Consider this: when the market was booming a few years back, were sellers worried about "insulting buyers " when they asked ever higher amounts? Why should you worry about that now? Its a zero sum game Lisa, and more money to him means less for you. Forget about 'insulting" him, its simply about a meeting of the minds, feelings notwithstanding, and if you two can't find a meeting of the minds- happy, sad, nuetral whatever- then move on.
Whether or not you are a first-time buyer, it can be difficult deciding what is a good offer to make when you find a house you like. I think you will find the following guidelines useful.
Before you make offers, you have to know your maximum financing amount/purchase price.
First things first: when making an offer, focus on what your monthly payment will be for the mortgage financing, including taxes and insurance. If that payment is within your means, then your Mortgage Banker will determine the maximum loan/purchase price for you based on all the factors of the monthly payment, your down payment and your mortgage qualifications.
Begin making an offer with the following standards:
1. WISH LIST. Does the home meet MOST of the requirements from your Dream-Home-Wish-List? The Dream Home exists only in our minds; it's NOT out there waiting for you to stumble across it one Saturday afternoon. But you can find the right home using your Wish List. When you find the home that meets most of your requirements from the wish list, then it's time to make an offer.
2. FORGET LIST PRICE. Based on your own research, shopping in your chosen area, select the price you're most comfortable with, regardless of list price/asking price. In other words, you'll find a home listed at $268,000, but you've seen at least a dozen other similarly constructed homes in the immediate area priced or sold at $235,000. What makes this home so special that it's priced $33,000 more than the average price? Remember, your Lender will appraise the home based on similar homes and those prices.
3. MAXIMUM OFFER. Never exceed the price based on your mortgage qualifications, no matter how much you LOVE the home. You have to be able to afford the payment for the next thirty years. That in-ground swimming pool you love isn't going to pay the mortgage for you!
4. OFFERS ARE NOT PERSONAL. An offering price can NEVER be misconstrued as an insult to the homeowner. This is business; you're not going to hurt anyone's feelings! Make the offer based on a price you're most comfortable with!
5. OPENING OFFER. NEVER open with your maximum offering price. Test the waters with your opening bid: you want to see if this Seller is a SERIOUS Seller who understands this is a BUYER'S MARKET. If there's no reaction to your offer---assuming the price you offered is within the reasonable range of current market prices---you may be wasting your time with this home/Seller. It might be time to move on to another home.
See my "Five Steps To Making An Offer" for the best way to negotiate on your home purchase.
With that said, it is perfectly reasonable to deduct the cost of repairs from the offer. If they are pricing it too high for the renovation level or condition of the property, your offer should reflect that. Is the home for sale by owner or represented by a broker? If the owner has a broker, you really should have one. And if it's directly with the owner, you both should be employing lawyers to negotiate for you.
My Name is Caesar Galindo Office manager, and Law Student at CUNY Law School.