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Chief cook & weed puller
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I've never bought real estate. How much below the asking price do you dare offer? There's a place near us with a relatively new home, the location is great but the cost is way too high. I really think they're asking too much, it's about 10 acres but there is absolutely no landscaping done on this place. Someone came in a couple weeks ago and mowed the weeds down, and hauled away part of the garbage but it still looks bad. Plus we've heard that the siding is buckled on one side from when another structure was burned down. Any thoughts?
 

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Hire an appraiser and get an opinion of market value before you make an offer.
 

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Guess it depends on how bad you want it. If you are willing to walk away from it offer what you are willing to pay.

Land next to mine was for sale for a while at 1.35 million. A developer offered 950 and it was turned down. Two months later the offer was accepted... and the developer had to find more investors because they had moved on a bought something else. So sometimes you just never know.

On a previous purchase I walked the property and the house with the owner. I pointed out several things that needed to be fixed and were wrong. I threw out big numbers like, "man, that would take 2,000 to fix and adding this or that would be another 500. Look over there, if I added that it would be another 3,000" I got it for less than 35% of asking price.

But there is a fine line between insulting and just making observations. Make sure you don't offend...

Just a thought.

If this is a first purchase I agree with Dutchie, get an appraisal.
 

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Overpriced real estate is far too common. People that list things too high do so because they know they can always come down.

Appraisals help, but they should NOT be taken as gospel truth of price reality. I've seen an appraisal on a vacant piece of property being sold at the advice of an appraiser for $70000. The buyer did backflips all the way to the bank and resold the property for 275,000.

If you're getting a loan, you'll probably be required by the lending institution to get an appraisal.

The place you're talking about has some red flags looming about. Its overpriced. And according to you, its poorly maintained. These are serious red flags. I'm convinced that most homeowners that have junk and/or debris laying about when they are trying to sell the place just plain don't care.

Educate yourself about the property and the area. Through land sale records at your county courthouse, find out what vacant land sells for in the vicinity. Then find out who drilled the well, who installed the septic system, who built the house, etc. Is the house a stick built home, built to code, or is it cheaply constructed by workers of questionable skills? If possible, talk to the building contractor. Its possible valuable info may be gleaned. Perhaps the house is a cheap double wide. Know that these things should not be valued anywhere even close to the value of a stick built home.

When it comes time to make an offer, don't even consider the asking price. Asking prices are often fishing expeditions, hoping to land a sucker. Base it upon a rigid set of standards. Value of the vacant land, value of improvements, quality of construction, and then realistically deduct costs related to any needed repairs.
 

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If the house is under a realtor you can make any offer all the way down to one dollar and they have to present it to the owner. It makes no difference what they are asking even if it is a million dollars.

Of course they do not have to accept.

That is the law.

My realtor friend who is selling my house for me just told me that other day.

bumpus
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I really wanted the metal bldg and land that adjoined our property when our neighbor passed away. The place was later put up for sale by his brother. I went over and offered him cash for the amount the tax appraiser had the land appraised at. I had already made arrangements at the bank on this loan if he accepted. They accepted the deal and it is now mine. I felt I really came out ahead.
 

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My house is priced normal, and I'll take 20 % off.

bumpus
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Depends on how much you want the property, and how much risk you wish to take in missing an opportunity to purchase it.

Rule of thumb, if you're curious, make an offer which is actually lower then you are willing to pay for the land -IF it's within the sellers range but still too low the seller will come back with a counter offer that is likely lower then the offered price, but higher then your offer. IF it's totally out of the ball park, it is not likely you will even get a counter offer.

The above is usually safer if the property has been on the market for awhile, I would not advise you to do this with newly listed property that is near perfect for your wishes, because you have no idea what the rest of the market thinks yet. You can still do the lower offer, but in the mean time someone else who wants it more might beat you out of the property.

If you are going to be borrowing the money to finance the property, an appraisal will be ordered by the lending institution and you will pay for it then. If said appraisal comes in a certain percentage under your offered price - you will not get the loan and hopefully, getting the loan is part of your offer. :)

Or so I've been told.

