Made an Offer on a House
Community – I just made an offer on a house. The list price was 625 and we offered 530. They countered with 600. We countered again with 550. The realtor said the home owner is firm on 600. What do you guys suggest we do? We really love the house but convinced ourselves not to…
Community – I just made an offer on a house. The list price was 625 and we offered 530. They countered with 600. We countered again with 550. The realtor said the home owner is firm on 600. What do you guys suggest we do? We really love the house but convinced ourselves not to go above 550.
On a side note: can someone recommend a lawyer or home inspector? Its a 2 family brick house.
Take everything the broker says with a big grain of salt. If you really would walk away at $600k, make sure the seller knows it. Don’t pay more than you can comfortably afford.
@ Guilkazoid: don’t forget to budget for a good, solid inspection and put a contingency clause for mortgage appraisal AND satisfactory inspection.
People can be unreasonable. The real value of the rental reno should be based on the extra rental it brings, which may be say $300 extra for the first 5 years, then an extra $150 for the following 5 years, and then nothing afterwards, because 10 years of rental will suck the shine out of anything. How newly renovated is it? You’re looking at a value to you of maybe $25,000 at best, but it may have cost him $40,000. The seller may get hung up on being made “whole.”
How long has the house been on the market? Are you willing to let it go? what is the average time on market in that area? Depending on the answers, the best strategy might be to counter with your comps, be firm on 550K, to let them stew for 4 days and then withdraw your offer if they don’t accept by next Monday. Let their broker bully them. He’d rather have 90% of his commission than nothing. Or just wait without communicating anything, complete silence until they call you back; by then they might have negotiated against themselves. If you think you can “overpay” a bit because a fully renovated rental appeals to you, and it’s rare to find (I don’t know your neighborhood, so I’m not saying it is), wait a couple of days and make a best & final at $565K, valid for 24 hours.
raphael9,
1) OP said it’s sunset park
2) 8 months ago a house sold for 550k (3200 sf) on the same block.
3) see 2)
4) gut reno on rental unit
5) OP didn’t mention
closing costs?
A big one is mortgage recording tax ~1.8% of the loan
For the loan – app fee, underwriting fee, appraisal, etc. etc. will run a couple grand. (Don’t pay points)
You’ll have prepaid items at closing (prepaid interest, escrow), and title insurance
A couple grand for your attorney, who is the one person on your side and should explain anything you don’t understand and help you avoid paying amounts that aren’t correct.
I’d budget 15k+ as what you need available in your bank account for closing, but you’ll get a Good Faith Estimate from the lender when as part of the loan application process.
Le GF:
$550 is just a nice round number for us and we decided we should stick to it based upon our current lifestyle as renters in brooklyn. We’re first time home buyers and this is the first offer we’ve ever made. Ever.
It is emotional, it is scary and it is very real.
We can afford the $600K and when it comes down to it I loved the place so much that I’ll offer that not to lose it. We could probably even go a little higher, but we’d like to maintain some of our savings for a rainy day (or a new roof).
🙂
raphael9: I’d say, it all depends. 15% below ask could be or not be an insult. It depends on too many factors that readers can’t know, and OP probably can’t know either. I recently put my place on the market and I sure wouldn’t take 10% off ask, and I don’t need to leave. So it all depends. Posters here complain constantly about way too high asking prices but that seems necessary if everyone thinks 10-15% off asking is a given.
“wait, you offered 530K on a 625K listing? If I were homeowner I’d counter with “go s**t in a hat.” ”
That’s flat out ridiculous. Since when is an offer of 15% below ask an insult? That’s the kind of first offer a realistic and unbiased seller can counter and get a good sale out of. Notice how the op is already nervous and thinking about going higher than they want, and making successive offers without a counter?
What op doesn’t say is 1) where is the house 2) what are the comps 3) is it cheap for its area or pricey 4) is it in great condition 5) does it have major faults
so how can anyone have a valid opinion as to what this house should, could or will sell for?
sorry for delayed response. i been busy at work. i will try and address all your questions. the house is on a beautiful brick block on the border of sunsetpark/bayridge. lower avenues.
@all – i asked 530 on a 625 listing because i looked at a few comparables. 8 months ago a house sold for 550k (3200 sf) on the same block. this house is 2400sf. but the house we are bidding had a full gut reno done in the rental unit (3br) that brings in 1700/month. all legal with papers.
@sebb – no its in sunset park
@crown – we really like the house, the limit was a matter of what we designated before looking. but we can afford the 600k
@daveinbedstuy – thanks for lawyer advice and i think the guy psychologically doesnt want to go below 600, he had it listed for 750 last year before the reno.
@maly – we did bring up the recent comps. but the owner feels his gut reno on the rental justify him holding at 600
@more4less – yes we do have a sweet pad, low rent, great LLs, thats what makes the decision harder. but we been set on purchasing a home
@all – what can one anticipate for closing costs?
ok back to work! keep the community posted!
dave, and what currently unplugged orifice do you pull your information from?
You are no smarter than anyone else. Hell, you bought a house at peak market in a very low-income area, because yout hought you were being a smart barracuda, and now you cannot unload it. So keep the anatomical slurs to yourself.
10% off ask isn’t “standard.” It really depends on the house. As others have said, you should base your final decision on comps and what you are comfortable spending.