How to determine offer?

[klinked]

I have prequalified and am waiting on the pre-approval paperwork. I will not believe this is going to unless and until I have that piece of paper.

In the mean time I am going to go look at this house again this Sunday. I REALLY like it except for a couple small things that I am willing to work with. I am bringing my best friend and she will tell me if this is a good idea or a mistake.

The house has been on the market since last Nov so I think I have some bargaining room. All the books I've read say make an initial offer at 10% less than asking price. Is that a good starting point?

How do you start to decide your initial offer?

[Gib]

Forget asking price. Get an appraisal done and work from there.

[Hedwig]

The longer it's been on the market, the lower the owner will often go. Especially if it's empty.

Are you working wth an agent? They should help you. Consider getting a buyer's agent. That is an agent that works for you. You pay them a flat fee, so there is no incentive to get you to offer more than you need to.

[klinked]

I broke down and got an agent. If i am going to do this I am not going to do it half assed

[roybean]

Quote:

Originally Posted by klinked I broke down and got an agent. If i am going to do this I am not going to do it half assed

Do you get a good feeling about your agent? Quixote knows people all over the place.

[Qtip]

Quote:

Originally Posted by klinked I broke down and got an agent. If i am going to do this I am not going to do it half assed

If you feel overwhelmed, an agent is the way to go. I am going trough something similar right now and will get an agent, altough most the purchases I will not need the agent; it is always goot to have on your courner.

[Hedwig]

Even though I have held a real estate license previously (or maybe BECAUSE I held a license), I would never buy a house without an agent. There are too many little things that can come back to bite you.

I'm the same way with rentals. I've owned rental property that I managed, and I've owned rental property that I've paid a professional to manage. I'll take the professional. To me, it's worth it to not be called at 3 AM because the toilet doesn't work or some such nonsense. I can still have decisions be made by me so that I can qualify for the tax deductions, but I don't have the hassle.

Some things are better left to the pros.

[FixinThings]

One caveat... Find out who the agent is really representing, In some states, the real estate agent is always representing the seller, no matter if he's one that you have sought out. Check to see if your agent is a true "buyers agent". If he is not, ask him what his responsibilities to the seller are.

Until you are clear that the agent is a "buyers agent", give him no information as to what you are might be willing to pay. If he is a classic RE agent representing the seller, he is obligated to pass that info along to the seller...much to your disadvantage.

[klinked]

I found myself a buyers agent. I feel better already. Then my mom called and told me about a house she drove by. So, I went to go look at it and I like it even better.

I think I am going to slow down and do much more looking before I jump. I still have more hoops to jump through for preapproval.

I told the agent what I want and she seemed to get it.

[roybean]

I agree with FixinThings; I saw a deal go down in which the agent didn't look out for the buyer at all such as appliances, what things would come with the property (like tools, lawnmower, ), things that should have been fixed prior to the sell, etc. This agent was strictly about his commission and the seller wasn't a dog, so he threw some things in that the buyer didn't even ask about because he wanted to sell quickly.

[centex]

In addition to the appraisal issue, you might also be able to do some other legwork on the property to figure out what the original mortgage was written for. Some counties make those documents easy to locate along with deeds and whatnot. When you know what they absolutely need to get out of the property, it potentially makes it easier to come up with a number that won't be rejected outright...

[Gib]

Quote:

Originally Posted by klinked I think I am going to slow down and do much more looking before I jump. I still have more hoops to jump through for preapproval.

Good idea. It is amazing how many "deals of a lifetime" come up when you are looking for them. I own 3 properties at present. I paid about 68% of fair market value for my house, 50% of FMV for an improved acre lot, and about 90% for this place. I think I overpaid for this place, but it was in my price range and I needed someplace to live (I'm seperated).

[hannah]

Haven't done a mortgage since 1987 so know little in the ways of modern house-hunting and loans for such, but good luck with your search and mortgage loan. One word of advice...those nice properties on the river front look really good and are pleasant and peaceful and wonderful places in the summertime as I well know... BUT - can and probably will flood at some point. Always check to see if the home you are looking at is in a flood zone first before tendering an offer. Buying in any flood zone whether it be a 100 year or a 500 year is a risk you must be willing to take and can cost more $$ in the short (having to have mandatory flood ins.) and long run (more damage than your insurance will cover).

[ilovemydogs]

Quote:

Originally Posted by klinked I broke down and got an agent. If i am going to do this I am not going to do it half assed

How did you get her/him? Many of these act as double agents and it is not a good thing. If this is just a buyers agent, fine. : )
Houses are going down in price here, and I believe come winter they will be even cheaper and more homes to look at.
For your first home, try to buy the smallest house in the best neighborhood, and make sure it has good bones.
No sills rotted, cracks in the foundation or chimney,no asbestos siding and heater not more than 5 years old,unless you have the money soon for a new heating system which in the long run wil cost you less to use.
You got some good tips, and a few more I would add.
Do a search on the home you want to buy to see how much it is assessed for, any permits, and how long it has been on the market and what date and price was it last sold for.
Another thing is to check the home and area out in the daytime and nightime, as your next door neighbor might have football size lights going right onto your property.
Buying a home can be stressful, but it is the best investment you will ever make if you choose wisely.
Good Luck!
ILMD

[Hedwig]

If it's a real buyer's agent, the buyer pays the agent a commission. It's usually a flat fee, not based on the value of the house. The agent gets the commission no matter who has the house listed or how much it costs. The concept of buyer's agent was for exactly the reasons some have stated. A real estate agent paid from commissions is looking for maximum commission. That means the most expensive property possible, and listed (in this order) by the same agent, by the company the agent is associated with, and finally, a house listed by another company.