Meredith
If you are working with a Buyer's agent you should ask him to do a market analysis for you on similar homes that have sold in the area in the past three months. Off the top of my head I would make an offer $15 K below the current asking price. This decision is based on the belief that we can really expect another 10%-15% drop in the price of hhomes.

Hi, Meredith. Your potential home is listed in a declining market.
Ask your realtor (who is representing your interests) for a market analysis on the home including all comparable sales within the last three months. Any sales beyond may be too high, but if the comparable sales go back six months or even a year that is okay. Just be sure the most recent sales are included in the analysis.
Use this range to guage the market value of the property and bid below that. The actual amount below is your decision. Discuss with your realtor the issues you believe need to be corrected (i.e. the paint and light fixtures) and get a rough estimate on replacement costs (including any labor for hiring contractors to do the work for you.) Deduct these costs from the actual market value and you have your highest bid.

The odds are in your favor in this market. If the seller declines your offer you can continue to look at other homes.

Whatever you decide good luck finding your new home!

You might want to reconsider buying at this time in an area where there are so many comparable homes for sale. Keep in mind if you pay, say 315,000 and the prices continue to go down over the next couple years that you may not even be able to sell even at the "low ball" price you paid. If you're in love with the house you may as well pay asking price but otherwise try taking somewhere around 8-10% off the price. That's a good place to start negotiating. I'm in eastern Pa and I can tell you that if someone really wants to sell at this time they are prepared for low offers.

Quote "$200K-340K - 63 comparable homes for sale within 5 miles - 9 with pools!!"

So, does that help me or hurt me?

Thanks for all of your answers. Since some of you brought up points, I'll try and give some more details. The owner paid 276K in 2003 and honestly, I feel like they haven't done a thing to it. All the carpets are beige and completely stained, the walls are all white and marked with dirty hand prints and scratches, all the light fixtures are the standard $20 home depot lights, the microwave and fireplace are dirty, there's even soap or vasellene spilled under the master sink which was never wiped up. The house is 2438 sq ft in the Nazareth school district. Thanks again for your ideas!

Meredith, I am only continuing this thread of the conversation because there are others out there who are not as far along in the process as you are who may learn from your experience.

Basically you used the agent that your bank paid you to use. That raised the profit for the bank, but the price you pay for that discount is the little edge of doubt that the agent may not have your best interest at heart.

There is nothing wrong with buying at discount. I recently bought a washer and dryer at a deep discount store! It seems to have turned out ok, but buying discount is a choice that can have some consequences.

(I wonder if the bank gave back any part of THEIR OWN fee??)

Again, .....just my opinion

Eileen's Green Team

Since the house has been on the market since May I would bid low...maybe 315k? The hope is they will accept or come back with a counter offer. I would assume they would be willing to negotiate to get the house sold.

We get a portion back of the money the bank takes from them at closing.

I hear your concern. This is just another reason to contact a Realtor first the next time. Sometimes, not always, but sometimes, the agents who take referals from banks and other "third party aggregaters" feel that they have to get the business any way they can. It could simply be that the market is slow, or it coud mean that they have not been in the business long enough to have built up their client base on their own.. When your bank told you they would refer you to a qualified agent, they probably failed to tell you that the way to qualify was to pay them... nothing more, other than having a license.

The fortunate thing is that most agents behave ethically even if they are not turning large numbers of sales yet. You should be able to trust them to do the right thing and submit any offer you wish to make. Don't be unreasonable about it. That's not to anybody's benefit. But you should not be afraid to make an offer based on the numbers you find on homes that have sold in the last couple of months in your area.

But tell me one thing? How has it benefited you that your bank took money from the Realtors who are doing the job for you. Sometimes the middle man adds value; sometimes not so much.

Just my opinion!
Eileen's Green Team

It's hard. We do have a realtor. They were recommended to us by a program with our bank. So we know that the commission is being split between the seller's realtor and them and then they need to give part of their half back to the bank for the referal. So, I feel like it's in their best interest to get us to bid more.

Full agreement. Start with a local Realtor. Get a CMA done for that home. Go from there. The Market Analysis paperwork for the home should backup your offer.

I know you must have heard this before, but it is so important that you contract with a local buyers agent and let them help you make these determinations. Only a good local Realtor will be able to give you the information you need to make this decision.
Otherwise, make what ever offer you want and wing it. Maybe the seller will take it! Maybe it will still not be the right price. You can't know without doing the local homework.

Eileen's Green Team