How much to initially offer (real estate) - Chicagoland Sportbikes
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post #1 of 24 (permalink) Old 11-22-2006, 05:05 PM Thread Starter
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How much to initially offer (real estate)

Ok, so I found a townhome I'm interested in and plan to take a look this weekend. I'm not currently working with a realtor (found the listing on craigslist)...so I guess the listing agent will become my realtor by default then.

Anyway, how much is normal to initially offer (10%, 20%, ??% under the asking price)? Also, is it a conflict of interest to have the listing agent be my realtor?....since he should also be trying to get the best price for the seller?

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post #2 of 24 (permalink) Old 11-22-2006, 05:08 PM
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No in fact you might get a better price for the house using the same Realtor as there is no buyers agent commission for the seller to pay, your saving the seller 2.5% right off the bat.

dont sweat it, just make a good deal and grab a decent lawyer for the closing which will cost you about 300.00

as far as price, look around the area and see what comparable homes have sold for, also check zillow.com and see what the value comes up as there. Whatever you do don't let emotion come into it, remember theres always other houses out there, and its a buyers market right now. You will feel it in your gut if your not getting the best deal, i know I always do.




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post #3 of 24 (permalink) Old 11-22-2006, 05:10 PM
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man, if you offered me 20% under my asking price I wouldn't even bother countering. Well maybe I'd counter, with 5k over my original price. 20% under is beyond rude.

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post #4 of 24 (permalink) Old 11-22-2006, 05:18 PM

 
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Quote:
Originally Posted by HDTony
No in fact you might get a better price for the house using the same Realtor as there is no buyers agent commission for the seller to pay, your saving the seller 2.5% right off the bat.

Unless its different in Illinois than Wisconsin..and I can't imagine why it would be...then this would be false.

If you use the agent who is listing the home then that agent would get the entire commission on the property. The listing agent doesn't give you a discount for not having an agent. In this case you are not being represented in the purchase and quite frankly..the cards can be stacked against you if you don't have a working knowledge of the real estate business.

Before you sign an Offer to purchase please take it to an attorney to have it reviewed to make sure your financing contigency is represented accuaratly along with a home inspection contigency (if any) along with the other various items on a offer to purchase that can jump up and bite you.

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post #5 of 24 (permalink) Old 11-22-2006, 05:19 PM Thread Starter
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Thanks for the quick replies.....I checked 'Recent Home Sales' on Chicago Tribune website and there weren't many recent sales in the complex...I'll look around for some other resources that can maybe point me to similar comparabes in the neighborhood.

Quote:
Originally Posted by Vcook
man, if you offered me 20% under my asking price I wouldn't even bother countering. Well maybe I'd counter, with 5k over my original price. 20% under is beyond rude.
Yeah, I figured 20% would be way low but have no experience since I've been a life long renter

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post #6 of 24 (permalink) Old 11-22-2006, 05:20 PM

 
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as far as your question on where to start your offer....that would depend on a couple different factors...area, previous sales, length of time on the market, asking price...etc...etc.

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post #7 of 24 (permalink) Old 11-22-2006, 05:23 PM
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It's all in how you haggle with your agent, normally you would be right, but last time I sold my house, I knocked down their percentage from the usual and held it at that if they brought the buyer. theres no such thing as standards in a deal with me, I am a serious pain in the ass, when in comes to stuff like that

Quote:
Originally Posted by FIRECAT
Unless its different in Illinois than Wisconsin..and I can't imagine why it would be...then this would be false.

If you use the agent who is listing the home then that agent would get the entire commission on the property. The listing agent doesn't give you a discount for not having an agent. In this case you are not being represented in the purchase and quite frankly..the cards can be stacked against you if you don't have a working knowledge of the real estate business.

Before you sign an Offer to purchase please take it to an attorney to have it reviewed to make sure your financing contigency is represented accuaratly along with a home inspection contigency (if any) along with the other various items on a offer to purchase that can jump up and bite you.



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post #8 of 24 (permalink) Old 11-22-2006, 05:26 PM
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Quote:
Originally Posted by Vcook
man, if you offered me 20% under my asking price I wouldn't even bother countering. Well maybe I'd counter, with 5k over my original price. 20% under is beyond rude.
I don't think it's out of line, most people over price their homes by atleast that much. Especially in this market, everyone thinks their house is the fuckin' Taj Mahal. If it's a seller that is honest with what they have and they are fair with the asking price, then yes it would be rude. Most folks that see a nice place and see a fair price will want to buy very close to the asking price simply because they know they have a value within their grasp.

