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I'm trying to figure out the right price to put on an offer - it's a longshot offer, really, since the asking price on the house is actually about $40k over what I can afford, and I'm not willing to stretch my budget. The market average sales over the past year in that vicinity (all within a few blocks) is high-$130's to low-$140's per square foot for similar homes, and the asking price is $159/sqft. It is a very nice home - a very old (1907) two-story plus finished attic and a two-car garage. It appears to have been extremely well maintained, and recently updated or remodeled based on the very good condition inside - no major 'extras' or high-end materials used, but it's all in good condition. So I can see it pulling a premium over the neighborhood average. However, it's in a historic neighborhood, so most of the houses are nearly as old, and most of them are in really good condition as well.
With that in mind, I'm thinking maybe the seller plans or expects to negotiate a little.
With all that said, Given that the asking is $159/sqft, is $140 as a starting bid, with an expectation to come up a bit too low?
I know that it's impossible to predict exactly 'what the seller is thinking', but is that a normal negotiating range?
For reference, that's an asking of $469 vs. an offer of $413.
As I said, I know it's a long shot for me since I can't afford asking, but I can afford a *little* bit above the offer, and I'm thinking I should save that bit to leave me the capacity to negotiate..
Anyway, the point being, would most sellers consider that offer an insult?
Are you working with a buyer's agent? The agent should be able to understand your market and give you guidance. JMO, but I think 10% below asking price is reasonable opening offer.
Yeah, I am using an agent - and so far he's been an excellent agent, too - he said basically the same thing: it's not a bad offer to bring to the table, but that I shouldn't expect them to take it, just to begin negotiations (which is exactly what I'm trying to do). I just want to be very careful not to insult the sellers... I'm guessing when you're trying to bring sellers down a little bit, their mentality has a LOT to do with their willingness So I thought I'd open up the discussion and see what others thought as well.
First thing I would do is hit the public records and see how much they owe on the house. A mortgage balance has a lot to do with how low a seller can go. Check you county clerk's website. This info is free.
Really? I didn't realize that was public - googling for my local office now - thanks!
*edit* heh - the site has a big banner ad stating "We plan to have our Real Estate documents from January 1st, 2000 to the present online by November 1st, 2007."
Still, it's public record, so I can probably just call 'em.
First thing I would do is hit the public records and see how much they owe on the house. A mortgage balance has a lot to do with how low a seller can go. Check you county clerk's website. This info is free.
At least in my county you can't see how much someone owes, only the full loan amount is recorded in the county's registrar of deeds.
I bet it's the same here (it's after 5 so I'll call tomorrow), but on the other hand if you assume it's a 30yr loan, you can make a pretty safe guess at what remains.
hm... I bet they don't keep track of home equity lec's, though, do they?
I'd say you've got little chance of your offer being accepted if the house is properly priced for the market. If, however, the market shows that the "right" price for the house is more in the $420k range, then you've got an overly optimistic seller, and you may get it for what you're offering. It's impossible to say without knowing what's going on in your local market.
I bet it's the same here (it's after 5 so I'll call tomorrow), but on the other hand if you assume it's a 30yr loan, you can make a pretty safe guess at what remains.
hm... I bet they don't keep track of home equity lec's, though, do they?
Not that I am aware of, only mortgages, tax liens, mechanic's liens, etc. You will most likely have to go down there to see the records.
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So I thought I'd open up the discussion and see what others thought as well.
