Home buying - where to start with my offer?

[lowthreeohz]

choooooooooo$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ choooo$$$$$$$$

[UserX]

I'm not sure about this, because I've never been in a offer situation like this, but doesn't the house have to appraise for the purchase price? If you offer $200k, but the appraiser says it's only worth $190, the bank won't approve the loan. I think that would be a huge bargaining help, and the seller would likely lower the price. They would have to with anyone, unless the person is paying cash.

[barronj]

Relocation companies have paid a broker (a real estate agent) to do a BPO, broker price opinion, and the broker had to come up with legit comps to help them set the price. The broker woulndn't get another phone call for more work from that company if they said "you can get 198", but the market will only bear 188 in reality.
Another angle to your point about no emotion involve evokes recent REO (foreclosure) memories/nightmares where the bank could give 2 shits about you (buyer) or the house that the have foreclosed on, and they will sell it in spite of their "efforts".
The relocation company would like to sell the house, but they would like to get their number as well.
My rule of thumb is that if a house is adequately priced, you're doing well to get it at a 3% discount.

[03mustangdude]

Lost a house going 30k over with foundation issues in may. I stopped looking after that. Waiting for this to cool down. Raise the rates!

[Pokulski-Blatz]

I'm not sure about this, because I've never been in a offer situation like this, but doesn't the house have to appraise for the purchase price? If you offer $200k, but the appraiser says it's only worth $190, the bank won't approve the loan. I think that would be a huge bargaining help, and the seller would likely lower the price. They would have to with anyone, unless the person is paying cash.

Only on FHA loans I think.

[barronj]

I'm not sure about this, because I've never been in a offer situation like this, but doesn't the house have to appraise for the purchase price? If you offer $200k, but the appraiser says it's only worth $190, the bank won't approve the loan. I think that would be a huge bargaining help, and the seller would likely lower the price. They would have to with anyone, unless the person is paying cash.

You, as a buyer, have to come up with the difference in purchase price & appraisal price. If you're concerned about that, you start putting in clauses about what you will pay if it won't appraise, where you can get out without penalty, and/or where they have to come down to if appraisal #'s come up short.

The option period is for inspections, but the appraisal does not get ordered until you're done with the option period (option= you can walk b/c the wind shifted, or for any other reason at all, and get your earnest money back, only forfeiting the option fee and any expenses you incurred (ie inspection) during the option period). The third party financing addendum usually covers you for 3 weeks, but if it won't appraise and the deal can still make if you pony up, you begin to sweat that earnest money, because appraisal is not facet of the TPFA.

*CAVEAT:

Only on FHA loans I think.

Right. An appraisal on an FHA home will stick for 6 months (the appraisal amount gets "assigned" to the house, cannot get another appraisal to come in higher). If the home is overvalued, the appraisal will dog that home the entire time it's on the market. You won't be able to pay more than the appraisal for an FHA home, is my understanding.

[CJ]

I bought my house about a month ago, I was the first to see it, bid was asking price, got it and then after the inspection I got 10k off. See plenty of houses so you know the one when you see it.

[Ruffdaddy]

If it's been on the market awhile, you have some flexibility.

When I sold my house in Allen, I had so many offers that I wouldn't even waste my time countering back to the low ballers. If the area is a hot market, you need to put your best offer down first.

[FATHERFORD]

Down here in Houston, the nicer neighbor hoods the houses are going 20-30k over asking price. Normally sold in 2-3 days.

[lincolnboy]

As long as the inspection doesnt catch anything wrong. my neighbor had an engineer came out to check the foundation.. we had things the previous owners hide from the eye.....i hate when you see fresh paint, dont know if they are covering thing up.

[Ratt]

It depends completely on the area. Homes in the price range you are looking at are the most in demand and there's a shortage on inventory in that price range. I know in the Frisco/Plano area a couple months ago the average for something to be on the market was something like 7-10 days, and most were ending in bidding wars going close to (or in some cases over) $15k over asking price. We offered on 3 houses at 5% under asking before we finally got someone to not just laugh in our face and counter. We offered fair market value on most of the homes, but it didn't matter because owners saw the inventory shortage and wouldn't take less than their artificially inflated price. It is a PITA to buy a house in the $180k-$250k range right now. I think we ended up paying about $77/sqft in Frisco.

If I were you, I would get comps for the area from the last 6 months, and if it's under-priced compared to the area, jump on it at asking price with seller paying closing if you like the house enough. Prepare for them to scoff at a seller paying closing costs in this market, though.

[CJ]

Only on FHA loans I think.

Mine was conventional and that happened to me. They won't advance over the value.

[SVT Lurch]

Mine was conventional and that happened to me. They won't advance over the value.

Correct.

You borrow based on the lower of sales price or appraised value, regardless of loan type. It is not your responsibility as a buyer to pay the difference. The TREC contract (financing addendum) allows for renegotiation in this situation (not sure about Oregon, but would assume it's similar). Could you end up paying it all? Yes, but typically you meet in the middle. You can absolutely pay more than the apprasied value, that's the only way to increase the value of a neighborhood (along with cash buyers).


Kyle, you need to ask your Realtor (who knows the market up there). Entirely too many variables for us to be able to give good advice.

[lowthreeohz]

Thanks dude. We offered 180k this morning.. When the counter comes back ill have a better feel of what they are expecting to get out of it.

[lowthreeohz]

And fwiw this is Virginia not Oregon. Fuck those hippies!