advice on home offer/asking price

[Anonymous]

we are looking at a house, listed at 191k. they originally listed 14 mo ago at 198k. due to being on market for 14 mo its been relisted at 191k. we love this house, and wouldnt mind paying the full asking price. but how smart is that in the "buyers" market. they turned down our offer of 184k. so, is it ridiculous to offer full asking price.. im wondering how far we should go it just doesnt seem like they really want to sell this home.

[cobaltnv]

Did they reject your $184k offer outright or did they counter?  There is not an easy answer to your question. The best way to determine "fair market value" for the house is to compare it with similar sales over the past 0-6 months. 

[Lel]

What does your realtor think is the fair market value of the home?  What have comparable homes in your area sold for?  How long ago was it relisted at the new price?  They've cut their asking price by only 3.5%.  That's not much of a discount.  Did they counteroffer?

I've read studies that have demonstrated that if I house is overpriced by X% above fair market value, it often sells for X% below the fair market value.  This happens because the house sits on the market, attracts no interest, and is stigmatized.  The sellers then can't even sell their home for fair market value.  I saw this happen in a big way in my neighborhood.  I recall a poster here being advised by her realtor to overprice their home, and sure enough, it sat on the market.  So if you can figure out the market value, this could give you some guidance about what to offer.  Of course, someone else could step in and offer the full asking price.

In the end, however, it's going to be up to you to decide how much you think the home is worth to you.  If you really like the house, then an extra $7000 isn't going to matter as much in the long run.  If you don't end up getting this home, you'll eventually find another that will make you equally happy.

ETA: I type too slowly. 

Message Edited by Lel on 09-22-2009 02:06 PM

[Anonymous]

If the house has been on the market for 14 months and they have onyl dropped the price 3-4% over that time, Either they are living in fantasyland, or they do not have enough equity to drop the house further and still pay realtors/retire the loan.  Especially if they did not counter.  I would assume tha second of those two or a combination.

I would not pay more than the house is really worth and if it has been on the market that long, it is probably closer to the value you offered than what they are at.  What does your realtor say?  Does he/she think it is overpriced?  Were you guys asking for sellers concession as well?  If you were asking for seller to pay closing as well I could see that much of a price drop being unacceptable to them.

[Anonymous]

we are asking for 5k in consession to pay for our closing costs. However, my realtor found oud they denied a 184k offer without the concession as part of it. The homes in the area are selling for similiar but most do no have garages and thats adding the extra. I do know if the appraisal comes back at less, then we'd take our offer back, or they would have to lower the asking price. I do love the home, but I dont know how smart it would be to pay full price. I know the seller would take a hit if they have to contribute.. but we offered almost full price.. im just not sure if i should counter back.. they flat out refused us at 184k.

[Anonymous]

you do have to understand that at 184 with 5K in concessions, the seller would only be left with roughly around 163 K or so after their costs.  They may just simply not have that much equity, or that may not provide them with enough $  to purchase thier next house.  I think asking 184K with concessions was an OK starting offer, but am not surprised it was turned down if the market shows good comparables like you said (and having a garage does add alot of value).  Remember when looking at your offer, the seller looks at net $ to them.  so your offer was not 184, it was 179 on a 191 list price. 12K under asking.  It really depends upon the local market, the actual house, and the buyers $ position whether a seller will negotiate this much.  The fact that they did not counter though leads me to believe there are other offers in play.  I would say if you really like the house and you are planning on staying for awhile, counter.

[angie204]

We put an offer on a house that has been on the market for about 11 months.  The original asking price was $170k.  The revised asking price was $159,900.  We offered $155k plus $5k in concessions from the seller.  They countered $161,400 and accepted concessions.  We countered their counter with $161,400 and $6k in concessions.  They accepted.  So all things being equal, they are "netting" about $155,400 (minus listing expenses of course), which is about 91.4% of original asking price.

There have been no comps sold in the last year within 1 mile.   We are still waiting on the results of the appraisal.  I hear that it is "in" today but since our LO is on vacation until next week, I don't have any numbers.

The house we are buying has been maintained perfectly.  The sellers are the second owners, and have lived there for 30 years.  The only thing the inspection showed as deficient is an oak tree that is growing into the side of the house.  Thankfully it hasn't pushed into the roof or caused any structural damage.  We set a repair cap at $1000 though, up from $500 standard for our area.  Therefore I am confident of the purchase, and do think we have an excellent deal.