As a first time buyer, how can we the house we are currently renting which is going on the market soon?

Asked by Christopher, San Francisco, CA Tue Jul 8, 2008

I know the owner pretty well, and the house is nice, but so pricey. He wants around a million. We've been looking at houses in the area that are much nicer ( fully painted / landscaped / renovated and staged) which are going for that price. How could I get him to take an offer closer to 800k or so?

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7
NonRealtor, , 23456
Wed Jul 9, 2008
Maybe wait a few years to buy. Prices will drop more. Yes, they have, and will drop in San Francisco too. If you decide to buy it and can agree on a price with the owner, you don't need an agent. This will save you 6% commission (6% of 800K is 48K ). Just get a real estate attorney, it costs maybe a thousand or two to put together the paperwork. I'm not sure why Jed doesn't like my simple, truthful answers.

Folks like Jed with their glamour shot pics make me laugh. You should read some of Jed's posts. They're funny. " Bring flowers, candy, something for them..." thats the art of negotiating with Jed on your side.
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Jed Lane, Agent, Petaluma, CA
Wed Jul 9, 2008
Christopher,
You've had good advice (except non-realtor who is one of the nattering nabobs on this site that do nothing but repeat themselves on every post regardless of what the question is).
Work with a lender and get approved for the max you can pay. But be sure you weigh the possibilities of negative changes in your life.
That said, do the research so you can prove where the market value is. Talk to the owner and find out the exact situation. Many time owners will float the idea of selling but are not serious. This could be just such a situation. If the property is worth 800K of course he'd sell it for a million who wouldn't?
Remember in this and in any other transaction the buyer sets the market price. No sale will happen unless the buyer is willing to pay for the product.
As Greg said it could already be signed up to be sold. If so finid out who the agent is and contact them. Don't expect, as Sally said, to get a reduction in brokerage fee. You will have to negotiate that, it is not a give and many, many agents don't discount their work. In fact if the house is listed it would be in your best interest to have representation of your own. If the house is in the condition as you describe that's a great platform to negotiate from.
As I tell all my clients "the power of negotiation is the willingness to walk away from any deal, the skill is in never having to".
If you are going to deal directly with the owner remember that phrase. You can start anywhere with the first offer but if it's clear that you want he will know it's to your advantage and raise you. Only when it appears to him that he has the advantage will he sell you the properety. Obviously the ballance point is win-win. The skill is in geting there.
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Sally Rosenm…, Agent, San Francisco, CA
Tue Jul 8, 2008
Dear Christopher,

Everyone has the right idea. To save you and the seller paying commission, you should make him an offer and give him a printout of all comparable sales with photos at the same time. This will show the differences between his home and the others sold. You will have to do some research to get the ones that have sold. Ones currently for sale are NOT used as comparables because no one knows what the final sale price will be.

You can also talk to a Realtor (naturally) who will do the Comparable Market Analysis for you. If the Realtor is doing both ends of the deal, she/he should give you both a real break on the commission. Otherwise you will have to wait until the home is listed and "sits" on the market for a while for the Seller to meet your price (if, indeed, the home is seriously overpriced which it would be to ask for $1,000,000 and sell for $800,000.)

Hope that helps!

Cheers,
Sally
Web Reference:  http://www.sallyrosenman.com
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Melanie Nard…, , San Francisco, CA
Tue Jul 8, 2008
I'd have to agree with what's been posted here; showing the owner the recent comparable sales -- which you can get from any Realtor -- can help make your case. Now you know what we Realtors do all day, talk to sellers about pricing realistically! :) It's actually the most important discussion we have with sellers. Let me know if I can help by sending you a Comparable Market Analysis.
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Greg Corvi, Agent, San Ramon, CA
Tue Jul 8, 2008
Christopher,
There are several options, but I would need to know more details about your situation. Is the home currently listed with a Realtor? Is seller definately putting it on at a million dollars? Sometimes people are so emotionally involved in a sale or purchase that they don't see things realistically. That may be the case on both sides here. Again it is difficult to know without more details. One approach is to ask the Owner if they would be interested in a lease with option to buy the home. I would suggest you retain the services of an attorney to put it together. Please feel free to contact me if you want to discuss your situation more in detail. Good luck with this or any future purchase!
-Greg
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Gina Buck, Agent, Deatsville, AL
Tue Jul 8, 2008
As a first time buyer in the market, it will be a good idea for you to find the lender that you are going to be dealing with, and get approved. Once you do this, you will create value for yourself from the seller's perspective. Also, you can go to websites like HouseValues.com and request a market analysis for the home. This could be evidence in your favor, especially if the numbers support your claims.

Lastly, try explaining to your owner what you already know about the market and that the other, more expensive homes are nicer and cleaner than the one that you live in, and that putting a home on the market requires time and money, not to mention the fact that you may want to look for a new place to live if this home goes on the market. It would be an easy solution for everyone, if the two parties could reach a reasonable agreement.
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Natasha Lovas, Mortgage Broker Or Lender, San Francisco, CA
Tue Jul 8, 2008
You need to find a really good buyer's agent to represent you. If the house is overpriced, the agent can present your case for a lower price. There are many excellent, experienced agents on this board, I'm sure you will hear from a few of them shortly.

Whoever you hire (at no charge to you -- the commision for the buyer's agent is still paid for by the seller) will search through recent comparable sales and help you put together an offer that's based on reality, not the seller's pipe dreams. Believe me, in this market, if a property is overpriced, it will just sit there, and the seller will see the error of his ways very quickly.

Have you been pre-approved to purchase a residence in the $800,000 price range? If you can provide a pre-approval from a local lender with an impeccable reputation, that will certainly strengthen your offer.

Feel free to contact me should you need more information on how to obtain the all-important pre-approval letter. And. . . good luck!
Web Reference:  http://www.natashalovas.com
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