Hugs,
Marlene
 

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Nohoa Homestead
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bugstabber said:
I've never bought real estate. How much below the asking price do you dare offer? There's a place near us with a relatively new home, the location is great but the cost is way too high. I really think they're asking too much, it's about 10 acres but there is absolutely no landscaping done on this place. Someone came in a couple weeks ago and mowed the weeds down, and hauled away part of the garbage but it still looks bad. Plus we've heard that the siding is buckled on one side from when another structure was burned down. Any thoughts?
You offer what you think the property is worth and what you are willing to pay. Simple as that. If the other party thinks it is too low, they may counter-offer which is usually splitting the difference between asking and offering prices. Most places are overpriced these days because everybody seems to think you are supposed to make a profit on selling a house. But with the real estate market going down like it is, lots of people are going to have a a wakup call real soon.

donsgal
 

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If you are going through a realtor they will be the ones who take the offer and relay that to the sellers. The seller can tell the realtor not to accept offers below a certain price and if you offer below that they can trashcan your offer.
If you are doing a FSBO you can make an offer but there isn't anything that states the owner even has to accept your offer as a true offer. It is their choice if they want to take offers or not.
Make an offer according to how much it is worth to you and be ready to buy or walk away from it.
 

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Another thing about making an offer to purchase. You may write an offer with several written contengencies.
Common examples are:
offer is contingent upon buyer securing financing at x% interest
offer is contingent upon property passing structural, electrical, water quality, building code and septic inspections--buyer to pay for inspections Quite often, the lending agency DEMANDS these inspections be made.
offer is contingent upon property having unfettered access

YOU are the one writing the offer and may include any contingency you see fit. As long as the contingencies are reasonable, any buyer that is serious about selling will gladly accept them.
Including contingencies such as:
offer is contingent upon securing financing at 4% interest
and all other ludicrous contingencies will be viewed as a waste of time and you will be considered a non-serious buyer
 

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Hoop said:
Another thing about making an offer to purchase. You may write an offer with several written contengencies. ... ludicrous contingencies will be viewed as a waste of time and you will be considered a non-serious buyer
Any condition on a real estate deal weakens the deal CONSIDERABLY. I bought my last two properties with lowball but unconditional offers. Unconditional means just that, no conditions. No financing, no inspection, nothing. If you want a home inspection get it done before you make the offer, then you know what you are offering on.

Most home inspections are a huge waste of the seller's time, and are the thinly disguised attempt by the buyer to whittle down an already agreed on price.

Making an unconditional offer takes a lot of nerve, make sure you can deliver the goods before you write it up.

Pete
 

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agmantoo
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I buy and sell land more frequently than most. I buy land at what I consider good value to me only or I do not buy it. The asking price is just that, something the seller is wanting or wishfully seeking. The key to getting a good buy is to know what the property is worth on the market and worth to you. The most persuasive incentive to transact is the ability to close immediately(30 days or less). Rarely do I put on any contingencies other than the seller being able to provide a clean deed and that I can obtain title insurance. I recently was aware of a property on the market for $480,000 transacting for $280,000. The first offer was for $260,000 closing in 30 days which was declined and countered at $280,000. I have even seen the seller bring money to a closing in order to rid himself of an obligation that was leading to bankruptcy. Once you get a commitment from the seller, immediately get in writing a sales contract. These contracts are referred to as "offer to purchase and contract", "agreement to sell and buy', etc. Such contracts are binding and will avoid a lot of aggravation. Realize that you will not get all the properties you have interest in bought when you bargain but those properties that you do buy will not have you on the ragged edge of exceeding the value to you nor having a property that you can not re-market due to having paid too much. Batting 300 in baseball will make you a hero, in financial transactions, you must bat 500+ to break even. Good luck with your venture and enjoy the thrill.
 

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Who is they? This is important, who is the ouner? It sounds like you have your eye on a "bank repo", a property already repossessed by the bank. Often the weeds grow up and there is some junk around to haul off. At any rate find out who the owner is, not necessarily who lives there. Then deal with the owner.

The last thing that you want to do is "buy" an apprasil on a property that you do not own. This can cost several hundred dollars for no good reason. Compare prices. Ask local realtors how much other similar properties are listed for, or what they have sold for. Check at the county court house for comparable, recent sales. The recorders office and the auditors office is where to check. The people who work there will help you, this is their job (the boss is elected by the people).

So you say the property is "too high". This may be so, but compared to what? Do some legwork and get the comparables, this will help you in your negotations. :)
 

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Chief cook & weed puller
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Discussion Starter #16
Thanks for all the great comments and ideas. The property is listed with a realtor by the owners, but it is possible there are some bank problems. These people have had some bad things happen to them the past several years and could need to get out from under debt.

The property taxes on the place must be high for a reason, thus the asking price. I should probably give it up and look elsewhere.
 

