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New Here, buying advice/making an offer
Hi all, I'm new to this board and the whole buying/selling through a real estate agent stuff. We do own our home but it was purchased auction style so we never had a REA. Now we are going to buy an acreage. We are planning to rent out our house since we only have a small balance left on the mortgage. We would consider selling in the future when the market turns around. We've looked at this acreage a couple times, had my parents look at it with us, asked all the important questions and decided we want to purchase it - for the right price. We have preapproval from the bank. The REA did tell us that the seller is very motivated and in the year its been on the market very few people have looked at it. We also know someone who knows the seller and they say she is anxious to get moved before winter (we live in Minnesota). There doesn't seem to be anything wrong with the place but they got divorced and she wants to move into the city and get rid of the acreage as soon as possible. So we're ready to buy, she's ready to sell we just need to agree on a price.
My first question is do I need a different REA at this point to represent us or give us unbiased advice on the market value before making an offer? The asking price is way high for our area although I don't doubt that that much money was put into updates and remodeling. It definetly doesn't factor in the economy or current market. The REA is encouraging us to make an offer no matter how low. So what % of the asking price is a fair offer? We want to be fair to the seller but we also want to take advantage of the fact that the market is really down right now and she really wants to get it sold. Any advice on how to decide what kind of offer to make?
Re: New Here, buying advice/making an offer
Get your own realtor. DO NOT use the seller's realtor. They're looking out for the seller's interest and their own, not yours.
Base your offer on sold comps in the area. There's not some magic number that's offensive or low-balling. Look at the comps and see what houses are selling for. That'll lead you to a reasonable range to start at.
Remember, you can almost always negotiate up. You typically can't negotiate a lower price once you start high (unless you get a schitty inspection report or appraisal).
http://pandce.proboards.com/index.cgi#general
jenbabe,
PLEASE, PLEASE, PLEASE hire a Realtor!!
If you have been speaking with the listing agent, he/she has an obligation to represent the seller. The that realtor, you are a customer, not a signed client. A realtor is only required to provide you with the same information you can find for yourself. If you hired a realtor, they may be able to provide much more information, including comps, disclosures, etc. While the agent may be able to work as an intermediary between you and the seller, I would highly suggest hiring a realtor to protect your best interest and assist you in valutation and negotiations.
First, hiring a realtor, as a buyer, should cost you nothing. The brokers fees are all paid to the listing agent's brokerage firm from the seller's listing agreement, and from that percentage, the buyer's agent is compensated. For that beautiful fee of $0.00, a competent realtor will be able to run a CMA (comparable market analysis) to ensure you are making a well educated, competitive offer. In addition, the realtor may have access to documents and information that might not have been provided by the listing agent. Finally, said competent agent would also be able to assist you in your negotiations as well as understand and run the transaction for you!
Regarding your last paragraph's questions, don't think about the other side of the transaction. Don't get bullied into putting in an offer. Look at your finances, understand the property's value and what the absolute MAX you would pay for the property. There is no magical percentage, and they want you to pay, pay, pay. Have a respectful disregard for them when you go into negotiations, and you will come to a mutually beneficial contract price.
Best of luck!