Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hi,
I am currently looking to buy a house. First time buyer, and of course I have found I have tons of questions.
So, my question here is ..the house that I am very interested in was a foreclosure that sold two months ago for short money. I looked up the last sale, and it was also a Non-arm's length transaction.
Sellers have put some work into it, pretty minimal stuff. Painting, flooring, some new sewer piping, a vanity for the bath, and an expansion tank for the furnace.
Maybe, at most, a few thousand dollars worth of work ? And have now put it on the market at over a hundred thousand dollar increase from what they paid.
Ok, I definitely get what the notion of flipping a house means, and they want to make money. The problem is, all comps in the area and on the street, including one with the same exact specs as this one, are worth about 30 grand less. I am worried about getting an appraiser in that is going to say the house is worth less than what my offer is.
That being said, I would like to make an offer 19 thousand below asking price. First, I'm afraid my realtor isn't going to like, or go with the idea. Second, I have a feeling they will not accept.
How do situations like this typically work ? What would be my best course of action ? I'd like to go to my realtor with a plan, and insist she follow. I feel like I'm at a disadvantage because I can only get so much information from the internet, and I don't have any real life experience with the whole process.
We saw a home in a prime location that was sold for $144K. We were in the process of shopping for a home and met several times with the person who was flipping the home. She initially said she expected to list at $260,000. I was suspicious because that was still quite a bit less than other homes in that zip code/location so looked at a lot of comps and we were prepared to pay around $280,000.
So, when the house was complete, she contacted us and others who had expressed interest in hope that she could avoid listing on the MLS and paying agent commission. We had planned to have a real estate attorney draft our purchase contract and approach her without an agent to have a better chance at getting the house. But, when she got back to us, her price was 300K. Which was much more than what she originally told us she was expecting to ask and more than what the comps supported. There were other homes of the same size in the 300K price range that sold but they were stone or brick and had park-like yards and other great features that this home did not.
When we found out pricing, we started looking at other homes in the 300k price point and found we could get much more for our money so we passed on even making an offer.
Ultimately the home listed on the MLS for $299,000 and did not sell. It is still on the market but now down to $288,000. We are still watching it to see what it eventually sells for.
The lady had us on the hook and, if she had came in close to the $280,000 we probably would not have looked elsewhere. But, we didn't feel like a lower offer would be accepted so chose to let that one go.
What is the real estate market like where you are? Is it a strong seller's market or are homes lingering for a while?
Who cares if your agent doesn't like it? He or she should submit it either way. We bought a remodeled foreclosure that was purchased for 100k and we bought it 2-3 months later for 205k. Our lender required documentation for all the work that was done and we closed. We sold it for 290k 4 years later
The house is in Massachusetts. The town is an old mill town, so it has it's issues. One of the typical "stay away from the downtown" when buying a house.
The market around here, we've been looking for a few months now, seems to be ...if it's low listing, it goes very quickly. We have seen other houses come down significantly in price a week at a time when they start out at the higher end.
The other issues is our lender, as mentioned above. We are going USDA for our loan, which means our appraiser will be extra diligent when doing his inspection, esp with it being a flip.
Our agent has already been discouraging when we even suggest making a lower offer than we believe a house is worth. Esp when we know the comps don't come close to touching the price of the house.
We do love this house, and would very much like to put an offer in ...we are just worried it won't appraise higher, or at the offered price and sellers won't be willing to compromise. Or that we pay a lot more than it's actually worth for some paint and flooring.
Have you talked with your agent about making an offer at asking price with an appraisal contingency? That basically says if the home does not appraise, you either renegotiate or have the option to walk away. If a strong sellers market, they might not accept that but, if they are not getting a lot of interest at the current price then it might work.
Either way, it will tell you if the seller is willing to drop price down if the home does not appraise because they likely would not accept an offer with appraisal contingency if they want to hold firm.
The last thing that this brings to mind is sometimes flippers underestimate the costs of flipping and they have to sell for a certain price to make their money back and will hold firm even if it takes a while to sell.
If you don't proceed with appraisal contingency as described above or make a lower offer as you have thought of, you might just watch and wait and be prepared to jump when the price gets right. Because honestly, unless you are ok with paying the difference between the appraised value and the asking price out of pocket and financing the appraised value, you can't compete with others who are willing to do so.
the house that I am very interested in was a foreclosure that sold two months ago for short money.
I looked up the last sale, and it was also a Non-arm's length transaction.
Sellers have put some work into it, pretty minimal stuff.
...I would like to make an offer 19 thousand below asking price.
Any advice would be appreciated.
1) $19K vs a $190K asking? or vs a $380K asking?
2) how does their asking price compare to other recent ordinary sales?
3) offer what YOU think the house is worth to YOU.
The house is in Massachusetts. The town is an old mill town, so it has it's issues. One of the typical "stay away from the downtown" when buying a house.
The market around here, we've been looking for a few months now, seems to be ...if it's low listing, it goes very quickly. We have seen other houses come down significantly in price a week at a time when they start out at the higher end.
The other issues is our lender, as mentioned above. We are going USDA for our loan, which means our appraiser will be extra diligent when doing his inspection, esp with it being a flip.
Our agent has already been discouraging when we even suggest making a lower offer than we believe a house is worth. Esp when we know the comps don't come close to touching the price of the house.
We do love this house, and would very much like to put an offer in ...we are just worried it won't appraise higher, or at the offered price and sellers won't be willing to compromise. Or that we pay a lot more than it's actually worth for some paint and flooring.
If it's a small town and they are experienced flippers, the re agent could know them and have worked with them. I would research the owner and re agent to see if there's any links.
Your agent should do what you tell them in terms of the offer amount. If not, time for a new agent. At minimum, they should be providing comps for why they think it deserves a higher offer.
Overall, doesn't hurt to make the offer that you believe is fair, and you can always come up.
So why are you "very interested" in this house but not the one with the same specs for $30k less?
Hi,
I am currently looking to buy a house. First time buyer, and of course I have found I have tons of questions.
So, my question here is ..the house that I am very interested in was a foreclosure that sold two months ago for short money. I looked up the last sale, and it was also a Non-arm's length transaction.
Sellers have put some work into it, pretty minimal stuff. Painting, flooring, some new sewer piping, a vanity for the bath, and an expansion tank for the furnace.
Maybe, at most, a few thousand dollars worth of work ? And have now put it on the market at over a hundred thousand dollar increase from what they paid.
Ok, I definitely get what the notion of flipping a house means, and they want to make money. The problem is, all comps in the area and on the street, including one with the same exact specs as this one, are worth about 30 grand less. I am worried about getting an appraiser in that is going to say the house is worth less than what my offer is.
That being said, I would like to make an offer 19 thousand below asking price. First, I'm afraid my realtor isn't going to like, or go with the idea. Second, I have a feeling they will not accept.
How do situations like this typically work ? What would be my best course of action ? I'd like to go to my realtor with a plan, and insist she follow. I feel like I'm at a disadvantage because I can only get so much information from the internet, and I don't have any real life experience with the whole process.
Any advice would be appreciated. Thanks
If the home is overpriced let it go and find something better. If you don't and you decide to proceed and pay what they ask then you might just be throwing away $1000 on inspection and an appraisal that may come in low and kill the deal.
If there are other comps or better homes that are selling for less look to buy those first.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
