JP you are going to struggle finding a house in that price range with an FHA loan. You need to be prepared for making a lot of offers and losing homes. Homes in that price range are just moving.

An offer of $120 on a home priced at $130 is not an offensive offer. I agree with the others that you really need an agent working for you on this. Your task will be difficult and if an REO comes up in your price range you'll want to have an agent jump on those for you.

About 15 years ago, one of my buyers suggested that she write a nice, heartfelt letter to the elderly owner explaining how much she loved the house (Sellers husband had personally built it 40 years earlier) and wanted to care for it and have children and raise her family there.

The situation was the same as yours. they qualified for about $72,000 and the house was correctly listed for $78,000.

My broker and I approved her idea. She and her husband got the house, along with lender required repairs. (FHA can be tough on that) later had 3 kids and eventually outgrew it after about 10 years.

I think the old lady balanced common sense ( a solid qualified buyer, that was sure to close escrow at a small discount to value) with emotion (she knew she was not getting her last dollar of money value, but she could feel good about passing the house on to someone who would treat it (and her neighbors ) decently.

Carol's answer is dead on. For example, our list to sell percentage has been dropping in Salem. We used to be 97%, now we range from 86.7 to 92.7 depending on the area. This means there is more room for negotiations and you can be in the drivers seat. Unfortunately, there is no "standard" when making offers, especially in this market. Your agent should do their homework and research the current (no more than 3 mths old) solds to help ensure the offer fits the market in regards to appraisals. Hope this helps.

Have your buyers agent look for terms like motivated seller, must sell, bring all offers, reasonable offers considered. If a buyer can afford 120k I search no higher than 125k basically because my area sells at 97% list price to sale price, However, if there are homes that state above, that is another story. Have them find the ones that must sell, relocated etc. Then see if you like one of those. Next check the comps, equity, and make an offer based on information. You don't want to look at a home for instance that is 140k when you can afford 120k. That is a long shot and possible a waist of everyone's time. hope ths helps

Hi JP: Are you working with an agent? If so the agent can search sold's from the area multiple listing service & this will give you a guide to your offer.

An appraiser does not use list price, they use comparable of sold's.

Evelyn Murray
Evelyn H Murray Realty
Barefoot Bay, FL

Talk to the Listing Realtor first. Sometime they will tell you if they have already rejected low offers, or you can get an idea if you'll have a chance or not.