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post #9 of 24 (permalink) Old 11-22-2006, 05:26 PM
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As a buyer, you do not need a buyers agent, just a lawyer. and some would even debate that, but thats where i draw the line, I like to have my bases covered legally.




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post #10 of 24 (permalink) Old 11-22-2006, 05:31 PM
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tony is right, you dont need anybody but a lawyer, just make sure he see's everything. #1 is see how long its been on the market. Longer the better. Also the inspection is crucial. Make sure its a trusted inspector (if you need one I have one i use all the time) same with appraiser. Dont let the selling agent (refer) you to a friend because if so they can work together against you.

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post #11 of 24 (permalink) Old 11-22-2006, 05:34 PM
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Quote:
Originally Posted by Silentalero
Dont let the selling agent (refer) you to a friend because if so they can work together against you.
Huge +1 there, get a good inspector thats outside the deal.




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post #12 of 24 (permalink) Old 11-22-2006, 07:25 PM
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Quote:
Originally Posted by Dr. D
I don't think it's out of line, most people over price their homes by atleast that much. Especially in this market, everyone thinks their house is the fuckin' Taj Mahal. If it's a seller that is honest with what they have and they are fair with the asking price, then yes it would be rude. Most folks that see a nice place and see a fair price will want to buy very close to the asking price simply because they know they have a value within their grasp.
you're nuts. You're talking about low balling my townhouse by rougly 75k, for example. I'd want to punch you in the face if you insulted me like that.

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post #13 of 24 (permalink) Old 11-22-2006, 07:40 PM
 
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GOLDEN RULE - Offer what YOU feel the property is worth...now that being said...do your homework. Have the realtor put together price comparisons but also look at other houses in the neighborhood yourself. Then look at the house itself and see what work has been done to it and what needs to be done to it.

The way I look at it is if you really don't like the house but it's the best one you've seen so far, you'll fight on the price. But if it's something you REALLY like, you'll pay a little extra for it. It always works out that way.

To actually answer your question, it's acceptable to offer them any amount of money you feel is appropriate. If you come in way lower than their asking price, I suggest attaching a list of reasons why you felt it was only worth that amount. That way the seller is not completely insulted and if they are way overpricing, they may become more reasonable. If not, they may just chose not to deal with you anymore but it's like buying a car, you always have to be prepared to pay their prices or be prepared to possibly walk away
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post #14 of 24 (permalink) Old 11-22-2006, 08:09 PM
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Comps in the area are the best way to determine what the seller is actually after. this is where a realtor is helpful. Unless they are going to give you 3% off of the final sale price (what they would be paying your realtor) which they prob won't , I'd find a realtor to represent you, it isn't costing you anything really. That realtor (more than likey) will still take 6% from the seller whether you have a realtor or not. +1 on the inspector and appraiser, def go with a friends recommendation. good luck.
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post #15 of 24 (permalink) Old 11-22-2006, 08:49 PM
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Quote:
Originally Posted by Vcook
you're nuts. You're talking about low balling my townhouse by rougly 75k, for example. I'd want to punch you in the face if you insulted me like that.
Ah but you would be a good person and put it up at it's actual value. so no face punching would be needed since I would see that you are an intelligent individual who doesn't over value their home. Many, many people way over value their homes, lowballing them is smart as they probably have not gotten or will not get an offer from anyone else for the money they want.

For example, how about those houses you see that have been on the market for a while. They even advertise that they have lowered the asking price, some even beyond the 20% mark. A house is only worth what people are willing to pay for it.

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post #16 of 24 (permalink) Old 11-22-2006, 09:11 PM
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Better yet find a friend who is a realtor and split the commision with them.

And vcook, do not let your emotions ever get involved in business, remember its business not personal, theres no reason to be punching anyone in the face there are no insults when it comes to price just starting off points, its all about negotiation.




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post #17 of 24 (permalink) Old 11-22-2006, 09:21 PM

 
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Quote:
Originally Posted by HDTony
And vcook, do not let your emotions ever get involved in business, remember its business not personal, theres no reason to be punching anyone in the face there are no insults when it comes to price just starting off points, its all about negotiation.