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I'll tell you what I learned in contracting. You'll have to look at this in reverese for buying tho. You can give a bid and come down later but after the bid, you can't go up.
I typed a contract for the man I was working for and he told me to bid it at
$28,000. I knew it was too little an amount but he needed the job. I didn't say a word to Greg until we were in front of the lady and handed her the proposal/contract if signed, and I set the price at $39,000. Greg got mad as @#$% when he seen his copy but kept his mouth shut and the lady signed it right then.
He still lost money on the job.
Even I under bid it. Heck, you can atleast break even sitting at home.

The point is the way I figured it, Greg could always come down to get the job. All I had to do was go back to the computor and change the numbers.
You can always go up to get the land. But let the man set on it a few days before you raise the bid. Chances are in a day or two, he will change his way of thinking.
And if they have money troubles, you may be thier only way out.
JMHO
Dennis
 

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Nohoa Homestead
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bugstabber said:
Thanks for all the great comments and ideas. The property is listed with a realtor by the owners, but it is possible there are some bank problems. These people have had some bad things happen to them the past several years and could need to get out from under debt.

The property taxes on the place must be high for a reason, thus the asking price. I should probably give it up and look elsewhere.
You might want to talk with them about working out some "alternative" plans with the bank where you just take over their financing. The housing market is going to be in the toilet real soon and they are going to be hard pressed to find a buyer if that happens. If they are having problems with the bank this might be an opportunity to help them avoid reposession or bankruptcy and help yourself in the process. There are about a jillion websites out there that talk about "buying real estate with nothing down" and this is just the type of opportunity that they promote. You might want to study up on that kind of thing and see if it could possibly work in this situation. Ya never know.

donsgal
 

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I once listed a house I remodeled at $59,000.00
The best offer I got was $50,000.00 :shrug:
The Realtor said the house was priced too high. I said it was too low.
I told the Realtor to raise the price to $62,500.00
She didn't want to do it. I said I would get a different Realtor then.
She raised the listing price to $62,500.00 as I had asked. :rolleyes:
It sold 2 weeks later for $62,500.00 with an FHA loan and FHA appraisal.
That was 20+ years ago.

Things are NOT always as they appear.(Usually they ARE DIFFERENT than appearances.)

just my 2 centavos worth, :)
Bruce
 

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Junkmanme said:
I once listed a house I remodeled at $59,000.00
The best offer I got was $50,000.00 :shrug:
The Realtor said the house was priced too high. I said it was too low.
I told the Realtor to raise the price to $62,500.00
She didn't want to do it. I said I would get a different Realtor then.
She raised the listing price to $62,500.00 as I had asked. :rolleyes:
It sold 2 weeks later for $62,500.00 with an FHA loan and FHA appraisal.
That was 20+ years ago.

Things are NOT always as they appear.(Usually they ARE DIFFERENT than appearances.)

just my 2 centavos worth, :)
Bruce
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Similar experience happened with me. Bought a distressed house that had scared off almost EVERYONE who had come to see it......had over 2.5 FEET of water standing in the basement!!! It needed EVERYTHING redone; heating, siding, floors, plumbing, wiring, windows.....the ONLY thing that it had going for it was that the roof had recently been done. After figuring out the costs to do the jobs not counting my labor *note to self: Never Again!......we made a low-ball figure and the bank was glad to walk away from it.......heck, they RAN AWAY.
Spent too much time and money on it and when it was nearly done, got 3 realtors from different companies to come in and give me their best deal on why I should list with them and what they could get for the place. The one was a "friend" of my dads......okay, okay.....they had once worked together once in the past and he had been a screw-up then and not much had changed since......but I wanted to see what he had to offer......not much; he obviously didn't want to sell it as he gave me a low figure; much too low for the area and the recent work that had greatly improved the place. The next guy went too high in his estimation; there was no way on earth that he could ever sell the place for the amount he said he could get. I went with the lady who was somewhere in the middle and told me the truth on what she thought she could get for it. One little detail though......the high water table and springs in the area and the basement floor had forced me to bring in several loads of gravel and spread it across the floor and lay drainage tile around the perimeter and into a sump hole.......then pour new concrete and finish it. This added to the cost several more thousand dollars and I wasn't prepared to "eat it"......told the realtor to add that to the asking price. She said that it wouldn't sell for that amount; I told her it would.......she resisted by gave in finally. Lo and behold, we had an offer inside of a week and closed within the month at the price that I had told her to list it at! So miracles do happen. :hobbyhors :dance: :dance: :dance:
 
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