Home Buying in 43558>Question Details

Sara, Other/Just Looking in Swanton, OH

How do I determine the lowest price to offer for an old home listed at $121,500 without offending the seller?

Asked by Sara, Swanton, OH Thu Jan 17, 2008

I really love this house, but it needs some updates. I think the asking price is on the high side at $121,500. The garage needs a new foundation and the house itself is almost 100 years old. I really do not want to pay over $699/mo and have very little in the way of a down payment.

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9
OH--and have your buyer Realtor help you to determine.
2 votes Thank Flag Link Fri Jan 18, 2008
Well, first off, there's no telling what will or will not offend the seller. Some might be offended at an offer $1 below what they're asking; others might not be offended at an offer 20% lower. Other experts on this site suggest that you can minimize the offense potential if your offer is accompanied by comps and an explanation of why you're offering what you are. That's certainly good advice. Still, my focus is not on offending or not offending the seller, but rather on what meets your needs and wants.

First, determine what the house is worth. Have your Realtor do a CMA. Considering the age and nature of the house, that may be difficult, but a good agent should be able to tell you, within a reasonable range, what the house should be worth. OK, that sets your cap. You're not going to overpay for the house.

Second, you have to consider your own finances. Even if the house is an absolute bargain at, say, $120,000, could you afford whatever the mortgage would be--roughly $750, plus taxes, insurance, maintenance, etc? And you say you have very little in down payment. Don't misunderstand; there are ways to buy the house. But is it something you can afford today, and afford tomorrow.

That leads to your consulting with a good mortgage broker to determine what you can afford and what you can qualify for. Find out what, mathematically, you can qualify for. Then figure out whether that works for you.

Then work backwards from your comfort level. If the most you're willing to pay per month is $699, and you have very little (oh, say, $5,000) for a down payment, then work with your mortgage broker and with your Realtor to determine the most you could afford to pay for the property. You take the Realtor's CMA...you take the second number (the most you can comfortably spend)...take the lower of the two...and that's the maximum you can spend.

So now that you've established the maximum, you should leave yourself some negotiating room. There are different strategies on this, of course. Say your magic number is $115,000...the lower of the CMA and what you can comfortably afford. Maybe you come in real close to that with as strong an offer as possible, with your agent conveying to the seller that this is it...take it or leave it. Another strategy relies on the old American "split the difference" fair play approach. It's priced at $121,500; your maximum is $115,000. So you offer $109,000. The seller counters by "splitting the difference" at $115,000. Voila! There you go.

But please, please, please don't worry about offending the seller. This is your purchase. Your neck is on the line. This will possibly be your home. You're the one who's going to be making the mortgage payments. This purchase has to work for you.

Hope that helps.
2 votes Thank Flag Link Thu Jan 17, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
I was in the same position a couple years back too! I personally love older homes for character (ie. hardwood details, layout), but that's just me. You might be suprised that you won't offend them, because right now most people are looking at any offer. If you think it is a nice starter home and you know you can make it your own, make a reasonable offer. I am sure they will be happy to hear anything. GOOD LUCK!
1 vote Thank Flag Link Thu Jan 31, 2008
Offer what you want as most sellers get offended by every offer, even full price. Yes, they think they should have asked for more.
1 vote Thank Flag Link Thu Jan 17, 2008
Offer what it is worth to you. Why would that offend? If it does not work for them, thewwy say no.
1 vote Thank Flag Link Thu Jan 17, 2008
Sara, Don's answer is right on but something else to consider is how long the house has been on the market and the motivation of the seller. If the house is vacant and the seller has moved on to another home, then his motivation to sell may be high and will entertain any offer. As a Realtor, I would also find out what the ratio of asking to selling price is in that area. I would advise an offer of at least 90% of the asking price if the 121,500 is an adequate market price. In our area homes are selling at an average about 96% of their asking price. You will also need to take into consideration the repairs that may have to be made, especially on the foundation. Make sure your offer is contigent on your approval of the inspection report.
Web Reference: http://www.marystarkey.com
1 vote Thank Flag Link Thu Jan 17, 2008
give me a call and I will assist
0 votes Thank Flag Link Wed Apr 10, 2013
Hi Sara,
You are looking in a market where there is not a lot of homes available in this price range so keep that in mind, either it actually is priced too high, or your going to have some competition, in which case you'll want to make your highest and best offer, the first time. A Realtor can help you more than you know in this process looking out for your best interests. Remember, a buyer pays nothing to a Realtor to help them look for and facilitate the offering process when buying a home. That said the first thing you should be doing is getting pre-qualified with a Lender to give you an idea what your are realtistcally able to negotiate. Then I would suggest going to the Auditors website to check the sales history on this home, if there is some history available and get an idea of how much they may be able to negotiate (you can find this info at http://www.fultoncountyoh.com/elected_officials/auditor/audi…). Also remember a local Realtor has seen whats out there and can tell you if this home is indeed overpriced.

Best Wishes
Dawn Ronski, Realtor (419.388.1891)
Oak Valley Realtors
Swanton, Ohio
0 votes Thank Flag Link Mon Feb 11, 2008
Oh, and to respond to Perry. That is simply not true! He/She should know that in this market. It also depends on the location you are looking at.
0 votes Thank Flag Link Thu Jan 31, 2008
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