yes, buy my house I will accept 330,000 with closing 16000. I have a bi level which I am selling for $335,000.
just put in a new furnace 8-2008. move in condition

Hi Marcia,
I would definately check with your real estate agent and let them guide you on what to bid. That is what they are there for.

As far as your actual question... I agree with the others that 16,000 seems really high to ask for closing costs. It is hard to answer your question because I don't know which program you qualify for or have been pre-approved for. It all depends on the program too and what the percentage they will allow you up to.

When you gave your examples you said the comps are.... do you mean the SOLD homes? Appraisers will usually use SOLD homes in the neighborhood - not ones currently for sale because a home could be listed at a certain amount and not sell for that same amount. With the 2 examples you gave if you have the SOLD comps then the sellers seem to be priced right to sell by being either UNDER appraised value or right in the middle. Most sellers wouldn't want to sell for a large amount under what the home is comp'd/appraised for unless they have some sort of motivation to do so.

As far as the appraisal not coming in for the asking price - always make sure you have somewhere in the contract that the home must appraise or both parties would have to agree to continue at the reduced price or you have the option to not go forward with the sale.

Hope that helps!

Take care!
Angela "Angie" Allchin
Century 21 Rauh & Johns
856-582-0366 x 172

Hi Marcia,

The homes that you have an interest in seem to be well priced. Without seeing the homes, it is hard for anyone to comment on your offer but coming in so low and then asking for $16,000 does seem unrealistic. Your agent should be able to answer all of these questions for you. You might get lucky and find a destressed seller but most of my sellers will reduce their property before they would consider accepting a very low offer.

Regarding the appraisal issue, you can always insert language that says that the home must appraise. All FHA and VA financing must appraise. The Seller will either accept your request and initial the change on the contract or not.

Good luck,

Rosanne Gentile
Broker - Sales Associate
Weichert, Realtors - Moorestown
856 235-1950 x 140
609 680-8490 cell

Marcia:
I don’t mind answering a random question or three but I wonder if you are not straining the good heartedness of the Real Estate industry. Your questions are so basic that I can’t believe that you have an agent, or if you do, that you trust a word they tell you. Actually, the ONLY thing a Realtor can offer is help in finding and negotiating a sale. This includes providing comparables, estimating closing costs and handling offers and counter offers. That’s just what they do. You are asking how to do all that and further, in a black box, as far as any realtor knowing anything about your ability to pay, the actual area in which you are looking, or the home that has attracted your attention. If you are looking at new construction, perhaps the seller will not cooperate with Realtors and pay a commission for the sale. (Rare among larger constructors in this market) If that’s the case, why not pay a commission on your own? Your concern about the future value of the property would be more than enough to cover a commission. (In NORMAL times, home appreciate at 4.5 5% a year!)

Finally, as I say over and over, your fundamental goal should be housing. If you want to invest, try the stock market or, in real estate, try a very modest low priced beginning. The people who make big bucks in this sort of investing usually know more than the average realtor, who has little experience with the cost of maintenance, landlord tenant relations, interest rates and funding sources for larger commercail applications, etc. (Although commercial realtors are good at big commercial deals, they do not usually get deeply involved in $300,000 efforts. Half of those size deals are done by residential offices, who, of course handle a families purchase of housing more often than the speculator’s needs.)

Hi Marcia, prior responses are sound - an agent who knows your local market well will best be able to assist you. My advice, find a good one you trust and listen to them.

As to evaluating an offer price, comps of current active listings provide only part of the picture. You need to include comparables of prior sales and properties that are currently under contract in order to estabish the trend that then can be applied to the active comparables. A sound pricing analysis is critical to answer the question you have asked and your agent can provide that analysis.

In terms of closing costs, I agree that the $16,000 sounds high on a mid $300K purchase. In our area, a closing cost concession cannot exceed actual closing costs and so it is generally written "...up to $x". I think your number is way too high.

Another important point - the closing cost concession reduces the net to the seller but at the same time inflates the purchase price which can strain the appraisal process, and you've already experienced first hand the possibility of an appraisal coming up short to purchase price. For the seller to be receptive to your offer he/she would have to believe that your offer price less the concession reflects a fair market value, right? And if that is the case, then it is far more likely that the appraisal will reflect a number closer to the market value than the inflated purchase price you suggest.

Short answer - talk to your agent and your mortgage professional - together they can advice you on pricing and closing costs.

Good luck and best,
Jeannie Feenick
Search and connect at http://www.feenick.com

I have to agree with the other responses...you agent should advise you on what to offer. I would only say asking a seller to pay $16,000 is alot.

When an appraisal comes in at less than the contract price, you have several choices. Walk away, put up the difference or ask the sellers to put up all or part of the difference between the contract price and the appraised price.

Hello Marcia,

I actually showed some homes in Mt Laurel today. Are you working with a buyer's agent? If so your agent should be able to provide you with all the info you need. Although you have provided some basic info it would be very unprofessional of anyone to tell you how you should place your offer having not seen the home and not knowing what comps you are you using. If you would like some assistance feel free to call me on my cell 609-876-5817. Purchasing a home is one of the most important financial decisions you can ever make. You should be sure that getting the most value for earned dollar in today's market. This should not be left to chance.

Marcia,
Have you asked your agent to help you through this? That's what they're there for! Offer what the house is worth to you. Of course anything less than asking is a risk, but the worst that can happen is the Seller will say no. Then you can move on and know you've tried.