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Ms. Talkabun…, Home Buyer in Kingwood, TX

Are there general rules when making an offer on a residential property? EX: What percent less than list

Asked by Ms. Talkabunch, Kingwood, TX Sun Jul 6, 2008

will be considered a legitimate offer?

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6
No rules. I think it depends on your situation. If this is a home you will live in and it is the only one you like, then bid to win. If it is an investment property and you can take or leave it then bid agressively. I think you also have to look at the property and what situation it is in and guess what situation the sellers are in. You can also consider the price of the house. Is it overpriced, then bid agressively. Is it under priced, then perhaps you want to bid over asking price. How many other buyers will be interested? I'd guess if it is a decent house in Kingswood the average list to sales price is about 97%, so you can look at the trends and figure out what might be an acceptable starting point.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Sun Jul 6, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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There are no rules, if you work positively in concert with your real estate agent I am assured you will have solutions to all of your questions resolved. Good luck http://www.lynn911.com
0 votes Thank Flag Link Sun Jul 6, 2008
A new client of mind was just asking me the same question yesterday. You base your offer on what the property is worth. Some sellers are testing the market, some go right at the price as they are motivated to sell quickly. Some list high thining something unrealistic.

I recently sold a nice condo for 197k and the asking price was 199k. The condo was well worth the price so even an offer of 199k would be good. My client got the condo and is very happy. A like unit was just listed for 240k a couple of weeks ago in the building. It is more likely going to fetch something in the 215k range.

I sold a great condo last weekend for 232k, the origional asking price was 274k. The unit had gotten stale and the price was dropped to 249k after several months. Because it started off too high the sellers ended up with less and the process took much longer. In condos it is much easier to price but I still see sellers asking too much. I tell my clients to wait on both ends for the correct deal. Pricing is very important and know value is just as important to a buyers agent.
0 votes Thank Flag Link Sun Jul 6, 2008
Ms. Talkab,

Don gave you some sound advice.

Also, the price you feel is a "good deal" on a home is important too. Not what anyone else might say. What makes you feel like it is a good offer.

As an example, last year or so around San Antonio offers were 15-20% above appraisal. Today they are 5-10% above appraisal. You go higher if you REALLY want the property and lower if you have concerns about condition.

ANY offer is legitimate. Too low and the seller is offended. Too high and your agent is not doing their job. The comparison prices are key to what is a Fair Market Value (FMV) along with the condition of the property.

Good luck.

Dominick Dina
Christian Realty San Antonio
0 votes Thank Flag Link Sun Jul 6, 2008
Yes, there's a very good rule when making an offer on a residential property. However, the rule has nothing at all to do with list price.

The rule is: Pay no more than the lower of: (1) what you can reasonably afford on a monthly basis (calculated out to a purchase price), or (2) the fair market value, established either by a CMA or an appraisal. That's Rule Number 1.

Note: The rule states: "Pay no more than...." not "Offer no more than...." So your offer should be equal to or less than your maximum allowable offer. How much should your offer be? That's where Rule Number 2 comes in: Your offer, which must not exceed the ceiling set by Rule Number 1, should be no higher than the lower of: (1) Rule Number 1, or (2) the asking price.

The point of Rule Number 1 is to establish the MOST you should pay for a property. The point of Rule Number 2 to lower your offer to (or below) the asking price if the asking price happens to be under your maximum allowable offer.

Remember: You don't even get to the listing price until you determine the property's true value. Even then, you look at the listing price only if the listing price is below what represents a good value to you.

Those are the rules.
0 votes Thank Flag Link Sun Jul 6, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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This number could vary greatly from 5% to 40%. It really depends on the current trends in your market. I would look at the spread between list and closed sale prices to get a sense of how much other people are negotiating off of the list prices. You can see these numbers by contacting a local Realtor and asking to see the past three months of closed sale data in the neighborhood you are interested in.
Web Reference: http://www.bryansereny.com/
0 votes Thank Flag Link Sun Jul 6, 2008
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