Real Estate offer question--high-end home (jumbo loan, how much, house)

[busyguy7447]

I would like some advice regarding making an offer on a home.

My soon-to-be fiancee and I are looking at homes. We are preapproved for a mortgage. About a year ago we found a new construction home that was not quite finished (although it's mostly punch-list type items remaining) but is in a neighborhood we liked. It's one where there are just now starting to be teardowns and new construction is going up, but I suspect there's probably at least another year or two before the action gets going. Lot prices, however, are already high.

The house is still available and the seller recently dropped the price quite a bit (13%). It would require a jumbo loan for most people, I'd imagine, and given the probable lack of comps in the area I suspect that's why it's still on the market. We've looked at the house twice in the last couple months and it appears nothing has been done to finish the house. In addition, we've noted that the taxes have not been paid on the house yet and it's now end of February.

Any thoughts? This is not a commercial builder but, I believe, somebody who is maybe trying to get into the business. If you were a buyer, what would you determine from these facts? Would you make him a lowball offer? If so, by what percentage drop would be reasonable?

Thanks to all for your advice.

[mtgmike]

If you are right, and the seller is facing bankruptcy, a lowball may not help him at all. No one can tell you how much to offer without some more info. If it were me, Id have a sharp realtor contact them and go from there. Get all the info you can without giving any, and make an offer from there. Dont be afraid of making contact. Usually, you can get a ton of info, even if the sellers realtor doesnt intend to give it. Also, the listing agent on it isnt the seller's lawyer, they want to see it close too.

[City Love]

Feel free to message me the address and I would be glad to give you a little more insight.

But from what you tell me, I gather a few points.

1. Do you really want to purchase a home from a builder who might not be around for warranty service? Not just that, but you must look into the build quality even further when purchasing a home like this? It could be very well built for all I know. It's impossible to say at this point. But the potential recent financial troubles could mean bad build quality. Keep that mind. They might have taken some shortcuts.

2. Like mentioned above, low-balling might not get the ball rolling. Sometimes homes are priced to move at their current new list price. Again, it's hard to say without more info. When was the price drop? You need to find out what the market value is and then offer based on that.

3. The fact that the taxes haven't been paid, doesn't tell me a whole lot. But the fact that the home isn't totally finished yet with small details taken care of, does say something. It means that the builder is likely in some type of financial trouble. Either they owe money to different trades and they won't come finish until they are paid, or they just ran out of money to hire the trades again to finish off.