How low should first offer be?

Asked by Lauren, Philadelphia, PA Tue Feb 17, 2009

I'm looking into buying a house in the Spring Garden section of Fairmount. The neighborhood is still diverse, but the home is beautiful and three year old construction. I'm dealing with the owner, so I don't have a realtor to guide me. The asking price seems high for this climate, and I know the other units that are comparable to this one sold for $25,000 less than this asking price (In August of 2008) and for $115,000 less than this asking price (in July 2007) respectively. In this economy, when you're dealing directly with the owner/developer, how low can you go, and can you provide comps in your offer?

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Charles Bald…, Agent, Philadelphia, PA
Sun Jun 19, 2011
Hi Lauren,

This is timeless question.

The present market circumstances justifies your sober analysis.

First obtain representation and have the agent run a CMA, comparative market analysis ... then base you offer on the merits and deficiencies illuminated within the report.

Be sure to include a 'Home Inspection' so you understand what you are buying, and an 'Appraisal Contingency' that gives provides the ability to rescind your offer and have your deposit returned if the seller does not reduce the purchase to the to appraised value.

Good luck.

Charles Balducci 215.531.2000
cbalducci@cbpref.com
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Jun 17, 2011
Always best place your best offer NEVER know when someone else might have a higher offer than you

Don't play games be real

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Gerard Carney, Agent, Spring Hill, FL
Fri Jun 17, 2011
A Realtor working with you would do a CMA on the property you are interested in, this would determine fair market value, if it is close to asking then I would say if you make an offer do not go more than 5% off of asking, if you see obvious items of concern you can try to offer less stating that these items lower the value, but again a Realtor would give you the best advice!
0 votes
Michele Pal…, Agent, Phila, PA
Fri Jun 17, 2011
Hire an experienced REALTOR who will help you determine the correct Fair Market Value of the property and assist you in negotiating a good deal. You pay the Realtor a fee to represent you and protect you. Call me for assistance 484-645-1905. Thank you
0 votes
Chris & Step…, Agent, Philadelphia, PA
Thu Feb 19, 2009
Laureen,

This is always a good question and even trickier when you dont have representation (which we would highly recommend). I am sure the owner/developer would not mind if you did get your own representation... it would also protect them just in case there were disputes later.

In any event, as far as your question, we just recently wrote a blog post regarding that exact subject which you can refer to below:

http://thesomersteam.activerain.com/post/935158/how-do-you-d…

Let us know if you have any other questions.
0 votes
Michael D De…, , 18969
Wed Feb 18, 2009
Lauren,
Gita gave you some good advise. I just wanted to add that unless you are paying cash, the bank you are getting your mortgage from will require that you get an appraisal on the property. You may want to consider getting one before you make an offer to see if you are comfortable with the current value.
The very best of luck to you! If you need a mortgage or have any other questions, feel free to contact me.
Michael

Michael D Delp
Mortgage Pro
4802 Old Bethlehem Pike,
Telford Pa. 18969
Ph- 215-453-1025
Fax- 215-453-1012
Cell- 610-762-0318
michaelddelp@aol.com
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http://www.mortgagepro.instantlender.com -
0 votes
Gita Bantwal, Agent, Jamison, PA
Wed Feb 18, 2009
If you are dealing directly with owner, make sure you hire an attorney. As for the price, how did you find out about the comps ? Though it is not listed, you can hire a Buyer's agent if you choose to and negotiate the fees with the agent.There is no set rule as to how low you should offer. If you love the house and someone else makes a higher offer you may lose it, if your offer is too low. Talk to the seller , see what their motivation is, explain how you think it is priced too high and see if they will lower the price and see how low they will go. This will give you a clue as to what they will accept.
Web Reference:  http://www.gitabantwal.com
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