Negotiating when buying a house (Houston, Katy: short sales, real estate, foreclosures)

[Moving-to-TX]

Sorry to bother you guys again.

I don't know what's the housing market like in Houston, specifically in Katy (probably Cinco Ranch), i know that, usually, the real estate agent has an idea of how much we should, shouldn't offer, but we've had bad experience in the past so i thought i would do my own research just in case.

If a house is being advertised for say 220k, how much should i be looking at offering then finally closing at?


Thanks again,

[Oildog]

Depends how motivated you and the seller are. I once offered 93% of asking price for a place in Montrose, and the sellers didn't return my offer. After 60 days they asked my realtor if I was still interested.

[cheryjohns]

Never take anyone's word on what you should offer/pay. The Realtor should show you the comparable solds for the subdivision. Although you could go back 6 months to get a clearer picture, realize that an appraiser will only go back 3 months. This info comes right out of the MLS system.

The homes will average out in price by square foot - but other variables apply. The smaller homes in a subdivision will go for more psf than the largest homes in the same subdivision. Upgrades matter a little but not as much as you think (unless you are comparing homes built 40 plus years ago where some have been totally renovated vs. nothing done). If you want a pool, shop for a house that already has one - never install one, hoping to get your money back. Appraisers will only give the house a few thousand for one, not nearly what was paid for it. Is the house on a busy street? Then only compare to other houses on a busy street. Etc., etc.

Foreclosures and short sales - not much damage to the regular homes' resale values, unless they represent a high number of sales in the subdivision - not a problem in Cinco.

Here are some sources that are a waste of time:
Tax appraisal district - the whole name of the game is to keep your taxes as low as possible, and we are a non-disclosure state - so values listed aren't necessarily tied to real market value.
Zillow - I have no clue where they obtain info but it's wrong a lot of the time

The house you mentioned listed for $220K (I know it was just an example)? Is it vacant? Is the owner paying for two mortgages? How long on the market? Are you the only buyer making an offer? Have they dropped in price? How in line is it to the Sold comparables (not the others still on the market)? Lots of variables there, too.

[ethanw]

Is all business, so don't by shy being a "shark"... Make the realtor actually "work" and not just make another sale. It worked for me every time and I always got my way on what I wanted to pay. Less money I paid, is more money for my family.

[City Love]

It's really hard to say based on just the current selling price. Like mentioned, you have to base it on several factors. The best indicator is how much have other comparable homes sold for. You should base your info off of that. It's quite possible, but usually not, that the current price is under priced and will sell fast. Once you know what the past sales are, you can better negotiate a proper offer and you will be able to assure yourself that you aren't over paying once you get to the final offer. You don't want to miss an opportunity to purchase a home you really like, by basing your offer solely on what the sales price is.

It also help to know the current trend for the home you are interested in. Are they in a hurry to sell? Have they dropped the price recently? How long ago did they buy the home?

Ask your agent for a CMA report on the past few months of sales. In Cinco, you can look back a few months to get a good indicator. In smaller subdivisions, you might have to go back 6 months. Whatever you do, make sure you get your own agent and not negotiate directly with the listing agent.

Good luck!

[Seoid]

It definitely depends on how motivated the seller is.

We really liked our house but were totally willing to call their bluff/walk away and had that power because we could easily just sign another lease. We let them know that when we made our offers/counter offers.

In fact, we walked away twice, only to have them come back a few days later with another counter offer. And well, we have our house and paid very close to what we originally offered.

[Texascrude]

It also depends on how much you want the house. If you're indifferent between four or five houses, no harm in sending out a few low offers. If it's the only house that you really liked, you better not **** them off.

[cheryjohns]

Originally Posted by Texascrude

It also depends on how much you want the house. If you're indifferent between four or five houses, no harm in sending out a few low offers. If it's the only house that you really liked, you better not **** them off.

This part is very true, also. You only get one chance to insult the seller to the point of stopping negotiation. This doesn't matter if you are so-so on the house - or if the owner is a bank (can't insult those SOBs - excuse my French, Mom). Also doesn't count if the seller is seriously over-priced - you will insult, but it is a reality that they are over-priced.

If it is a foreclosure - and there is not a run on an under-priced house (resulting in multiple offers) - you drip the offers.

[guardians]

Always use a realtor when buying a home in Houston. Just ask friends/family for recommendations. A CMA from the realtor will give you an idea of the price for the area. The realtor on "poperty virgin" always say 10% less than asking is a good place to start. Like other posts, depending on the seller's need, they can always counter offer.