I am looking at a house priced at 159,900. Given market what should initial offer be?
Topic: Homework market
July 21, 2019 / By Bryanne Question:
Was thinking 130,000 plus owner pays closing costs. Given the market is this fair? Here are some details:
-built in 1940, no fridge or alarm, remodeled except AC/Heat, water, hardwoods throughout, 2 beds/1 bath, backyard, porch, been on market for about 10-12 months, connected to sewer/public water system, 1100 - 1200 sq. ft., in pine lake, ga 30072, taxes high, fenced yard, under 1/3 acre. link to house is http://www.harrynorman.com/Listing/ListingDetail.aspx?Search=d5461d67-1bf2-4b2c-b805-13242e116f51&Listing=27908085&IRPAgentID=9462707&Image=1&First=1&Last=10&pagesize=10&SearchType=geographic&ListingDistrictTypeID=&FirstLetter=&Sort=6&Cookies=&UseColorBar=false
Best Answers: I am looking at a house priced at 159,900. Given market what should initial offer be?
Alleen | 6 days ago
I just wrote an offer on a property listed at $125,000 the buyer's offer was $85,000. The seller was so insulted it was rejected, and now the seller will not sell for anything less than asking.
Chances are the home's price already reflects the current market. You should do your homework and see what homes are selling for, then come up with an offer.
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Originally Answered: Why is our Realtor against us putting an Offer On A House, with a Contingency Agreement (to sell our house)?
First of all, you need to clarify your relationship with "your" realtor: Did you hire this realtor (ie a Buyers agent) or is he/she the listing agent for the home you are looking to buy? If it's the latter, the agent is paid by the seller of that home, and has a fiduciary responsibility to that seller - not you. This is important. It doesn't mean they will only give you bad advice, it just means that at the end of the day they represent the seller of the other home, not you, and will give advice that is generally more favorable to the seller.
But for the time being, let's not assume the worst. Your realtor's suggestion may be based on the conditions in your market - if it's a strong market, the home you are considering purchasing may receive multiple offers. The seller will evaluate the contracts, and choose the "strongest" offer - typically the one with the best combination of price and conditions (ie contingencies).
A home sale contingency is one of the worst contingencies a seller can accept, because they have little control over it. Depending on how it is written, the seller is basically agreeing to take their home off the market for a significant period of time on the chance that your home will sell - a dicey proposition from the seller's perspective. Unless they are desperate for an offer, the chances they will accept a home sale contingency is small.
That said, you're right: What the realtor is suggesting is risky. If you make an offer on the other home without a contigency (to sell your home) you are obligated to purchase the other home regardless of whether your home sells. (I suppose if you don't sell your home you could default on the purchase contract to buy the other home, but that's an ugly scenario that could open you up to litigation).
One option is to make an offer on the other home contingent on the sale of your home, WITH A "KICK-OUT" CLAUSE.
Here's how it works: You design the home sale contingency such that you have a ratified contract for the purchase of the other home. In the home sale contingency you a set period of time (say, 30 or 45 days) to obtain a bona-fide contract for sale for the purchase of your home. If you do not obtain a ratified contract for the sale of your home by the end of that time period, you have the option of a) removing the contingency (by showing your ability to proceed to closing/settlement on the other home), or b) terminating the contract (without penalty - make sure you specify that the entire deposit is returned to you). The contingency also allows the seller to continue marketing their home, and provides a "kickout" clause: If he/she receives bona-fide offer to purchase their home, you then have a set period of time (usually 48-72 hours) to "remove" the home sale contingency. This accomplishes two things: The home you want is under contract to you, and you can go about marketing your home. HOWEVER, during that period the seller of the other home can continue marketing their home. It's sort of a win-win. If, at any time during that period the seller of the other home receives a purchase offer, that activates the "kickout" clause: You then have 48 (or 72, whatever the contingency says) hours to "remove" the home sale contingency by providing adequate proof of your ability - ie financial - to preceed to closing on the other home.
There's plenty of boilerplate kickout clause language out there - the realto should be very familiar with it and should be able to provide some. I hope this helps you. Good luck!
$130,000 would be my final offer ...condition, that the seller pay up to 8.5% of the price towards closing costs and down pymt assistance (AmeriDream) equals $11,050.
The seller would net : $118,950
No matter what this house has very little square footage and is only a 2 bedroom. The taxes are high and the lot isn't big at all. To find a buyer who will buy a 2 bedroom at this 159k is like finding a needle in a haystack. I would check the City's website and figure out how much equity they have to play with. I just bought a full brick pool home 3/2 black iron fenced yard (fully) In-Ground Pool Home on 1 acre. Central Vac and fully updated for 174,600. The seller paid all my closing and down pymt.(AmeriDream).up to 8.5% of the sale price. I get my good faith binder back at closing plus negotiated a personal refund from the broker for writing certain fee's up wrong (overcharging seller paid costs)
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there is no way that anyone could accurately answer this question without knowing the market it is being sold in.
in my hometown, some of the older neighborhoods close in to downtown were built in the 50's, 800 sq. ft. and listed at $350,000!!! and they ALL were listed around that amount, which means they are probably selling in that range.
if i hired a real estate agent to sell my house, and he did a comparative market analysis to find the best list price for my home, and he came up with $159,900, your lowball offer would be laughed at, torn up and burnt.
im not saying you should offer full price, there is a cushion typically built in, and especially since it has been on the market so long they are probably willing to accept a lower offer, but they do not want to be insulted.
start your offer a little below the price you are most comfortable paying, like maybe $150k. At least this is still in the same general range as the list price.
hope this helps. a real estate agent or your own research on the local MLS will give you the best idea of this home's market value.
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My suggestion would be to have your real estate agent run three CMA's (comparable market analysis) for you. What you do is have them run the first CMA based on all homes in the subdivision (if it is in one), or in the immediate area, that are currently active, under contract, and have sold in this area in the last 6 months. These homes should have at least the same number of bedrooms and bathrooms as the subject property. The 2nd CMA is based upon EXACTLY the same number of bedrooms and bathrooms during the same time frame and same area. The 3rd CMA should be EXACTLY the same number of bedrooms and bathrooms and +/- 10% of the square footage of the subject property during the same time frame and same area.
If you want to get very precise you can take the foreclosures, short sales, and bank or corporate homes taken out of these comps, unless that is what you are attempting to buy.
ALL real estate is local and price is determined by the current market trends in that area. Asking advise from people in different states, or that found the needle in the haystack deal where the seller just drops their pants to get the deal done is not typical.
Your agent should be able to tell you what is the typical list price vs. sale price in your area.
No matter what, protect yourself. Most real estste transactions have too many zeros involved not to be fully informed.
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As long as you absolutely don't love this house and there is plenty of inventory in your market (which is probably the case given the market conditions nationwide) then I see no issue with your offer. If they don't like it they can sit on the house and you can move on to other houses. I think you will at least get a counter.
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Originally Answered: How much money is TOO low for an offer on a house?
Contrary to what has already been said, there is in fact a "rule of thumb" as to what can be offered. When I was in Real Estate we always told our clients to ask on the 1st bid only 95% of the asking price or you can go as low as 90%. This is assuming the house has been fairly appraised but in your case it sounds like it's something of a "fixer upper" or a "handymans special", in which case you can go lower. You are offering about 86% @ $190,000. Also, "location, location, location" still applies.