Home Buying in 19066>Question Details

Roti, Home Buyer in 19010

Asking for your advice?

Asked by Roti, 19010 Sun Feb 10, 2008

House is a fixer upper. From the assistant listed broker i gathered that it needs around 100K to fix it up. Need new roof and other things. Obviously don't have any exact comparables to compare with. This house is in the market close to 200 days. Asking price was 599k and near about a month ago the price came down to 550k. Considering the current and future market situation, where should i start bidding? Would 425K be a laughable bid on this? What would be your suggestion to a starting bid?

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4
Brendan Murphy’s answer
Hi Roti,

I get questions like that a lot, just recently a buyer said something similar with a similar (percentage-wise) starting bid. I think that buyer will be under contract by Monday and he started with a similar low bid. The worst thing they can do is say "no". This is a buyer's market is most area codes, so I wouldn't call a bid like this (80%) "laughable". I'm sure it won't make the seller smile but hey, at least they're getting an offer. Do whatever makes sense to you. More importantly: If you are not working with a buyer's agent, be careful what you tell a listing agent who works for the seller. Anyway, the worst thing that can happen is that you can find out how serious the seller is about selling. Good luck!

Brendan Murphy
Broker, CRS, GRI, ePro
Raving Real Estate
Laramie, WY 82070
1 vote Thank Flag Link Sun Feb 10, 2008
Roti:

The Somers (answer below) hit the nail on the head (no pun intended)...

The "After Repair Value", a.k.a. "ARV" - is important to know. And if you are going to be getting an ARV loan, then lender is going to want to make sure the ARV ratio is also in balance.
There are certain ratios that are used (your Realtor and/or lender should advise you on this)..

Best of Luck,
John B.
0 votes Thank Flag Link Sun Feb 10, 2008
Hmm, almost 23%

Actually Roti you do have comparable. Have your Realtor compare.
Dwelling.
Lot size.
Bed / Bath.
Square footage.
ONLY use Solds for the last three months. Also check the pendings.

Now make a list of repairs, with reasonable cost.

Deduct repairs from market value.

Now you have the facts not just some " Laughable " number

Ask that your offer be presented in person by your Realtor. They will say no, therefore have your Realtor write a letter stating your case, and ask to have the seller sign it. Showing that he has read it.

Side note: a smart listing agent would never allow his seller to sign anything other than an acceptance or rejection.

If I were the listing agent. I would lower the price 1% every week until for 23 weeks before I sold it 23%
from the offer. Remember they just lowered it 8.5%.

No offer is "laughable" if it is presented correctly.

Good Luck
Patrick
0 votes Thank Flag Link Sun Feb 10, 2008
Mr.P, Other/Just Looking in Arizona
MVP'08
I think what is most important is what the other properties are selling for and what the after repair value will be. If a house is listed at 600K and the buyer gets it for 500K when it was only worth 475K, it has the illusion of a deal but really is not. Similarily, a house might be listed at 600K, when it is worth 650K, and you get it for 575K, that is a good deal.

I tell my buyers lets look at what the after repair value and what the other ones are selling for versus the listing price. If the house is price right then you can look at the average differential (percentage of what the sales price is versus the listing price).

Also, see my website below for other helpful hints.

Good luck !
0 votes Thank Flag Link Sun Feb 10, 2008
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