Author Topic: Question Regarding A Home Offer  (Read 2666 times)

gregg687

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Question Regarding A Home Offer
« on: June 06, 2016, 12:49:38 PM »
Hi all,
Long time lurker, first time poster.  I'm buying a house and would appreciate any advice.  It is located in a popular part of the city close to downtown that I have rented in for a few years now.

The market is warm depending on the townhome and the price.  The house I am interested in is on the small side but has good updates and has been really well taken care of.  It has been on the market almost three months now.  The house is listed at $224,900.  What would be a decent first offer to make?  A house on the same block just went on the market last week that is slightly bigger but I don't like the layout quite as much and is listed at $219,900.  With how long it has been on the market, is offering $200,000 too low?

Thanks for any response! 

forummm

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Re: Question Regarding A Home Offer
« Reply #1 on: June 06, 2016, 01:35:46 PM »
If you have an agent they should be able to help you with this.

If not, the choice is yours. Worst case they reject or counter. If it's been on the market 3 months it means it's way over priced. The fact that they haven't lowered the price means that the owners (and maybe agent) are clueless or stubborn (or underwater). Good luck!

Jim2001

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Re: Question Regarding A Home Offer
« Reply #2 on: June 06, 2016, 08:54:39 PM »
Are you already qualified for a loan?  Do you have a sufficient down payment?

Since you won't be able to lower it once it has been made, make the offer so low you're embarrassed.  Put up a big deposit to show you're serious, contingent on a thorough inspection, but make sure all of your homework is already done so you can close the deal. 

gregg687

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Re: Question Regarding A Home Offer
« Reply #3 on: June 07, 2016, 05:33:19 AM »
Thanks for the responses, that makes me feel better about offering in the 195k range.  I am qualified and have the down payment.  I decided to go much lower than I was qualified for to have lower payments and be able to keep saving/investing.  I have been doing a lot of research, looking daily online at houses in the area  and have walked through a ton at this point.   

When talking to a lender they stated that the difference of putting 20% down and 10% down would only be the difference of .37% (3.5 as opposed to 3.87) and there would be no mortgage insurance.  Since the loan is relatively small, wouldn't it make more sense in my case to just put down the 10%? I'm trying to keep the payments low as I plan on making this a rental property in five years or so.  Again, thanks in advance for any advice as I'm trying to learn and make a smart decision.

Jim2001

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Re: Question Regarding A Home Offer
« Reply #4 on: June 10, 2016, 11:18:04 AM »
You're getting a great rate (historically) either way.  If you're more comfortable with 10% down, go for it!

SwordGuy

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Re: Question Regarding A Home Offer
« Reply #5 on: June 23, 2016, 07:47:45 AM »
Did you get the house? And for how much?

FYI, the county government will have copies of any liens on the property.  This can be found online in many counties.  You can find out how much they borrowed to buy it (and when) and how much they have pulled out via a HELOC (and when).

You can find average interest rates for the month before the lien at http://www.freddiemac.com/pmms/pmms30.htm.

With that info and a mortgage calculator, such as https://www.drcalculator.com/mortgage/, you can estimate how much they might still owe on the property.

It's not 100% accurate (they might have a better or worse interest rate, or different terms than the standard 30 year loan), but it can put you in the ballpark of how low they might be able to go without having to come up with cash to sell the place.  Knowledge is power. :)


Fishindude

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Re: Question Regarding A Home Offer
« Reply #6 on: June 23, 2016, 07:54:52 AM »
I always start low, you can always go up.
Nothing wrong with starting at $200,000.

Realtors always try to shame you into offering as close to listed price as possible so they can get a deal done and a quick sale.   They always say "you don't want to insult the seller" which is BS.  If the seller doesn't like your offer, all he has to do is reject it or counter.   It's your money, not the realtors.

gregg687

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Re: Question Regarding A Home Offer
« Reply #7 on: June 28, 2016, 08:43:10 AM »
Thanks everyone for the comments.  To update, I offered 195 and asked for 5 towards closing to start.  After going back and forth for a few weeks was able to agree to 207.  Its only a few blocks from where I'm currently renting so I'm happy to be in the same neighborhood and walkable to downtown/city parks/stadiums.  It is on the smaller side, but I only need to do a few minor updates and would not be able to find anything close to this price in the area.  Reading this forum the past few months definitely helped me with being patient the entire process.

Jim2001

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Re: Question Regarding A Home Offer
« Reply #8 on: July 02, 2016, 01:10:05 PM »
Thanks everyone for the comments.  To update, I offered 195 and asked for 5 towards closing to start.  After going back and forth for a few weeks was able to agree to 207.  Its only a few blocks from where I'm currently renting so I'm happy to be in the same neighborhood and walkable to downtown/city parks/stadiums.  It is on the smaller side, but I only need to do a few minor updates and would not be able to find anything close to this price in the area.  Reading this forum the past few months definitely helped me with being patient the entire process.

Good job on negotiating a lower price!  Keep us posted on the purchase process and rehab.

Cyaphas

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Re: Question Regarding A Home Offer
« Reply #9 on: July 02, 2016, 02:33:21 PM »
Did you go with the 10% down or the 20% down? I'm curious what your PMI costs and what kind of return/savings you'd be looking at if you sprang for the extra 10% to avoid it.

Blindsquirrel

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Re: Question Regarding A Home Offer
« Reply #10 on: July 02, 2016, 07:33:00 PM »
  Good for you! Always good to see someone buy a house they want!

gregg687

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Re: Question Regarding A Home Offer
« Reply #11 on: July 06, 2016, 09:21:16 AM »
I decided to go with 10% and have a PMI cost at approx $50/month.  I decided to keep the extra cash because I will have to hire someone to put on a roof top deck and to make some other upgrades.  I plan on paying more of the principal and getting it off in the next year. 

Side note- I suggest everyone to get multiple mortgage estimates- I found that a little research can save A LOT on closing and other fees.  Even though I have excellent credit, one lender was trying to make me buy the rate down to what it is currently at!  After questioning him and telling him I was going with someone else, did he then offer the current rates and said "I had a great deal come across my desk this morning and we can offer you this for this price".  Needless to say, I stopped responding to him.