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Desafiyyah, Home Buyer in Point Breeze, Philad...

I offered $130 6% seller assist on house listed for $140. Their counter offer was $145 6%. Is this normal? and is it a good deal?

Asked by Desafiyyah, Point Breeze, Philadelphia, PA Fri Mar 26, 2010

I offered $130 6% seller assist on house listed for $140. Their counter offer was $145 6%. Is this normal? and is it a good deal? Its in the 19146 zip code.

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Hi Desafiyyah,
As we both know, South Philadelphia home values can be very different block to block. If the list was $140K, then it will be very hard to get the higher sales price past the mortgage underwriter. However, why isn't your Buyer's Agent re-negotiating the offer? You can counter by saying, "Okay, Let's split the differnce down the middle. $145 - $130 is a difference of $15K. We'll split it." So your offer goes up to $137.5K with a 6% Seler Assist. If you have to, you go up to $140K (full price) but you want 6% Seller Assist at closing.

It is hard to say if it is a good deal or not without knowing the specifics. Keep in mind that it is a BUYER'S MARKET right now. Buyers want to buy in time for the $8K tax credit and Sellers know that this is their best chance of selling, NOW before the April 30th deadline. There are plenty of good deals and even some great deals out there. Go shopping again. If you really get the vibe that this house is THE ONE, then you go back and get the deal done. You should keep in mind that a few thousand dollars difference in price will have a really small effect on your monthly mortgage payment amount. Ask your mortgage person for the specific changes in real dollars.

Good luck with everything. Please feel free to contact me if you need further assistance.

All the best,
Larry B. Lichtman
REALTOR, Property Manager
Your Real Estate Resource For Life
Direct Cell (267) 254-7994
2 votes Thank Flag Link Tue Mar 30, 2010
If the property was listed for $140,000, and the sale price was inflated to $145,000 to include a seller credit, in all likelihood you are probably going to have a problem with the appraised value on both a conventional and an FHA loan.
1 vote Thank Flag Link Fri Mar 26, 2010
Hello, Desafiyyah,

What are the comparable sales showing? Your buyer agent should have reviewed that with you before you made your offer. The offer that you made is only for about $121,000 to the seller. Did you realize that? The seller deserves fair market value, then you can add on the concessions. It's the only fair way to go. If you want to know about values in that neighborhood, just go to http://www.carolworks4you.com and get a free market snapshot sent to your email address.

Carol Cei
ReMax Millennium
Web Reference: http://www.carolcei.com
1 vote Thank Flag Link Fri Mar 26, 2010
Your agent will be best able to advise you on whether the net price to seller of $136,300 is a fair market price. The seller is responding by building in the seller assist - in my opinion every step of the price negotiation provides helpful feedback and clues. If this home is priced very well at its asking price, then this may be very fair. This response would suggest to me that the seller does not see much room.

One word of caution, seller assist essentially inflates the price and in so doing stresses the appraisal - let's assume for a minute that this is a very fair deal at $145,000 with a 6% seller assist. The home must appraise for the $145,000, though the seller's net is $136,300. If the value is there to appraise at $145,000, then you should be good, if not your deal may run in to a bump.

Work through this pricing question with your agent.

Good luck,
Jeanne Feenck
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Fri Mar 26, 2010
One of the fundamentals of real estate is that no two properties are alike.

With that in mind, we cannot address whether you're getting a good deal or not. Consider this: in the hottest of markets, when there'd be five, ten, twenty offers on a property - there'd be an equal number, or more, who thought, Nah, it ain't worth it. Opinions are ubiquitous.

Your negotiation is not abnormal, and there's no "right" way to go about this. You should determine your walk-away price, and negotiate accordingly.
0 votes Thank Flag Link Tue Mar 30, 2010
Desafiyyah, hello.

The answers below are all valuable, but I don't recognize these folks from our neighborhood!

Yes: your agent should have discussed these questions with you. I'm sure that he or she is still willing to do so. Please ask him or her to show you (and explain) the six most recent comparable FHA sales. Not all sales, FHA sales. This will really clarify why your offer is structured the way it is.

Good luck with your purchase, I hope you have a very smooth transaction!

Hannah Angert
Realtor Associate
215. 271. 3000 office
215.869.9571 cell

William Festa Realty
3001 S. Sydenham St.
Philadelphia, PA 19145
0 votes Thank Flag Link Fri Mar 26, 2010
They said we do not bargain. If you add what you want back on top we will add to our price.

If you had given a real offer without asking for money back they may have bargained more.
0 votes Thank Flag Link Fri Mar 26, 2010
When I see questions like this, I have to ask, where is your buyer agent in all of this? This is a question that your agent should have answered when you submitted your offer. This is why your agent gets paid.

To answer your question, when a buyer wants something such as money to assist with their closing costs, you have to ask yourself, why would a seller just want to give you money? Well, they don't want to give you money but generally what happens is to get the seller to help you with your closing costs, you must offer more than what the seller is asking. See, to get something, you have to give something only now the home must appraise for the higher price and that could kill your deal if the home isn't worth the higher amount.

You should have just went in at the higher offer to start with and your Realtor should have explained this to you.

Renee Porsia
Associate Broker
(215) 669-0589 Direct
(215) 358-1100 Office ask for Renee
0 votes Thank Flag Link Fri Mar 26, 2010
Yes, what Bob has said is true, FHA is changing from 6% to 3% on April 7th, I believe. The appraised value could really be an issue as well. The seller is not doing this out of the goodness of their heart, they are doing it to help you out, because it is really playing with the numbers to give you a lower amount for funds needed to close.
0 votes Thank Flag Link Fri Mar 26, 2010
good afternoon.....yes, it is very common...both comments below are good ones....the seller is trying to tell you they want/need close to asking price but they are also trying to accomodate your financing needs....i would also try to nail down a bottomlined p.a...a.s.a.p...since the homebuyer credit (assuming you qualify for it) is going away, and fha is changing their allowable seller concessions....hope that helps...bob mcclure- first preferred mortgage- southfield, michigan.....
0 votes Thank Flag Link Fri Mar 26, 2010
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