how much do you offer on an already dirt cheap house (Raleigh: for sale, real estate)

[scorp200]

in a rapidly up and coming East Durham neighborhood? (those who would warn me away from the neighborhood...thank you very much and I understand your concerns but I will be just fine...)

The house is under $75K. For many reasons and in the listing it seems to be my dream house. I'll drive by it later.

I don't feel I'm financially ready to buy a house (now those who have opinions on this - I welcome them - I've never owned a home)

Because this house is somewhat of a gem I am concerned that if I offer below asking price it could easily get snapped up by someone else. But you don't want to be dumb and just pay the asking price? I also would have to break my lease and pay them 2 months to do so, and hadn't planned on looking until next year.

Thanks!

[saturnfan]

Get it inspected to see if there's a reason for the low price.

A buyer's agent may be able to guide you.

[ChipL]

Get a buyer's agent. They'll be able to tell you if it's a deal or not.

[autumngal]

They will also be able to read the Realtor comments which the public cannot see,

[MikeJaquish]

If it is a deal, offer a fair price.
$75,000 in East Durham may be dirt cheap, or it may be very expensive.

You need a good market analysis.
It isn't cheap just because some homes are $500,000 five miles away.

[procfreq]

Is paying the asking price dumb? We paid the asking price on our house (in Durham) exactly. Based on the CMA, it was actually a tad low per sqft *and* we really didn't want to miss out on the opportunity. Provided the price of your gem is in line with the market and the inspection doesn't yield any surprises, paying asking may not be such a bad idea, no?

[RaleighBoundGeek]

If the price is in line with the market, and there are no major defects, and you have the ability to afford that, then no - a full price offer is NOT stupid.

On the other hand - assuming that the seller appropriately priced the house, or assuming that there's nothing wrong with the house (by not running a full inspection prior to purchase/final offer), or assuming that buyers will only accept full price offers, are all dangerous.

Offering less than full price can sometimes be the quickest way to "lose" a house, but frankly - if the adding in all factors lead up to telling you that 75 is too much, then offering full price just because you "like it" is a bad move too. In a market like today, where certain properties will just sit on the market for long periods of time - it may be more important to someone to sell the house than to make their price - so a lower number might still be entertained.

As far as first home ownership - start with a house that isn't going to require a phenomenal amount of fixing up. The money pit experience is NOT the right way to start yourself off. In my book - better to find something less exciting with everything right than to find something "with potential". Few things gnaw at relationships faster than continuous construction zones for moths/years on end.

[greenc]

Hi Scorp200,

The best, and cheapest, way to find out if the house you like is a "deal" or not is to have a Realtor you trust examine the house and do a Comparative Market Analysis.

There are so many different factors that play into the sale of a house that what you are looking at may be a great value at $75,000 or it may be something that you can purchase for significantly less.

Here are some of the factors to consider when thinking about putting in an offer on a home:


price
location
condition
time on the market
terms of the sale
financing options
repairs - who pays for what
closing costs - is the seller willing to pay for any of your closing costs,
etc...

Remember, the Realtor listing the house is under a legal obligation to report all know facts about you to the Seller. This weakens your ability to negotiate. In most cases it is in your best interest to obtain a "Buyer's Agent" - a Realtor working on your behalf. What is fantastic about this arrangement is that he fees of your Buyer's Agent are free to you as the Seller pays your Realtor's fees.



Happy House Hunting,

Carrie Green

[askmisterbrown]

If the house truly is “dirt cheap,” i.e. underpriced, and it’s in a “rapidly up-and-coming neighborhood” then you had better make a full price offer quick, because others have been waiting for this deal. Especially if it’s your “dream home.”

I’ve got to tell a story here. I keep a close eye on real estate in my area. I tend to have my eye on a few houses. One late afternoon a couple years ago, a beauty showed up on the MLS at a great price. I called a realtor. He couldn’t talk, was with a client. I called another realtor, left a message. Called another, left a message. I jumped on my bike and hauled a** to this house. There was no sign in the yard. I knocked on the door. The tenant didn’t even know it was for sale. He let me inside to look around. Everything was original! After five minutes, with a quick look in the attic and basement, I thanked him and hauled a** back home. One realtor had left a message. I called him and we met at 8 the next morning. He told me to make a lowball offer. I said, “Full-price-cash-offer-close-in-two-weeks!” He said OK and we sent the offer. I called my bank and got some money in my account from a line of credit. The seller accepted the offer. That evening at 6 my realtor and I officially went to the house and met the seller’s realtor. She said, “I don’t know what it is about this house. After we accepted your offer, we turned down seven other offers!” At closing, she told me they had turned down 21 offers before they could get the house off the MLS!

Why was it such a great deal? The owner had inherited a bunch of houses from his father, and put some of them on the market to pay off some debt. He had never even set foot in this house! His realtor was very young, was from another part of town and didn’t know what was going on in this neighborhood.

I sold the house to my brother and he is living in a great house mortgage-free!

The moral of the story is: If you know what the market is and the house is a great deal and it’s your dream home, JUMP NOW. Others will jump and you have to jump faster than they.

Now, I have to add, that knowing it is a good deal has to be based on your knowledge of several things:
1. Construction and condition: Is the roof good? Can you see that there are no leaks? Can you see under the floors to see that there is no rot or termite damage? Is the house high enough off the ground that past and future damage are not likely? Are the floors and walls fairly level? Etc., etc.

2. Architecture: For an older house (which is what I expect you’re talking about in east Durham) you want something that has as much original architecture as possible, because it will look better and be of better materials. I’m not inclined to buy a 1920s house with crummy windows added in the 70s. They don’t look right and usually have problems. Asbestos shingle siding over the wood is good because it protects the original wood. Aluminum or vinyl is bad because it lets water in and allows the wood underneath to rot. Etc., etc.

3. Neighborhood: How is it compared to what it was five years ago? What will it do in ten years? Is it near cool stuff? Is it a rough neighborhood surrounded by better areas, or is it surrounded by rougher areas? Does it have much architectural integrity? In other words, are there nice houses to fix up around the house you’re looking at, or are they mostly too messed up, or were they crummy to begin with? Are there homeowners around who care about their property and neighborhood, or are the other houses all in the hands of slumlords? Etc., etc.

None of these issues are deal-breakers; they are all factors in what is a good deal.

Then there are the personal factors: Does the house and neighborhood appeal to you in particular? Would you enjoy living there? This is different for every person. Some want peace & quiet; others like more activity. Some want crime-free while others are up for a little adventure, and care more about charm and character. Some want perfect right now; others are willing to endure some rough years knowing the future is brighter.

I was lucky to have looked at the MLS just as this house was put on the market. I easily could have missed it. Now I have a realtor keeping a lookout for me. A friend of mine says that when it comes to these “up and coming” old neighborhoods, none of the houses on the market are good deals. Because if they were good deals, they would have been sold already. A bit of an exaggeration, but it’s true that good deals don’t last.

This is another reason to move to a city and get to know it before you buy. You’ll know what a good deal is and you’ll know where you will be happy. After I moved to Raleigh in 1986, I rented for three years, keeping an eye out, waiting for that great deal on a wonderful house. I found it in 1989 and have been so happy here for 18 years! Now I try to help other people find good deals, too!

[saturnfan]

You sound like a very wise real estate investor.

Nothing like many of the stupid flippers that screwed a lot of markets up the bazoo.