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Purchasing a 1988 home. Listed price was $220k. My Realtor asked me to offer $222k. Should I?

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October 20 2010 - Murrieta
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Answers (18)

Hi,

The first question I have is "do you trust your agent"? Normally when a buyer asks me what they think they should offer, it's because they trust me to know the value and market. They know that we've run comps and have gotten whatever information we can from the agent and listing....have you done that?

Some homes have been seriously under-priced to move quickly, such as short sales and REOs, and your agent might be correct that the best chance you have to get the home is to offer over asking price.

I'm assuming this decision has already been made...since you asked awhile ago, but for others that might read this stream....make sure you are working with a Realtor® whom you trust. Run comps and research the situation...then you will be in a position to offer with confidence.

Karen
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January 08 2011

If the home is still on the market since this comment was posted back in the later part of October, I would say comfortably that you may be able to come in few thousand dollars below the current list price or more. Obviously if it is still listed as active, there isn't much activity and there may be a good reason for it.

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January 08 2011
I would first ask yourself if the 2k is really a deal breaker for yourself . Then I would ask your agent the following. 1. Is there multiple offers? 2. How is the home price compared to recents sales? ( past 90 days) 3. What's the known BPO ( Broker Price Opinion)? Then based on the info make a decision. 2k is nothing when amortized ove your loan term ( 30 years?)
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January 08 2011
It is up to you, but did he/she give you any reason why you should offer more. It might be a great deal for the extra $2,000 and he/she thinks you will lose it without the little extra $$. In the big scheme of things it is a very small amount compared to the house price. Ask you agent why, and what are the comps. Perhaps this is better than the other homes for sale or that recently sold. Be careful not to stress over very small amounts of money compared to the overal price.
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January 07 2011
You really have to ask your realtor a number of questions: 1) what are the comps? 2) are there any other offers in? 3) How long has this home been on the market? 4) what is the net to the seller-are you asking for closing costs? 



It may very well be that you realtor is spot on. -Just be sure that they have solid reasons that support why you are submitting your offer at that price. Talk to them and be sure you are making an informed decision.
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December 13 2010
It's completely up to you if you think it is worth it. Have your Realtor provide you with some comparables, sit down together, and make a decision based on the facts. As Jane said, banks are looking closely at market value on short sales so 222K still may not be enough if the bank doesn't agree with it. 2K is almost nothing in the scheme of things unless it's all cash.


Good luck and let us know how it turns out!
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October 21 2010
First of all, congrats on getting ready to write an offer.  This is always an exciting time.  

There are many great answers here.  Do you know if there are multiple offers on the home?  How badly do you want this house?  If the comparable sales support the higher value and you're comfortable with the offer, then put the ink on the paper.  I always give me clients the facts and figures and let them decide based on those numbers.

Best of luck to you!

Ryan Smith
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October 20 2010
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WHat do YOU think it is worth? if you think it is worth that offer it. If you think it is worth $125k offer that. Just be aware that we are still in the middle of a housing (price) crisis and prices are still likely to drop for another couple of years. What you offer today could be very high tomorrow. Just as offering a reasonable price in 2008 after the drop from 2006 put people underwater today it could happen to people buying today also.
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October 20 2010
This really depends...How many offers are currently on this home? Is it new on the market? Is it in an area you want and does it have what you are looking for? If you are not asking for closing costs and it will appraise, follow the advise of your Realtor! Thats why you are working with a professional.
Have your Realtor do a market analysis on this house for you before you right the offer. This will give you peace of mind.
Good Luck!
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October 20 2010

Have your agent show you recent sales of similar homes in the neighborhood. This information will help you determine if the offer price of $222,000 is within the range for this area.

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October 20 2010
Without knowing more, it is difficult to answer.  If it is a home you really want you need to decide if it is worth it to you.  How will you feel if you lose the home compared to possibly overpaying a few thousand dollars.
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October 20 2010
Profile picture for rainydaysahead

Not sure how this website works. however, I wanted to thank each and everyone for their advice.  I believe my agent is doing her best.  I just needed a little reassurance. 

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October 20 2010

$220,000 at least, due to the fact that if I am correct about the home, it is a short sale with 3 bedrooms and 3 bathrooms, over 2000 sq. ft.   There is a comparable sale for $232,000.   

One thing that you have to keep in mind is that the banks are looking very carefully at, "Recent Sold Comparables", and all they care about is their bottom line.

You don't mention if you are asking for closing costs to be paid or if you are a cash buyer.   So determining if this is the best price is difficult without knowing exactly what other terms make up your offer.

One thing is for sure is that there are multiple offers on almost every home that is priced below $300,000, if it is in good shape here in Murrieta and Temecula.   Our prices have gone up and there is much competition.

Good Luck, I hope you get the home!

~~~~~~~~~~~~~~

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October 20 2010
The best way to determine an appropriate asking price is to look at sold homes that are comparable to yours. They should be houses that have transferred in the past six months and within a few miles of your house (or at least in the same school system).  Look at the price per square foot of the best comps, and that will help you determine your asking price.  In this buyer's market, it surprises me that you would have to offer more than asking price, but it's possible!
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October 20 2010

With all the compation in it is best to offer what you feel comfortable with inorder to be successful in getting your offer accepted.  You never know how much someone is willing to pay until after the close of the purchase to determine the price and by that time it is too late.  You do not want ot let a property slip thorugh by for a few thousand dollars if it something that YOU really want?

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October 20 2010
I imagine you came here as you don't feel comfortable with what you agent said. Your best bet is to look at the SOLD comps in the area with similar square footage to get an idea of price.  Then think about what the home may need to be fixed.  I think you should follow your agents advice if you feel comfortable or make a suggestion to your agent and see what they say.   If the price is in there perhaps your agent feels the extra 2,000 over list will make your place in getting the home easier and more competitive.  You do know it is a competitive market. 
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October 20 2010
Ask your agent to show you the most recent sales of similar homes in the area and let you know how many days they were on the market.  With that information, you will know what you should offer and whether or not you were given good advice. My guess is that your agent knows the house is priced very well and will be sold quickly.
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October 20 2010
Well, I would ask your Realtor why she wants to offer more.   Are you in an area where there are multiple offers?  Are you asking for seller's help for closing costs?  You need to make sure you understand why she wants to ask for more.   Another point is to make sure it will appraise at that price too.  You can offer more but will it appraise for that.  But just make sure you understand why and are comfortable with it.  They are professionals and have a pretty good idea what they need to do.
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October 20 2010
 
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