Home Buying in Pittsburgh>Question Details

Beth Anne, Home Buyer in Pennsylvania

How much do I offer for my first bid?

Asked by Beth Anne, Pennsylvania Wed Feb 6, 2008

I am looking at buying my first home in a development. The seller is asking $105 but recent properties have been selling in the high 80's and low 90's. Sellers of other townhomes in the development are asking from $117 to $129. Our agent wants us to go in at $92,5 but I really feel that is too high. Please help with guidelines on making a bid.

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6
Elvis,

It's okay to let consumers know and understand that not all agents are going to be strong on their behalf - and it's okay that they know and understand they have options.

sorry elvis, I didn't see any word like, or even close to yours .. thats exactly why consumers like the idea of options.
1 vote Thank Flag Link Wed Feb 6, 2008
" ..but recent properties have been selling in the high 80's and low 90's .."


Anne,

Anyone can "ask" anything they want ... it's the "getting" part thats tough.

If you're comparing apples to apples (extras to extras) at the high 80's and low 90's, then you need to be coming in at the low to mid $80's, preferably the low low $80's.

See, the problem with most agents is very simple ... your emotions are way up, you're excited and the agent wants an easy deal and you're easier to negotiate with than the sellers agent or the seller, they love that scenario -- the problem is, it doesn't help you one little bit.

If you've truly done your homework and you feel your figures are correct, then you need a figure to arrive at, not a figure to reach past, and that just takes a little negotiating ..... don't be timid, give your agent the figure "You" feel comfortable with, not what "They" feel comfortable with ...

If the sellers agent is worth anything they'll come back with a counter and thats when the real negotiations really start ...

Hmm, let's see -- it's winter, aah you live in Pittsburgh, it's dark and cold and you probably won't see spring til' May, the seller is going uphill for the next 4 months.

If you feel uncomfortable with whats going on, get the agents together with the seller and you negotiate your own deal with everyone present - I've done it many times and saved tons.! .. most agents aren't very strong when it comes to face to face or any real "table time".

Good luck, and you can do this.!
1 vote Thank Flag Link Wed Feb 6, 2008
There is no rule about what to offer. If you want the house, you should put your strongest offer forward. Research recent sale prices for COMPARABLE houses...not just the same size, but same condition, location and inclusions.
$92,500 is 88% of the asking price....what does this mean? Well, some agents say that houses tend to sell within 95-100% of asking price within the first month, then down to about 90-95% after 60-90 days or more.
Ultimately, it comes down to how much you want the house because if you love it and want it more than anything, chances are somebody else will too and while you try to "play the game"... they'll buy it....
1 vote Thank Flag Link Wed Feb 6, 2008
[ It's okay to let consumers know and understand that not all agents are going to be strong on their behalf ]

I think there's a difference between letting consumers know that not all agents are strong negotiators (arguably true) , and "most agents are incompetent, bordering on working against you" which is what you suggest when you tell them that as YOUR buyer's agent they're more likely to try to negotiate with YOU 'cause you're an easy target, rather than take on the harder task of negotiating with the seller or seller's agent.
0 votes Thank Flag Link Wed Feb 6, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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Tman

Your advice, minus the "most agents are out to hurt you" and "most agents aren't very strong at negotiations" is pretty good. I don't know why you feel it necessary to continue to throw in your "real estate agents stink" rhetoric... it really detracts from your otherwise excellent message.

Anne

If other town homes in the development (truly comparable ones) are selling (very recently... less than 90 days) for the high 80s and low 90's, then you know what your goal should be. No more than the low 90's. If you begin negotiating at $92,500.00 then you're likely going to exceed the number you're comfortable with.

But be sure that the other town homes are true comps.. similar location... similar upgrades... similar square footage... in other words, similar desirability.

Go with your gut... you're in charge of your offer, not your agent. He's just there to assist you in the details of "how". You get to decide the offer price.
0 votes Thank Flag Link Wed Feb 6, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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Hi Anne!
There are many factors that go into what you number you want to go in with and the first thing I would ask your agent is how she or he came up with the number they are suggesting. Many times an agent will do research on the property to see how long it has been on the market, if there have been any other offers on the property that perhaps fell through, or if there have been any recent price reductions. All of these could go into a decision on what to go in with. Remember, the number has to be something you feel comfortable with and at the same time something that is a reasonable starting point for the seller. Even though the other homes in the development could be selling in a certain range, there could be something about this particular property that sets it apart. Also, if you are competing against another offer, all bets are off. You are going to want to come in at your highest and best!
I would ask your agent how she came up with suggestion of your starting price and go from there. Ultimately - it is your decision and she is your ambassador!
0 votes Thank Flag Link Wed Feb 6, 2008
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