James Coe, Home Buyer in Largo, MD

What are the ins and outs of purchasing a home in full? how likely can you make a $300,000 less offer on a $900,000 home?

Asked by James Coe, Largo, MD Tue Mar 5, 2013

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Dear James,
You ask a good question. I use statistics and knowledge of an area before writing any offers with buyers. The stats will show you what the Average Sold to Original List Price is for that area. In your scenario, you're suggesting homes are selling 30% less than asking price, which I can tell you they aren't. I am a 5 star agent with a background in mortgage and I have worked for our local MLS in their real estate data department. I'd love to speak with you further about the area and your reasons for offering such a low price on a home of that price. At times, homes are overpriced but that occurs less often than more. To answer your question more candidly, yes you can offer $300,000 less, but is your objective to write offers, or buy a house? Let's talk facts and data.
Regards,
Ariana Loucas RE/MAX 5 Star Multi Million Dollar Agent
1 vote Thank Flag Link Wed Mar 6, 2013
Purchasing a home for 1/3rd of asking price is considered frivolous and you risk ticking off the seller. If you want the property you should write an offer close to market value. A real estate professional can assist you with valuation.

As for paying all cash vs financing it is two fold. The first is the ease of the transaction and getting your offer accepted over financed offers. The other is leveraging and any tax advantages. You will want to discuss this with your tax advisor.
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Tue Mar 5, 2013
Thank you for answering back so quickly,I believe the market value of the property is $725,000 and has been on the market for over 495days.I will take all your advise going into this decision.
Flag Tue Mar 5, 2013
Dear James,
You really do need to enlist the help of an excellent "buyer agent" to help you. Each property is different, and the motivation of the seller is also different. My general opinion however, is that the market is changing and you will have little to no success with the "low ball"strategy.
I have actually seen sellers throw offers in the trash that were annoying or insulting to them..so, buyer beware.
0 votes Thank Flag Link Wed Mar 6, 2013
Possible, but not too likely.

As others say, it depends on the seller's motivation. How eager/desperate is he to sell?

Another point: Know what the house is actually worth. Just because it's priced at $900,000 doesn't mean that's what you or anyone else should pay. OK, it's probably not worth just $600,000. But it might only be worth $800,000, in which case your offer--while still low--is a lot more reasonable.

Getting back to motivation, cash isn't always king. Sometimes yes, sometimes no. But let's say the seller owes $800,000 on the property. Whether you finance the purchase or pay all cash, the seller is still looking at losing over $200,000. Even with cash, the seller may not be able to do that. Buying with all cash is just telling the seller: "This deal won't fall through because of financing." That's all it says.

There are also ways to structure your deal to make a low offer more appealing. Your Realtor can advise you on those.

So: Determine the real value. Figure out a strategy to make your offer as appealing as possible. Then make it. There are three possible outcomes: (1) The buyer accepts. (2) The buyer counters and you can negotiate. (3) The buyer rejects the offer. And if it's rejected, either move on or make another offer.

But make the offer. You might not get it by offering 33% under the listing price. But you can be 100% sure that you'll never get it if you don't make the offer.

Hope that helps.
0 votes Thank Flag Link Wed Mar 6, 2013
Thank you for your answer it really helped,The home has been on and off the market for over 400days I have found out that the home has been estimated at a value price of $775,999 but that is a guesstimate.
Thank you again your answer was very informative.
Flag Wed Mar 6, 2013
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Hello James,

I would like to send you a book that will explain the details of purchasing a home and getting your new set of keys.

Please call me on 202 573-6035 and I will get a copy into your hands asap.

Looking forward to educating you on the home buying process.

Sincerely,

Catherine Purcell
Senior Mortgage Loan Officer
Fairway Independent Mortgage Corporation
Cell 202 573-6035
catherinep@fairwaymc.com

Over 25 years of Real Estate and Mortgage experience
focused on educating my clients so you can make an informed decision that best suits your needs!

MLO# 194172 FIMC NMLS# 2289
0 votes Thank Flag Link Wed Mar 6, 2013
Hello James ,

You can make any offer you choose to. You will always get a better deal with cash. A few things to consider would be: what are the days on the market? What is the condition of the property? Is the seller motivated? The one scenario that would preclude you from a good deal is if this home is a short sale or the mortgage payoff is close to what the sales price is. A lot of sellers are pricing their home based on what they owe and thus trying to avoid a short sale but in reality the home really should be listed as a short sale. Just trying to cover all possible scenarios. Hopefully you have other real estate to maintain tax advantages if you pay cash for this home. If you need further assistance do not hesitate to call. Hope this helps. 301-440-1489 or parkerteam4@aol.com.
0 votes Thank Flag Link Wed Mar 6, 2013
Hi James,


Cash is king! The only thing a seller can say is no or counter. If you need some comparable sales in the neighborhood before you make a final decision. let me know.
0 votes Thank Flag Link Tue Mar 5, 2013
James-

Are you curently working with a buyer's agent or ABR? I am an accreditted buyer representative and have the buyer's needs and goals in mind at all times! Call or email me to discuss the possibility of buying a specific home for less than list price!

Kathy Hutchins ABR GRI CDPE SFR
Broker/Owner
Hutchins Property Management
301-785-1995
khutchins@realtor.com
0 votes Thank Flag Link Tue Mar 5, 2013
Sounds like you need a real estate agent to assess your specific situation and home. Sellers will usually negotiate if the house is priced on the high side of the market.
0 votes Thank Flag Link Tue Mar 5, 2013
If you want to DEFEND your position of making a low offer, be sure to support your position by market data which supports your offer price. Handle an emotional purchase decision (offer price) supported by facts. ( market data)

Greg Myers
RE/MAX Realty Group
0 votes Thank Flag Link Tue Mar 5, 2013
The market value on the home is $725,000. Thanks for your answer
Flag Tue Mar 5, 2013
Hi James, asking prices are just that, It is what the seller may be hoping to get and may not be based upon the actual market value. Please give me a call to discuss your plans in more detail. I am very familiar with the Fort Washington area, and would be happy to help you determine a reasonable offer on the homes you have interest in.
0 votes Thank Flag Link Tue Mar 5, 2013
From what I understand about the home it as been on the market for over 400days and is at $725,000 value. Thank you for your answer.
Flag Tue Mar 5, 2013
When you get to $1M, you might have a hard time finding good Comp's:
It becomes more a matter of what the Seller and Buyer can agree upon.
0 votes Thank Flag Link Tue Mar 5, 2013
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