Home Buying in 54115>Question Details

Firsttimehom…, Home Buyer in 54115

Just looking for some advice from people other than my family! There is a home I am interested in making an offer on (it is an estate sale). They

Asked by Firsttimehomebuyer, 54115 Sat Apr 10, 2010

Just looking for some advice from people other than my family! There is a home I am interested in making an offer on (it is an estate sale). The sellers are asking $129,000, fair market value is $119,000. In the current market, how low can I offer? Thanks for any advice!

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Marita Topmiller’s answer

Don't trust national internet market stats. They don't know a good block from
a bad block. There are LOTS of neighborhoods within a single zip code and
those neighborhoods vary widely in price. Tax assessments don't tell you
market value.

Get an agent. The agent will not cost you a dime.
Make sure your offer contains an appraisal contingency - if the home doesn't appraise for sale price,
you can walk away with your earnest money and look for another - unless of course, the seller drops
the price.

Safety? Check with the local police or look at police call reports for the area online. Google the police department. Do it before you submit an offer.

How low? Start with the Trulia number you came up with. When you present your offer, tell them where the
number came from.
A Realtor understands all these things already. Get one to work for you.

Good Luck,

Assoc Broker
Indianapolis area
0 votes Thank Flag Link Sun Apr 11, 2010
I'm not sure I would trust Trulia stats, in all honesty.
Go with what is exacty going on in the neighborhood you are interested in.
All home sales are public record.
0 votes Thank Flag Link Sat Apr 10, 2010
Thank you Joan!
If the information on Trulia for the average list price and sale price is a fair representation, very eye opening! Average list price of the zip code I'm looking to buy in is $107,000 and the median sale price is $104,000 (can't find the average sale price). Hmmmm...
0 votes Thank Flag Link Sat Apr 10, 2010
Like Joan says. You don't have "fair market value" until a willing buyer and willing seller meet in an arms-length transaction. Before that, you have speculation, supposition, and a whole lot of other things!

Anyway. You can offer zero; they are only agreeing to sell it at $129,000, and everything else is simply balancing your sense of risk vs reward, which is beyond our ability to determine on your behalf.
0 votes Thank Flag Link Sat Apr 10, 2010
Fair market value is NOT assessed value.
Fair market value is what buyers are willing to pay for homes comparable to the one you are interested in.
Also, it may help to find out not only how many days the home has been on the market for, but how long the average house sold has been on the market for in the neighborhood you are interested in as well as the average sold price vs list price.
From this you should get a pretty good idea how houses have done in that location you are interested in.
Obviously, an agent from your area would be able to help you with this since I have no clue about your market.
I wish you luck!
0 votes Thank Flag Link Sat Apr 10, 2010
Thank you Polly! I'm working on gathering as much information as I can...I never realized what a stressful time home-buying could be! It's alot of fun too, though.
I'll work on finding the list to sale ratio. I'm not sure when the home was assessed. I recieved a list of all the recent updates, and it is quite extensive. Nearly everything except the electrical and plumbing has been updated since 1997.
0 votes Thank Flag Link Sat Apr 10, 2010
The fair market value was taken from the property tax record. No major repairs needed, move in ready. I believe there are 4 people splitting the proceeds of the sale. I am not aware if there are any debts or liens.
I love the home itself! My concern is this...I used to live a block and a half away from this home (same street) and the neighborhood was not great as far as safety and upkeep. The block this home is on seems much better, but I'm still worried a bit. I'm concerned about resale value with the neighbooring areas being somewhat questionable.
Thanks for your quick response by the way! :)
0 votes Thank Flag Link Sat Apr 10, 2010
Firsttimehomebuyer - There are a few things to consider:
1) Fair market value is misleading. This is based on an assessment done at some time plus a computer generated growth. When was the house assessed? Has work been done recently both permitted and not permitted?
2) An estate sale could mean they need to sell the house quickly to settle the estate, or the family has the luxury to hold out for their price.
3) Find out what the average list to sale ratio is in "the current market." Also research the sold price of similar homes. That will give you a fair idea of what to offer.
Don't assume the market and the reason for sale will provide you with a steal. I fear you will be disappointed if you don't do your homework first.

Polly Briley
RE/MAX On The Water
0 votes Thank Flag Link Sat Apr 10, 2010
So, by fair market value do you mean what recent comparables have actually sold for?
How long has the house been on the market?
What is the shape of the home? Does it require any major repair, or just cometic or is it move-in ready?
Do you know how many people will be splitting the proceeds of the sale? Is there any debt, liens that need to be paid off? Financial obligations may affect the ability to negotiate.

As you can see, there are a lot of things to consider, but what it comes down to is what is it worth to you? Get as many facts together as you can and make an educated decision. Just make sure you do it with your eyes wide open.
0 votes Thank Flag Link Sat Apr 10, 2010
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