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How exactly does making an offer work? I mean, it's listed for x amount of dollars. Are you supposed to offer a lesser amount? How do you come up with a price if you don't really know what you're talking about? Like say we see a house, we can afford it, there's no bidding war etc. But we don't have the chance to really research the neighborhood house prices, etc... How does that work?
 

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Are you working with a real estate agent? The questions you have should be answered by your agent. You agent will have the ability to pull up recent comprable sales and help you determine a fair offer. Your agent will also help you write up an offer and present it to the seller.
 

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Well, generally by the time I've seen a house, I've looked at enough other houses like it to have a feel for what its worth. Barring that, the PP is right, an agent can run comps for you and give you an idea what other similar houses in the area have sold for recently.<br><br>
After that, its negotiating, there are lots of different ways to go about it. You should use your agent's research and any of your own to determine what you think the house is worth and what you would pay. For example, if most similar houses in your neighborhood have sold for $150K, and this is listed at $165K, you really shouldn't pay more than $150K, because that's what its worht, unless you have some reason to believe this is worth more than the others (they were all in bad condition and this is new, has some unique feature, etc)<br><br>
Often folks take a 'meet in the middle approach'. You want to pay $150K, they are at $165K, the asking price, so you offer $135K with the idea that you will each come down equal amounts until you meet in the middle at hte price you really want to pay - $150K. You try in your negotiations to maybe get them to come down more than you come up. The con of this is sometimes you want them to come down so much that in order to start that much lower than what you want to pay the initial offer seems almost insulting. Another tactic is to just go in with your price, tell them this is your price you aren't negotiating take it or leave it, walk away if they refuse. We have had success offering just below our desired price and getting it accepted, so in this case offering maybe $145K and knowing we'll walk at $150K.
 

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I've also found it useful to look up the land records on the property at the county clerk's office. That's easy to do in our area, first you just go to the appraisal district's website, type in the property's address, and get the owner's name from the property tax bill. Then, go to the county clerk's website and search the land records using the name of the owner. The land records go by the neighborhood name, lot #, etc, so it's not by address, that's why you need the owner's name.<br><br>
Anyway, when you pull up the land records you will get the deed trust documents and those are from the mortgage company. You can see when and how much the original person borrowed. So, you'll have an idea of how much they owe on the property. A lot of times people won't be willing to sell for less than they need to pay it off. But, they might, nothing's for sure. I just feel a little better doing that research.
 

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This blog also gives some very interesting advice:<br><br><a href="http://www.irvinehousingblog.com/2007/09/24/a-buyers-market/" target="_blank">http://www.irvinehousingblog.com/200...buyers-market/</a>
 

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Well, we are due for another move soon (military - move a lot). My advice would be:<br>
1. Work with a realtor, particularly as a buyer. Do not use the realtor who is the listing agent for the house you are interested in. Go to another agency and get your own realtor.<br>
2. Pricing is very much $x per square foot - based on comparable houses in the area (same size, school district, etc.). A realtor can easily get this information for you and help you come up with an offer.<br>
3. Be sure that the initial offer is contingent on the home inspection. Once you know what repairs are needed to the house your offer can be adjusted accordingly. For instance, if it turns out that the house needs a new roof then you'll probably want to account for that in your offer after the inspection.<br><br>
As a buyer using a realtor costs you nothing (the seller pays the real estate agents). An agent can also help you find financing and deal with the other legal issues of purchasing a house.<br><br>
If you decide to purchase without an agent then be sure to get a real estate lawyer to help you with the paperwork and such.
 

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<div>Originally Posted by <strong>annekevdbroek</strong> <a href="/community/forum/post/10790487"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">2. Pricing is very much $x per square foot - based on comparable houses in the area (same size, school district, etc.). A realtor can easily get this information for you and help you come up with an offer.</div>
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Around here (Boston area) a lot more goes into it than $ per sq ft. You can certainly look at this way, how much space you get for your money. But often number of beds and baths make a big difference, also the style of house. A 4 bedroom, 2.5 bath of the same square footage will be worth a lot more than a 3 bed / 1.5 bath. Colonials are very popular here, you'll see colonials of the same bed/bath/size go for much more than other styles of the same size.
 

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Another vote for working with a buyer's agent. You really need to see the comps for the neighborhood. And look at closed SALES, not just what else is up for sale.<br><br>
A home inspector, who will come in after you make your offer, will give you estimates for the cost of whatever repairs are needed and you can adjust the price down as needed.<br><br>
As odd as it seems, the listing/asking price is irrelevant. I could put my house up for sale for a million dollars.
 

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look at the assessment too. (especially if there havent been many sales in that area or the house is different from others in the area.) the assessment is what the town thinks the house is worth. sometimes they're pretty much right on, others they're totally off.<br><br>
call the town assessor and get a feel for how the town does their assessments. i talked to one town assessor who said that the asessments there are pretty close to what the house would sell for (based on the sales of similar properties). i told her about a house that we were looking at, and she practicaly laughed at me when i told her what they were asking for it.<br><br>
the assesments in my town are pretty close to actual value. i fought my new assessment a few years ago, and the assessor showed me comparables of similar houses (same style, same number of bedrooms, similar sq ft, same age, etc) and what they sold for. i think right now, my house is assessed at just under what it would sell for. (i havent had anyone check it out, but i had considered selling my house and its based on the sales of similar houses.)<br><br>
and then, there's the assessments in the city. i dont know what to make of those. we looked at a really cute house, and it was assessed for a little over half of what they were asking. so i have no clue what they're thinking there! (i didnt talk to anyone in the assessor's office to get an idea either.)
 

