In today's market, how to negotiate when buying a house? (mortgage, appraiser)

[clamboy]

One thing I will add is that having just gone throgh the BS of remodeling a home(like camping with a mortgage)....Its easier and cheaper to pay a bit more for a home thats done rather that one thats undone.

All the miney I thought i saved by shopping low (15-20k lower)wound up costig me more in the end (Despite a good amout of DIY elbow grease)

My next house will need Paint,Rugs and Toilet Seats.

Best
C

[NY62]

Originally Posted by 4StanleyCups

Kelli, I get what you're saying but let's say I'm a buyer looking to pay no more than 450K for a house. I see a house on MLS that's 500K. The house is very nice, in fact it's probably nicer than the rest of the houses in that neighborhood, but it's still 50K over my top end. I'm a responsible buyer and I KNOW that paying more than 450K for a house would be a mistake, a gamble I'm not willing to take. I'm going to assume that the sellers want to get close to 500K for that house, but no matter how nice the house is or how much it might appeal to me, I'm NOT going to be tempted to go above my self-imposed price limit. So to look at that house would be a waste of both my time and the seller's because I'd be looking with absolutely no intention of buying, given the listing price.

Now if the house were 460K or 475K I would look at it, because I'd assume the sellers left some wiggle room, especially if I knew there was an incentive for them to take my lower offer (all-cash, or total flexibility on closing date). But even those incentives, IMO, would not justify assuming a seller will take 50K less.

This is pretty much rite on I agree. It does not matter if you have gold plumbing if there is a house down the street with the same square footage that is 50 k cheaper and is priced correct that is the house that will sell. I have a question for some would you pay 50 grand over appraisal value? because if houses in the same area of equal size sell 50 grand cheaper than that is what the banks appraiser will come up with,so you mite think your house is worth more and the person buying it mite think that but when the appraiser says only 400 not 450 how many buyers are gonna pay 50 gs out of pocket to make up the difference because the bank will not give a mortgage for the 450.And considering most people struggle just to come up with 10 percent they will not have it even if they wanted to. and how many will overpay even if they could? if the bank says 50gs cheaper I no for sure I would not and I can bet most people would not. This exact thing happened to me 15 years ago and I would not do it I said drop the price the 10gs they would not I walked and they sold it 25 gs cheaper 2 months later.just something for buyers and sellers to think about,and this has nothing to do with any bubble bursting this will happen in any market, everyone thinks their home is worth more then it is.It is like people who have baseball cards and they think they are worth a thousand dollars well they are not worth nothing unless someone buys them.

[rgarcia]

in this market, I would shop enoupgh to get a feel for the market, then lowball the offer by 10% of what I'm really ready to pay. With so many houses on the market, I think you can find a bite. Newer constructions might be trickier, because the costs might leave the builder or the short term owner unable to sell at that price, due to market reductions. In this market I think everyone would counter offer, there aren't a line full of people ready to bid on any house as there was a couple of years ago.

[NY62]

everyone buying and selling be carefull the mortgage industry is in deep trouble do not count your chickens before they hatch.they are not giveing mortgages to everyone anymore.

[TomMoser]

Originally Posted by NY62

everyone buying and selling be carefull the mortgage industry is in deep trouble do not count your chickens before they hatch.they are not giveing mortgages to everyone anymore.

Another note on mortgages. Even if you (or if you are a seller, the potential buyer) were previously pre-approved be very cautious. The banks are dropping programs that they previously offered, so you may find out that the particular program that you were pre-approved for no longer exists.

[NY62]

Originally Posted by TomMoser

Another note on mortgages. Even if you (or if you are a seller, the potential buyer) were previously pre-approved be very cautious. The banks are dropping programs that they previously offered, so you may find out that the particular program that you were pre-approved for no longer exists.

dead on!! I do mortgages and they are changeing and dropping programs daily. almost hourly.

[APNY]

Does this apply to people with extremely good credit, very low risk borrowers, as well?

[NY62]

Originally Posted by APNY

Does this apply to people with extremely good credit, very low risk borrowers, as well?

If you have extremely good credit you will not have a problem. If your income and debt ratios are in line and have a down payment then you can pretty much get the best there is. as long as your credit is great you can just about get anything.

[KELLI2L]

Originally Posted by 4StanleyCups

Kelli, I get what you're saying but let's say I'm a buyer looking to pay no more than 450K for a house. I see a house on MLS that's 500K. The house is very nice, in fact it's probably nicer than the rest of the houses in that neighborhood, but it's still 50K over my top end. I'm a responsible buyer and I KNOW that paying more than 450K for a house would be a mistake, a gamble I'm not willing to take. I'm going to assume that the sellers want to get close to 500K for that house, but no matter how nice the house is or how much it might appeal to me, I'm NOT going to be tempted to go above my self-imposed price limit. So to look at that house would be a waste of both my time and the seller's because I'd be looking with absolutely no intention of buying, given the listing price.

Now if the house were 460K or 475K I would look at it, because I'd assume the sellers left some wiggle room, especially if I knew there was an incentive for them to take my lower offer (all-cash, or total flexibility on closing date). But even those incentives, IMO, would not justify assuming a seller will take 50K less.

To: 4StanleyCups; APNY - made some good comments about this pricing thing. The higher the asking price the more ability to offer less. So that when your looking for the 450 ceiling, go see the 500k properties and offer 50k less (specially in todays market). Make sure when the offer is made an attempt on your part is made to let the owner know you mean no offense, since some sellers are fine with it but others take it personal and may not be up on the art of pricing negotiation. You could get a really nice buy this way. Don't box yourself into lower quality. Think big!

[KELLI2L]

Originally Posted by rgarcia

in this market, I would shop enoupgh to get a feel for the market, then lowball the offer by 10% of what I'm really ready to pay. With so many houses on the market, I think you can find a bite. Newer constructions might be trickier, because the costs might leave the builder or the short term owner unable to sell at that price, due to market reductions. In this market I think everyone would counter offer, there aren't a line full of people ready to bid on any house as there was a couple of years ago.

The problem with the attitude of lowballing at 10% right off the bat, means if the property is 450k - you would lowball 45k. Sellers know that, and that is why they want to compensate by upping their 450k property to 500k.
Then, the property you want is now out of your range for looking - which is what I was suggesting in my original posting. Oh, the games people play.