Profile picture for joehype

is offering 335k on a 399 home a good offer?

I've been looking at this home in in a good community, and great schools. I like the house, but the owner's have moved after owning the place for two years. They moved because of husband job. The place is nice, but seems like it has a few problems, still trying to find out if it floods, and need's repairs. I'm looking at the area, and the sales of homes range from 287 - 478. Out of 12 homes, 11 sold for less. Just seeing what people think.
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November 19 2011 - Chicago
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Answers (13)

You can make the offer & explain why you're offering such a lower price than what they're asking. As long as you have facts to back up your offer I think it's ok.
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December 02 2011
If the home is priced appropriately then $335k on $399 is not a good offer.
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November 30 2011
It depends.  Have your agent pull some comparable properties that have sold in the past six month.  As a buyer, that should help you come up with a fair price.  The condition of the home is important as is location.  Look at the taxes, they can vary significantly.  Your agent can also find out what the owners' mortgage is.  I think your offer is a good start to negotiations.  Good luck!
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November 21 2011
Ask your realtor, or if you are not working with one yet, interview a few. They will be able to provide you with comparables and structure your offer well enough to get it accepted. At the same time, a realtor will be able to structure your offer where you will be buying the house at a great deal. let me know if you have any other questions.
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November 20 2011
Hi Joe,

Don't go this alone, get yourself a Realtor to work with you, it's FREE!

The only real problem I see in terms of pricing (your offer) is what the sellers owe versus what they need to net to sell free & clear, in other words not have to bring money to the table.

The proceeds may not be enough to cover the mortgage balance, possibly forcing them to short sale, which may or may not be a problem for them.  Obviously, if the offer is too low it's up to the sellers to accept/reject, you can only try.

Get your buyers agent to research the recent sales as comparables, then based on that decide what to offer.  In the end it doesn't matter what the sellers owe because if it doesn't "comp out" for YOUR lender you won't be able to get the loan for any amount above the fair market value (appraisal).

Hope that makes sense.  If you need further assistance please don't hesitate to contact me directly.

Good luck!
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November 20 2011
Profile picture for joehype
thank you everyone for your replies. I appreciate the advice. This is the first time i am buying a house, so I'm am learning a lot in the process. It does need repairs, and from what I know it's not in a flood plain. After asking about why things were a bit higher on off the ground, they did say they had a minor water problems, but nothing major. But when we looked at the whole house, we did notice a few small open sewers, and also we noticed everything in the basement on stills, at least 3 feet up.

My parents have done the same, because they get flooded, so that concern me. I looked at the walls, and noticed some dis coloration. I will get an inspector to check it out, and I'm not trying to low ball a deal, just really looking at it at a whole, and being a 115 year old house, I see a few problems, that I will need to invest to fix in. The couple that bought it, have moved after 2 years, they have bought another house, and this house has been on the market for 4 months, it original was priced at 435,  and dropped 3 times since that price.

They bought it at foreclosure at 315k, that is why, after looking at all data, I came up with 335k. Thanks again!!
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November 20 2011
Its all relative. The house could of been sitting here for sale for years. The house could of just came on the market and its getting ton of showings. It matters about this particular house. I would consult with your buyers agent. have them draw you up a CMA. If the value is there, it may be a little low. However, an offer is an offer. Its not a terrible starting point, and I am seeing lower offers than that come in nowadays. Regardless, best of luck.
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November 20 2011
Consult your Buyer agent first.  Their experience in the market is your guideline.  If you do not have a buyer agent, get one. 
Find out what ratio the asking price to selling price are in the market.  That's a good start, then deduct the WRITTEN cost of repairs to bring the home to living condition.  This is a good starting point. 
And Yes get and inspection quickly.

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November 20 2011

1. If the owners have only been there 2 years tax records will tell you what they paid and prices have not gone UP anywhere in 2 years. If anything they have gone down.

2.The price range you mention is toobroad. The comps are not apples to apples. You need to have your agent do a market analysis to see what other similar houses have been selling for.

2. Sometimes when a transfer occurs the company helps the seller out with moving/closing costs so do not be concerned what you offer is too low


3.I do not understand why you canot tell if theplace needs repairs. Usually repairs are pretty obvious, but sounds like you need an inspection, but you do notpend fo rthat or anything until you have an accepted contract otherwise you are potentially wasting your money.

4 If you are not using a real estate agent then you better use contact an attorney to help and do not sign ANYTHING until your attorney tells you to.

5. Every R E transaction requires the seller to give the buyer a Seller Disclosure where the seller answers 20+ questions about the condition of the property INCLUDING if it is in a flood zone and/or if they have had water iissues. An inspection can also tell you the answer.

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November 20 2011
'still trying to find out if it floods'??? Hire a home inspector, also look at flood maps to see if its in a flood zone. Its pretty easy to see if a home 'floods' 
If this family have been relocated there potentially is a relocation allocation for them so they are not in a rush to sell at bottom feeding prices. If this home is in what you say is a 'good community with good schools' I doubt whether you will be able to pay that lowball price of 335. What does your realtor say? She would have done a comparative market analysis on it and been able to  tell you what the home is worth. If you were my client and wanted to do this low ball offer, we would write it up, what is the worst case scenario? They say no or write it back to where they want to be. 
Every home has a 'few problems' thats why you get it looked at professionally by a home inspector and then try to get a home warranty for the first year or so.
You won't know if you don't try.....go for it:)
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November 20 2011
If the owners have only owned the home for 2 years, you may first want your realtor to find out what their mortgage is prior to making your offer. Two important issues could be, if there is a mortgage and your offer is too low, the sale may then need to be a short sale which could create unwanted issues for the seller and you. Second is the appraisal. If many comparable homes have recently sold for much less, a higher offer may not appraise. You and your realtor should do your homework first and make sure your offer is in line with the comps. Lastly, have your realtor ask the listing agent what the sellers "Motivation" is at this time. Have they had any offers in the past and if so, how much? Why did the offers not come together? Sometimes an agent will share the info. If not, simply ask if they will entertain a lower offer. Depending on what the agent says could help you in your offer strategy. 
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November 20 2011
Profile picture for the_country_hick
If 11 out of 12 sold for less I would be offering less.

You should be able to google flood zone and see if that place is in a flood zone or not.
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November 19 2011
Depends on the terms of your offer and if you can justify the price using comparables in the area. Sounds like an inspection contingency is in order due to flooding and other concerns.

Try to submit your offer with proof of funds (for a cash offer) or pre-approval for a mortgage ... it helps your offer look stronger.
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November 19 2011
 
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