that property (eg. some maintenance, taxes/rates etc.) and take this into account. Then compare this figure to interest rates to get a value for the house.

Hypothetical Example:
(I'm in New Zealand, so my numbers are going to be off, use you own!)

Rent $1000/month x 11 months (1 month vacant) = $11,000/year
Less taxes/rates/expenses of $2000/year = $9,000/year income

$9,000 divided by 6.5%(mortgage rate?)=$138,461 value for the house.


This would also mean that if you rented the place out for the above rent, it would pay its own (interest only) mortgage, even if you borrowed 100%. You can fiddle with the numbers to achieve what you want. $800 rent, 2 months' vacancy, I want to get 10% return (instead of 6.5%). The value is totally up to you, NOT to the seller. It's only when you agree that the house gets sold.

So stand up and take control of the purchasing process! Good luck!
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Old 07-11-2008, 07:57 PM
 
7,104 posts, read 9,697,599 times
Reputation: 2564
As I told my friend Steve on another thread (his 5th) there are a LOT of smart people on board here.
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Old 07-12-2008, 12:27 PM
 
60 posts, read 164,860 times
Reputation: 28
Thank you all for your advice. I made my offer today!!! The asking price is $149,900. I offered $132,500! I also added all types of concessions in the offer. LOL! We'll see how it works out. The seller said, he doesn't think the builder will bite. That didnt bother me at all! The house has been sitting there since February and i know they want to sell it!! Worse case is they'll come back with a higher price OR simply walk away. I doubt they will walk away. I came prepared with my pre-qual letter and everything! We'll see how it works out. I should hear something no later than Tuesday. This is so exiting!! Also, if they don't want to work with us, we'll just build a home in that community instead. I hope we get the one we placed an offer on today! Fingers crossed. I'll keep you all posted.
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