Its not negotiation when someone lowballs you by 20% ...thats just stupidity in my opinion. I wouldn't counter such a low offer either just because we are so far apart to begin with.

If a house isn't worth what someone is asking, they will get found out right about the time the appraisal is completed because house values are determined off of comparable properties to the subject. I have had many instances in my mortgage career where someone purchased a home that I couldn't get value for on an appraisal. When that happens the buyer can either renegotiate or pull his offer, I have had both happen.

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post #18 of 24 (permalink) Old 11-22-2006, 09:39 PM
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Quote:
Originally Posted by Vcook
you're nuts. You're talking about low balling my townhouse by rougly 75k, for example. I'd want to punch you in the face if you insulted me like that.

Why not ... I lowballed almost 30% and got it at almost the price I wanted... I say definalty go 20-25%
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post #19 of 24 (permalink) Old 11-22-2006, 10:23 PM
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Quote:
Originally Posted by meech
GOLDEN RULE - Offer what YOU feel the property is worth...now that being said...do your homework. Have the realtor put together price comparisons but also look at other houses in the neighborhood yourself. Then look at the house itself and see what work has been done to it and what needs to be done to it.
That's good advise. Don't worry about insulting the seller. Your not in this to make friends. Trust the comps, but remember that all those comps that your realtor is likely to find will be from when the market was a lot better. Right now it's SLOW!!!!!!!!
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post #20 of 24 (permalink) Old 11-22-2006, 10:24 PM
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Quote:
Originally Posted by Vcook
you're nuts. You're talking about low balling my townhouse by rougly 75k, for example. I'd want to punch you in the face if you insulted me like that.
+1 If I were asking fair market value on my home, and someone low balled my house, I would kick them in the nuts, then only sell to them over my asking price.
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post #21 of 24 (permalink) Old 11-22-2006, 11:28 PM
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I was lowballed over 20% once and didn't even counter. My realtor said he didn't even want to call with the offer but was obligated to. The same people ended up paying list price two weeks later.

I guess it might work if someone was desperate. I don't know if you can use percentages on homes in the Chicago Market. Even 10% is 30k off your average home. If you get 10k, that would be a decent deal. Other people just ask for different items like repairs.

I also had less commission if my realtor sold my place. He used it as a selling point to sign with him.




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post #22 of 24 (permalink) Old 11-22-2006, 11:31 PM
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Quote:
Originally Posted by Dr. D
Ah but you would be a good person and put it up at it's actual value. so no face punching would be needed since I would see that you are an intelligent individual who doesn't over value their home. Many, many people way over value their homes, lowballing them is smart as they probably have not gotten or will not get an offer from anyone else for the money they want.

For example, how about those houses you see that have been on the market for a while. They even advertise that they have lowered the asking price, some even beyond the 20% mark. A house is only worth what people are willing to pay for it.
well clearly different rules apply when dealing with asshats. haha! I'd never way over price my shit, people are stupid. Then you're stuck with a house on the market forever, that looks bad and you have to lower your price 20 times.

Chris

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post #23 of 24 (permalink) Old 11-23-2006, 06:03 AM
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20% does seem a bit over the top but you never know the sellers situation. Have a friend who just bought a condo in Chicago for 200k in a complex where the same ones were going for 235k.
She just came across a really sweet situation. It was owned by a old man who died and both of his kids were fighting over it. The kids were in court for 2 years fighting over it! During the fight the law says neither had the right to sell it. So after 2 years they agreed to say fuck it and sell it asap, they priced it really low and took the first offer. ( I am sure both kids ran up a lot of bills during this time expecting a big windfall) Of course this is an extreme situation but they do happen.
Likewise in my complex the original owners of the condo units bought at preconstruction prices back in the 1980's for 65k and refuse to sell for less than 245k. Greedy mutherfuckers. They are typically very old and on deaths door , have had the place paid of for years but refuse to let it go on the cheap. +1 on people thinking their place is worth more than it really is. Everyone is guilty of this, it goes for bikes and cars too.

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post #24 of 24 (permalink) Old 11-23-2006, 09:24 AM Thread Starter
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Thanks for all the input....this has been very helpful

I appreciate the advice and I realize I'm way to inexperienced and busy to go into this alone. I plan to contact a realtor I worked with a few years ago and see if he can represent me on this.

Thanks again and have a happy Thanksgiving day!

- Frank
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