Dear Real Estate Agent:

By
Real Estate Agent with Realty Executives

Dear Real Estate Agent:  My wife and I found this home we love.  But heres the thing - its the market! We know what is going on - the market SUCKS, 299000 is too much to pay for this house.  I would like to look at it, but right know were thinking 235000.  If you would like to show it please let us know.

Sincerely, Joe Buyer

Dear Joe:  I'd be happy to take a look at which house you are looking at and give you my best professional opinion on what it is worth and what I think a good offer is.  It depends on who owns the house (is it a short sale/Bank Owned/or owner occupied?), how long its been on the market, how many other homes in the area are for sale, how many have sold and for what price, and when?   

Sometimes you can get a good deal when the time is ripe.  $235K is in a totally different price zone than $299K though.  A lot of people can qualify for a house for $235K.  That makes the demand for a house priced at that price point to go up.  The bank could sell that house for $235K all day long.  Even at $250K a lot of people qualify for that price.  A good ratio to look at "Generally Speaking" is 10% - you can go under 10% give or take and not feel like you are going too far out of the range of reasonabilty especially in this market.  This is a general rule though.  There is a bank owned listing that has been on the market for six months down the street from a model match that I just sold for $75K less than the price that one is listed at.  The listing agent knows its overpriced but hasn't reduced it for some unknown reason.  There are those unusual cases....so never say never. 

You may want to look at what kind of payment you want per month and look at it from that perspective too.  Don't forget to look at taxes, insurance and HOA if there is one.  A big reason why so many families got in trouble with their mortgages was because they didn't factor in their monthly payment into their lifestyle and budget. 

 Keep in mind that buying a home is an emotional process.  If you look at it solely from an investment standpoint, you'll never feel you're truly getting that killer deal you and half the universe are trying to get.  If you find a home to which you feel a connection, and you are confident that you are comfortable with the monthly payments, you have to look at it as purchasing a future for your family and your memories.  How can you put a price on that?? 

Purchasing a home can be a scary process, but it can also be a very rewarding one too.  Go with your gut as your emotional guidance system.  That along with a lot of due diligence along the way will get you the results you are looking to achieve- that piece of the American homeownership dream!! 

Sincerely, Susan Manning, Real Estate Agent and More! 

Posted by

Susan Manning

Comments (1)

Don Draughn - Mortgage Professional
High Point, NC
Great post.  Many buyers today are clueless as to how to make a good offer.  They see and hear the news media talk about how bad the market is and they think they can steal a home.  I had a client tell me yesterday he was going to offer 70K on an REO that was listed for 120K.  I doubt he will actually get it.  Anyway, thanks for sharing.
Mar 20, 2008 02:04 AM