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We found a house that is listed at 295, it's in pretty good shape except for needing new roof, new windows and new outside doors plus a couple of other little things. The comps in the area are selling for 250.
We want to offer cash with a quick settlement date. We are planning on doing an inspection, but not asking for repairs. We want to reflect that in the offer price and do the repairs ourself. I keep seeing that the market is going to continue to go down. What would you offer?
We found a house that is listed at 295, it's in pretty good shape except for needing new roof, new windows and new outside doors plus a couple of other little things. The comps in the area are selling for 250.
We want to offer cash with a quick settlement date. We are planning on doing an inspection, but not asking for repairs. We want to reflect that in the offer price and do the repairs ourself. I keep seeing that the market is going to continue to go down. What would you offer?
I would look at the local comps to establish a fair value of what the home would be worth if there were no repairs needed. Once you have established this, I would consult at least two general contractors for repair estimates and base my offer on these numbers. This will allow you to negotiate with some comfort, and position you with a method of establishing why you are willing to purchase at the reduced price.
The inspection is a good idea, as this will allow you to look at possible hidden repairs that you may not have found yourself, but a professional has, and will lend further credibility to your offer price.
Are the comps really fair comps? Why does this home command a higher price? Larger? Better condition? Location? (ie is it a corner lot or col-du-sac? Close to community pool or elementry school?)
The people actually over improved for the area. The spent a lot on remodling the kitchen and are trying to recoupe all the money they spent.
Well a nice kitchen should be worth something. How much $ worth of improving did they do? Figure offer them what the comps (the real comps) are selling for and then add X% of the value of the kitchen improvements.
they put in a high tech kitchen probably around 30k
do you then subtract all the money that it will cost to repair roof, new window probably around 20 of them, and doors?
The window look original, house built in 70s
Just commenting on the cash thing...to me, I could care less if someone is paying cash or getting a mortgage...I get my money/equity either way. So, when you make that offer just know that they may not care....
I honestly wouldn't care if it was cash or financed either. My end is the same either way.
Ok I'd say if it's a $30k cool kitchen then offer them half that for it. Every house comes with a kitchen that's worth $10-15k so if they ripped out their old kitchen and then spent $30k on it then it's worth the difference.
As for the repairs I'd say look at the state of disrepair of the comps. Are the homes that sold for $250k about the same as what you're looking at? Needed roofs fixed and stuff like that. I mean if another house down the street sold for $250k and the windows were the same age and condition then fine. But if they were worse off then you have to consider that.
I know you say that the cash thing doesn't make a difference, but it does. The seller doesn't have to worry that I won't be approved for a mortgage and the sale fall through. Guidelines now are much stricter and just because you have a preapproval letter doesn't mean you will actually qualify. Also, I can close within a week. I don't have to wait for the mortage process which can mean the seller getting out of their house a couple months sooner. Just my opinion.
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