In this market, I recommend getting a buyer agent and letting them know what you would like to spend, then have them suggest listings based on comps, and make your offer accordingly. There are many overpriced houses out there, you will probably make offers only to find the house is taken off the market, or the seller will not counter, but don't limit your search by listing price solely. And don't be afraid of offending anyone.

Sat May 3 2008, 19:02

A reasonable offer is whatever the home is worth to you. Many times a homeowner needs to see an offer to realize they are way out of the ballpark in terms of what they think the home is worth. The worst they can say is no. If they are not willing to be reasonable, move on to someone who is.

Sat May 3 2008, 18:15

First, determine a reasonable offer by starting with a CMA (comparable market analysis), which a Realtor can provide. Sure, some houses may be overpriced. That's why you need to know the comps. Then you can adjust the comps based on the condition of the house you're looking at.

Second, don't worry about offending the sellers. Gee, I get tired of that sentiment. Worry about yourself. Worry about whether you can afford a house. Worry about whether you'll like the house. Worry about interest rates. There are plenty of things that affect you that you can legitimately worry about. But don't worry about offending the sellers. If their house is overpriced, did they worry about you? No way!

Of course you're better off being upfront regarding what works for you. Now, when you're negotiating, you don't want to reveal your cards. Maybe, for instance, you can afford to pay $300,000 for a house. But the comps, adjusted by the repairs you think the house needs, suggest that the house isn't worth more than $270,000. In that case, no, don't reveal that you can afford to pay $300,000. Make an offer for $270,000 or less. And if you're prequalified, and want to present a prequal letter, have your mortgage broker prepare various letters with different amounts up to the full amount you're prequalified for. So you like a house priced at $270,000 and you want to offer $260,000. You make sure your Realtor includes the $260,000 prequal letter.

Older roofs and older kitchens have no negotiating power. You have the power to take the deficiencies in the house and use them in your negotiations. Some people do, some don't. It's up to you and your agent to maximize your negotiating position. Not just older roofs and kitchens...and baths, etc. But cracks in the driveway. Loose bricks in the patio. And so on.

Hope that helps.

Sat May 3 2008, 15:24