Well there is obviously a maximum price on the house already. The list price. This isn't California (right?) and this isn't 2005. Nobody is paying over list. So you know the maximum, and at the very least, you need to know in your own head if you're willing to pay that maximum list price or not, if it comes to that. Obviously, you don't want to offer list to start. A number of factors to consider, like recent comparable sales, # of days on market, if they've had a previous sale fall through, whether or not you want the seller to pay closing costs (which really is just a reduction in home price), etc. You have one ultimate goal...to buy the house as cheaply as possible, so the starting bid should be as low as possible while the sellers still take you seriously. Assuming the house is actually appropriately priced given its size, condition, neighborhood, comparables, the current economy, # of days on market, etc., I'd think offering anywhere from 10%-20% below list would be fair. A $250k list price, for example, offer $200k - $225k. The low end of that is a little low unless the house really is just overpriced to begin with, but you never know. You're realtor should be able to fine tune where to start at. But keep in mind, that unless a seller is enormously desperate, they WON'T take your first offer...so a $225k offer in this example won't get you the house at that price, but at some price likely in between $225k and $250k. Alternately, in most cases, sellers aren't so proud (especially in this market) that they refuse to take anything less than list - so again, keep in mind whether or not going in you would be willing to pay list if it came to that, though personally I wouldn't pay list for a house no matter how much I liked it. Other things to factor in would be some of the other terms of the contract that might make your offer stronger, despite a lower price. Can you close quickly? Do you have financing in place and will there be a decent amount of cash down? The other thing to keep in mind is that it is very very common to get further reductions from the price following the home inspection. But don't necessarily look at that as getting something for less. A seller isn't going to agree to price reductions because the inspector points out something cosmetic about the house that is obvious, but rather for actual things that need to be fixed, sometimes that cost a bunch of money...and even if they are elements that should be (but aren't required to be) fixed, whenever you sell the house in the future, you will get dinged for that issue off of your price. So not really a price reduction, though it has that effect... hope that helps.
Will the deed have your name? Technically yes, but the commission will be factored into the sales price. If you were savy enough, which is questionable, you should lowball your offer and let the listing agent know you don't have a realtor to split his commission. Good luck.
Thank you for that in-depth analysis. The house is listed for $125,000. I know of at least two homes that are on the same road that sold for much less just 2 weeks ago. One went for $114,900 and the other went for $109,500. The houses are very comparable in age, size, and amenities. Does that help us any? The house we are looking at just came on the market last week. We do have financing in place but we do not need a down payment due to the loan program we are using although we figured up we can put an additional $5,000 with our loan for whatever, if any, reason is needed. How do you determine if you can close quickly? I think Lady Di or another poster listed a website you can actually check to see what other houses in a particular area have sold for. Anybody have that?
I don't think so. The Realtor said we can put my name on the deed but it doesn't have to be. There is no listing agent actually. The real estate agent we are using saw that this house was put up for sale in the same area we were looking at other houses and contacted us to see if we would be interested. We went and toured the house with him after that. So.....
Well you're going to have the fact that the house just went on the market working against you. Still, if the 2 houses you noted are really solid comps, then on a per square footage basis (for land and improvement), the one you're looking at really shouldn't go for any more. You really need to know the land and house sizes of the one your looking at and the comparables and do the math. I tend to think that it doesn't hurt to low ball, regardless of situation. If the seller doesn't counter at all and just doesn't respond because he's "insulted" by your offer, then you can always just raise your price and put another one in. With the extremely limited detailed info, I'd say $105,000 is probably a fair starting point. It's 16% below list, and would imply that if you both met in the middle from there, the final price would be $115,000, basically just topping the more expensive of the two comps. Most larger cities at least have a decent MLS site. Houston's is www.har.com where you can see all houses for sale, recently sold, etc. Short of that, there are likely some websites out there that might have some useful information - zillow.com, trulia.com - but aren't always 100% accurate. Beyond that, though, as everyone else has pointed out, it is your realtor's job to get you all the detailed pricing info on comparables, etc.
Go to the web site for the county the house is in. You can see what the house as well as the hosues around it are valued at for tax purposes. Some county web sites also allow you to see what the last sale date and the last sale price was on the various properties. Note that some county web sites do not have this information. Generally, the web site would be named www.co.county_name.ar.us (I assume this is in arkansas).
Is this your agent's listing? If so you might want to consider getting your own realtor. It is hard for them to fairly represent both sides. I can't tell from this if this is what you are saying is going on or not.
I'm saying the owner of the home put a 'For Sale' sign in the front yard. Basically, it is a 'For Sale by Owner' property. Our Realtor saw this, inquired more information from the home about the owner, and then took us for a tour. There is no listing agent for the property because the owner has listed it.
If your name is not on the deed, then you are not buying a house. Your girlfriend is. You have no rights in this transaction. You'll be the guy paying rent.
Look at it however you want to. I know the legal aspects. I was the one who wanted it like this. Thanks for your help.
Thanks for the link. It appears the current owner bought the house for $118,000 last February, if I am reading that information correctly. Any idea how that translates into negotiations?
Hard to make an argument that the price should have increased since then. May be something specific to your town or the specific location that the seller could try and argue, but in general everything is worth less today than it was 12 months ago...
Interesting that they are looking to sell after less than 15 months. If it were me, I'd lowball them with the assumption that they want to sell for a specific reason.
That is somewhat correct, but it will give you a general idea of what prices (valuations) have been doing over the past X years. The tax value will give you a general idea of the market value. Also, some counties include the sales prices of homes in the general vicinity and that information is incredibly handy.
And, with the website you gave me I did some comparing of houses next to, across the street, and in the general neighborhood as they were all pretty similar styles and sizes. The lots were all basically the same size as well. What I find is that most of the homes on the same street were sold back in 2007 for prices between $104K-$110K. The initial asking price for every house I have looked at was $115K and that was sought by the developers of the subdivision from what I can tell and most people paid $110/111K for their property back in 2007. The only property I found that was sold this year was 2 homes down and it sold for $109,000. Homes in that general vicinity have sold for $105K-$115K but I have seen none going near the $125K asking price and like I said, there is nothing overly special that separates her house from the others. One thing I did notice is that while others paid around $110K for their properties in 2007, she paid $118K in 2008 and others on the road or in the neighborhood paid thousands less. She and the Realtor did mention that crown molding was added throughout the house but I don't know if that constitutes a $7K jump. Does this type of research and information help me at all or am I wasting my time? If you want, I can link some pics of the property just to see what you guys think.
