Profile picture for debbiebaer23

I am paying cash & closing costs for my home purchase. What % of asking price should I offer?

I wonder if there is a "rule of thumb" concerning cash sales and how much I should offer for a home that is $170,000.00.  I certainly appreciate all advice on this matter.
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October 15 2010 - Wichita
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Answers (5)

Best Answer
No there is no 'rule of thumb' because for all anyone here knows the home is overpriced by $50,000. So if we recommended you pay $150,000 for said unseen home, you would overpay by $30,000 and then you would be ticked.
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October 15 2010
The market analysis will tell you the comparable perceived value.  An appraisal will tell you the bank's perceived value.  A qualified, knowledgeable, skilled Realtor should be able to assess the situation and guide you in making an offer.  This is a high stake game where everything is about the seller's motivation and the buyer's emotions. 

It makes a BIG difference knowing the Seller's situation.  If it is an estate, short sale or foreclosure it is obviously not the same as a "retail" or "traditional" sale.  Contrary to other opinions, CASH does talk, LOUDLY, with a distress sale.  Banks (REO) especially do not want to have a house off the market for 30 days or more only to find out the buyer didn't qualify or the appraiser picked it apart and killed the deal.  I have seen numerous deals where they took the lower cash offer over a financed full price offer.

I can honestly say I have deals where we have gotten 55% or more off the list price (it was a foreclosure).  There are other deals where the buyer has had to pay more than list just to out bid the competition.  The answer is not about percentages, it is about a skilled negotiator who understands the situation and hand-holds his/her clients through the process. 

~Best Wishes,

Mark Atteberry
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October 17 2010
Profile picture for debbiebaer23
Thank you all - I appreciate the input.  I have requested the market analysis and will move forward once I have ascertained it.  I truly appreciate Frank's honesty about free advice.  Once again, thank you all for giving me your insights.
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October 15 2010
I don't know Kansas specifics or what closing costs you are picking up that aren't customary but I would think you could subtract them and sleep well unless the property is already under priced in which case that action will likely lose the deal for you. Beyond that any rule of thumb and there are some mostly for investor scenarios, may lose you the property.

This is where a knowledgeable local expert should be able to negotiate a savings in excess of their fee. There are things you need to know about the property like: How much equity is there? How much do the sellers need for their up leg? How motivated and by what are the sellers? and about a dozen or so other questions.

I will warn you that some sellers take really lowball offers personally and may subsequently not sell to the lowballer at any price if can be avoided.

Bottom line is you need competent local advice. This is one of those cases when free advice is worth about what you pay for it. Sorry I can't really help.
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October 15 2010
Profile picture for wetdawgs
No, no rule of thumb .  A rule of thumb would assume that everyone marketing a house used the same pricing standard.   Cash offers on houses don't net a discount any more than offers requiring funding.  A cash offer may be accepted above an offer requiring funding simply because it means one less contingency.

Get a market analysis of the house of interest, and offer draft an offer based on the fair market value.  $170,000 might be the right price, or perhaps $190,000 or $160,000.  Without the CMA, you won't know.

Good luck
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October 15 2010
 
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