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<div>Originally Posted by <strong>Herausgeber</strong> <a href="/community/forum/post/10794063"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">A home inspector, who will come in after you make your offer, will give you estimates for the cost of whatever repairs are needed and you can adjust the price down as needed..</div>
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In some states (MA is one) the home inspector is not allowed to give you quotes, I had the hardest time pulling ballpark figures out of mine because its not allowed, to avoid a conflict of interest of a home inspector telling you things are wrong and giving you a quote for him to do the work too. However, the home inspector will tell you what's wrong, you can get quotes from others on how much it will cost if necessary. Keep in mind, home inspectors find tons of things, not everything is reasonable to fix. Codes change and older houses can be extremely expensive to bring upto code, I try to get a good feel from the home inspector just why this needs fixing, how critical it is, etc.<br><br><div style="margin:20px;margin-top:5px;">
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<div>Originally Posted by <strong>xmysticprincessx</strong> <a href="/community/forum/post/10794611"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">look at the assessment too. (especially if there havent been many sales in that area or the house is different from others in the area.) the assessment is what the town thinks the house is worth. sometimes they're pretty much right on, others they're totally off.<br><br>
call the town assessor and get a feel for how the town does their assessments. i talked to one town assessor who said that the asessments there are pretty close to what the house would sell for (based on the sales of similar properties). i told her about a house that we were looking at, and she practicaly laughed at me when i told her what they were asking for it.<br><br>
the assesments in my town are pretty close to actual value. i fought my new assessment a few years ago, and the assessor showed me comparables of similar houses (same style, same number of bedrooms, similar sq ft, same age, etc) and what they sold for. i think right now, my house is assessed at just under what it would sell for. (i havent had anyone check it out, but i had considered selling my house and its based on the sales of similar houses.)<br><br>
and then, there's the assessments in the city. i dont know what to make of those. we looked at a really cute house, and it was assessed for a little over half of what they were asking. so i have no clue what they're thinking there! (i didnt talk to anyone in the assessor's office to get an idea either.)</div>
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Ask your real estate agent as well how close the assessments tend to be, they will usually have a good idea. When they run comps for you, they can tell you the assessed value of each of the properties as well, so you can see the difference between sale price and assessed value.<br><br>
Many places also choose to assess below market value to keep people happy, feeling like they aren't paying too much in taxes - this is what my town does, they assess at 97% of value. (my house is worth $400K, but I'm assessed for less, so I'm happy, etc). Also, assessments are done all as of a certain date, like January 1st, 2007 - even though its currently mid march 2008. The town may choose to assess at 100% of market value, but it will all be as of that date, so the market may have changed since then, when things were booming assessments were often far behind, now that many places are falling, they may be higher than market value, even if the house was assessed at its full market value at the time.
 

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You really need to look at comps that have sold in the area recently. A local real estate agent will be able to give you those and in most cases should have a good idea about the houses that sold. A comp on paper is not always a comp in real life. Look at those houses and their asking prices vs what they sold for.<br><br>
Realistically it comes down to what you are willing to pay for it. But if you do not do your research you might discover you paid much too much for it. These days you do have more negotiating room and people can be creative.
 

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Oh, and when buying a home, I recommend you keep resale in mind. Things that cannot be fixed like location or layout problems might not bother you, but when it does come time to sell it, you will have to hope that you can find another buyer like you who doesn't care about the huge issue, sometimes that can mean sitting on the market for a very long time, years even to try to sell.<br><br>
Houses that have serious problems selling are things like very close to the highway or by the power lines, layout issues like the one house my parents have on the market, three bedrooms upstairs, but the two full baths are downstairs right next to each other. No one wants these houses and they are very hard and take forever to sell, nevermind the hit to the selling price (though hopefully you got the house cheaper for it).<br><br>
Sometimes houses with issues can be an opportunity, if you can see a way to fix the issue, you can get the house for the reduced price, fix the issue and when you go to sell it now sells at the more normal non-issue price for a house. I'm not talking about flipping, just after years of owning it, etc.
 

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<div>Originally Posted by <strong>mightymoo</strong> <a href="/community/forum/post/10794752"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">... keep resale in mind. Things that cannot be fixed like location or layout problems might not bother you, but when it does come time to sell it, you will have to hope that you can find another buyer like you who doesn't care about the huge issue, sometimes that can mean sitting on the market for a very long time, years even to try to sell.</div>
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Very good advice - I have seen houses on very busy streets (near busy intersections) sit on the market for <i>years</i> in a "hot" market. Don't buy them.<br><br>
Recent home sales (by zip) can be found on <a href="http://www.zillow.com" target="_blank">www.zillow.com</a>. Along with aerial photos of those houses. Some houses in MI have sold recently for $50K with a zillow estimate of $150K - very motivated sellers! With today's buyer's market, you can keep making "low low low" offers until one is accepted.
 
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