Quote: "I've owned 4 different homes and I never signed a contract that didn't have a contingency for the purhase price that goes something like "the selling price will equal the agreed price or the apprisal value whichever is lower". Not one realtor suggested the inclusion of a contingency in the contract for the price!!!"

That's because that verbiage is alread included in the financing contingency form, which is assumed to be included with the contract if this buyer is financing the property. No one is writing the full contract on this forum, just answering a specific question.

As for the price, if there are lots of offers coming in or you think it will sell quickly, then your concern is understandable. You set the price you offer, your Realtor is there to advise you. If you disagree, it's still your decision.

I've owned 4 different homes and I never signed a contract that didn't have a contingency for the purhase price that goes something like "the selling price will equal the agreed price or the apprisal value whichever is lower".

Not one realtor suggested the inclusion of a contingency in the contract for the price!!!

Hi Novice! I hope you have a contract on the home that you love by now.

What you are experiencing is common in this type of market. You are buying a home in a buyer's market (where the supply of homes is greater than the demand for homes) causing prices to decrease. When this market presents itself, buyers often feel they can low ball the seller to the point of being almost offensive with the offer.

Because you are buying in this market, you will be able to offer a lower price than a few years ago. The way to determine the price is based off of the comparables (most similiar homes in the area), as you mentioned you have already done. Did the realtor pull comps to achieve her $500k price?

I always suggest to a buyer to review the comparables then make an offer they are comfortable with. I ask them to rate how disappointed they would be if they lost the offer, and to keep that in consideration when coming up with the price to offer. Additionally, I ask them to think like the seller - can I justify my listing price?

It is important to keep in mind, if you are taking out a mortgage, you will be protected by the appraisal. The bank will not allow you to borrow more than the house is worth. This is your "out" should the house not appraise for the price you offered.

Finally, the amount of time on the market has a direct impact on the offer as well. A house on the market for 3 days may not warrant a low offer. A home on the market for 150 days may warrant a lower offer. If there is a way to learn the motivation of the seller - you can gain a basis for the offer as well.
I hope this helps and I wish you the best in your search!

Again, hopefully you are now under contract with the home you fell in love with!
Best,
Diane

Hi Confused...sorry about your confusion!!!

I am not sure what a "bias" against older homes is.......perhaps you mean you don't feel she has experience or a sense of the value of that style home.

I think that offereing 500,000 on a home listed at 650,000 will be an exercise in futlity no matter what! An offer that low might not even get a counter offer from the seller.

Certainly, you need to look through the comparable sales that the agent can supply.
Often, however, older homes are quite unique, so it may be hard to find reasonable comparisons.

If you love the home.....make the offer in the range you feel most comfortable..............see how the seller responds. As agents always love to say - the house is only worth what a buyer (that means YOU ! ) are willing to pay.

Remember, no matter what, the house will have to appraise out in order to get the mortgage.
Make your offer...try the number you feel is fair, and see what response you get.

By the way...........How long has the home been on the market?

In my opinion, if there is any chance the seller would consider anything in the 500,000 rane, they'd probably have dreduce it to at least the mid 500's.

Best wishes...let me know what happens!!
Debbie Rose
Prudential NJ Properties

ps I went to the Univ of MD - Go terps!!!

Request for her to support the comp's which is what an appraiser would use from MLS

OR

sales offer authored have buyer / seller agree sale property at appraised value HOWEVER not exceed your top price what you can qualify for and lender approval.

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
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Lynn911

Confused,

This is a time to be very clear on a realistic value for you home if trying to sell this property. It is commonly understood that homes priced above what the buyer feels is a "fair market value" normally sit on the market for extended periods of time and don't sell until reality sets in and the price is lowered to reflect the current market activity in the area for "like lomes."

An even bigger concern should be the fact that any buyer using a lender for a mortgage must have a bank appraisal done AND the property must appraise at or above the contract price. If this is not the case, buyers will not be granted financing and the deal will likely fall apart.

So, the time to face reality is now...if you are not comfortable with your agents view of the home's value it would be advisable to have an appraisal done by a licensed appraiser and base you sale price on those numbers.

Don't make the mistake of assigning an unrealistic value to the property.....Remember the single most important aspect of selling in the current RE market is "pricing the property correctly" from the beginning.

Best wishes,
The Eckler Team

The final answer here, is that the Realtor works for you. If you're concerned that you're going to lose the house, you should feel free to go A.R.A. (Against your Realtor's Advice).

She may have good reasons for offering a lower price... she may have some insights that you don't (although if she does she should share those with you)... but when push comes to shove... YOU are in charge of your offer...YOU get to decide what you'll offer, and she should simply give in to your wishes.

It's your money, and your purchase. Take control.

While you risk "insulting" the seller with a low ball offer, that would be less of a concern to me than over paying for a home. Offer where you feel comfortable. You may want to write a brief and courteous note to accompany your offer that indicates that your price was chosen based on current market conditions and not the condition/presentation of the home. I am amazed at the number of "lowball" offers that are sailing through and being accepted. $150k is a lot to ask, but even if they came back and split the difference with you ($575k) you'd be on solid ground. Best of luck. p.s. What may appear to be an agent "bias" may actually be the voice of reason. Assuming you are working with an experienced agent.

You seem to be a bit worried about losing the house you really like. Older homes are great if they have been well maintained. They provide charm and history that is not found in newer homes. You will want to have a home inspection to alert you to any problems with the home. The house will also have to appraise at the sales price or better so make sure your offer is close to what the really good comps say. If you are unhappy with your agent you have the right to discontinue that relationship and hire another Realtor. I would be happy to help you at any time. I hope this helps and good luck.

The above are all great suggestions. However, you might clear up the issue with your financial institutions appraiser. Not that the seller would be bound by the result.

You have a few options:
1. If you like the house, offer an amount you are comfortable spending. If you are fortunate enough to have your offer accepted, what does it matter how your agent feels about it?

2. You can ask a different agent to represent you if you are unhappy with your current agent.

3. You can submit a lower offer, and see what the seller's position is. You might just save some money!

Regardless of your decision on price, have a Home Inspection to better understand the home and all it's authentic issues!