making an offer

Hey.

Offer what it's worth to you. In big cities,many sellers will take 5-10% less than asking on property that's in good order. In small towns I've found that many are asking what they want and it's a big deal to get them to budge a couple thousand!

RF

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It's not good enough that we do our best; sometimes we have to do what's required. - Winston Churchill

You need to know what similar properties in your area have sold for recently. Your gut feeling and the sellers asking price are not very good ways for you to price property.

If a property is priced at $200,000 and similar properties have sold recently for $75,000 then $100,000 is too high.

If similar properties have sold for $200,000 or more, then you will likely have to pay at least the asking price to get this one and a low offer will be rejected out of hand.

Do your homework. Property prices in your area may have risen or dropped recently. The only way for you to get a good deal is to know the market.

The first thing that got my attention is.... Why are you considering making an offer on a place you haven't walked through at least once, and possibly several times?

You need to know everything you can about that place before you make an offer on it. Who knows what kind of nightmare problems you might be getting into?

Getting an appraisal is also a good idea.

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Our homestead-in-the-making: Palazzo Rospo
Eating the dream

I guess everyone has their own way of conducting business. The way I look at it is: if a seller accepts my first offer, then I paid too much.

There is no lower limit to how much you can offer. Even an appraisal is still someone's opinion on the value of the property. There are so many variables involved that it's hard trying to have a "formula" to go by. In the book, How to Find and Buy Your Place in the Country, the author Les Scher suggests that you should never offer more than 3/4 of the asking price.
When I bought my property, the listing price was $60,000. I made an offer of $45,000. The property had been listed for over a year and had been looked at twice before I had looked at it. After a couple of counter-offers we ended up settling on a price of $50,000.

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"I don't want everyone to like me; I should think less of myself if some people did."
— Henry James

Lots of things to consider.

Termites?
Water damage?
Insulation?
Roof condition?
Electrical?
Water lines?
Well water or rural water?
That buckled siding could mean that side of the house needs to be torn off and rebuilt from scratch? and the damage could extend further into the floors, roof, and attached side walls.

I'd go over it with a fine tooth comb to find out just how much damage there is. If it's more than you want to deal with, then forget it.
Then I'd find some comps in the area to compare.
Then estimates of repairs.
Then you'll have a more accurate idea of what the property is worth.
After all that, I'd deduct any repairs and deduct an additional 20% for overages. That would give me the price that it's probably really worth. Then I'd probably lower my offer another 10-20% because I like to buy cheap.

Most sellers like to set the price to include "emotional attachment". Don't fall for it. Do an honest appraisal and go from there. If it's in as bad condition as it sounds, the owners may be happy to unload it at a very low price.

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Anytime I negotiate with someone selling something, whether it be at a flea market or used car or real estate...my general guide is to make an initial offer that is approximately 70% of their asking price. That gives them some room to counter and me another step to counter offer. If I want the item and it's in good shape and I can acquire it for 85% of the asking price, I'm generally happy.