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WWYD?
I've been looking at condos and put in an offer for one over the weekend. It was listed at $65K (price has been dropped $10K since it was listed in early 2012). The price is pretty reasonable (comps were upper 60s, low 70s, and a couple higher). Tax value is right around $100K. I put in an offer for for $62K and asked for 6% of price for closing costs. The seller's agent responded that the lady had already dropped the price (to get attention) and if I wanted her to pay closing costs, I needed to offer above the asking price.
I think it's a bit unrealistic of her to drop the price down to a point where she left no wiggle room of either lowering it a bit or offering towards closing costs, especially in this market.
I would be happy to pay $65K if she included closing costs. I hate to put this as my offer though since it seems like she'll still want me to up the price or drop off some closing costs.
WWYD? For my price range there's not much else out there. It's the best out of the several options I looked at and I really like it. At this point, adding a few thousand onto the mortgage isn't going to make a huge difference monthly (maybe another $15). However, I worry that getting close to $70K will make it tougher for me to get approved for a loan. My income is pretty low. When I went into the bank to talk about pre-qualifying we'd looked at loans in the mid-50s and mid-60s.
Thanks!
Re: WWYD?
ETA: I see it's been on the market since the beginning of the year -- so the seller might not be as "motivated" (Realtor-speak) to compromise more yet.
I would counter with 65k (asking price) and for seller to pay 3k in closing costs. Especially if you do not want to pay more than the asking price.
ETA - I would make sure 65k is within your budget, since you indicated this was the very top of your budget. I'd be concerned to put in an offer here if you are going to be stretched out.
I would get preapproved to see what your income will allow you to purchase. You should get a Good Faith Estimate from the lender which should estimate closing costs, your monthly payment (including taxes, insurance and PMI). Then you can base your offer on that. If you think $62k is a fair price for the unit and need $3000 in closing costs, then offer $65,000. Maybe the lady doesn't need to sell so she's willing to sit and wait for the offer that she wants.
It's just hard to say what you should do since you are unsure what you can get approved for. Double check that your realtor put a financing contingency in your offer(s). If you can't get financing then you can back out of the offer.
ETA: Don't worry about the tax value of the home. That is typically no where near the actual appraised value of the house (which the bank will send a 3rd party appraiser to value the home). The tax value determines how much you pay in property taxes so if you pay $65k, you might have grounds to appeal the value down and reduce your property taxes (we just did this last month).
I did get a good faith estimate from the bank. It was done for $65K. The mortgage lady told me that would probably be my max loan and it would probably be hard to get approved over that. (I will have some funds when my current home gets sold and also some other money coming in that I can use towards my monthly expenses, so the loan won't break my budget, although it may look pretty tight on paper).
I e-mailed my REA back to see what she thinks would be a good next offer. I suggested some of the options you all had listed above. Thanks! We'll see what she says. That's also helpful to know about the property taxes. Yeah, they're pretty off. None of the condos are selling close to that.
I should mention that the unit is empty and I'm assuming has been ever since it was listed since the rooms are all empty in the photos, too. I can't imagine why the seller would want to be paying a double mortgage (in addition to HOA, taxes, and insurance) for so long, unless the condo is paid off, perhaps.