June, Home Buyer in 11209

Are there any guidlines on how much of an offer to give vs a listing price?

Asked by June, 11209 Sun Jun 1, 2008

As an example, if a co-op is $475,000 should I calculate let's say 10% less and offer $427,500?

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this question was asked over 4 years ago!
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0 votes Thank Flag Link Tue Jun 19, 2012
Dear June,

Very good question. It's difficult deciding what is a good offer to make when you find a house you like.

Before you make offers, you have to know your maximum financing amount/purchase price. Do not be as concerned with formulas and percentages as you are with your own bottom line.

First things first: when making an offer, focus on what your monthly payment will be for the mortgage financing, including taxes and insurance. If that payment is within your means, then your Mortgage Banker will determine the maximum loan/purchase price for you based on all the factors of the monthly payment, your down payment and your mortgage qualifications.

Begin making an offer with the following standards:

1. WISH LIST. Does the home meet MOST of the requirements from your Dream-Home-Wish-List? The Dream Home exists only in our minds; it's NOT out there waiting for you to stumble across it one Saturday afternoon. But you can find the right home using your Wish List. When you find the home that meets most of your requirements from the wish list, then it's time to make an offer.

2. FORGET LIST PRICE. Based on your own research, shopping in your chosen area, select the price you're most comfortable with, regardless of list price/asking price. In other words, you'll find a home listed at $268,000, but you've seen at least a dozen other similarly constructed homes in the immediate area priced or sold at $235,000. What makes this home so special that it's priced $33,000 more than the average price? Remember, your Lender will appraise the home based on similar homes and those prices.

3. MAXIMUM OFFER. Never exceed the price based on your mortgage qualifications, no matter how much you LOVE the home. You have to be able to afford the payment for the next thirty years. That in-ground swimming pool you love isn't going to pay the mortgage for you!

4. OFFERS ARE NOT PERSONAL. An offering price can NEVER be misconstrued as an insult to the homeowner. This is business; you're not going to hurt anyone's feelings! Make the offer based on a price you're most comfortable with!


5. OPENING OFFER. NEVER open with your maximum offering price. Test the waters with your opening bid: you want to see if this Seller is a SERIOUS Seller who understands this is a BUYER'S MARKET. If there's no reaction to your offer---assuming the price you offered is within the reasonable range of current market prices---you may be wasting your time with this home/Seller. It might be time to move on to another home.

See my "Five Steps To Making An Offer" for the best way to negotiate on your home purchase.
http://www.tcurranmortgage.com/2010/04/09/five-steps-to-maki…

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Tue Jun 19, 2012
June it depends on the seller's motivation, if he NEEDS to sell, he will negotiate until it is sold. If the seller WANTS to sell but does not have to sell, then you will face an uphill battle. Just offer that most you can and provide as much documentation (credit report, w2's, bank statement) to make your offer stronger.

Good Luck

Henry
917-497-0729

http://www.QueensLIRealtor.com
0 votes Thank Flag Link Mon Jun 2, 2008
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