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Preparing to make an offer on a new home

E

electricJ

Senior member
I'm about to make an offer on a 3 bed, 2 bath, 2 car garage, 1300sqft home in southern Indiana that is listed at an asking price of $123.9k. Been on the market for about 2 months now, and my realtor has mentioned that no other offers are in the works at the moment. This was finished earlier in the summer, was a model home for a couple months after that, and now has been on the market for 2 months.

I'm talked it over with friends/family and everyone is still unsure what would be acceptable. Is 10% lower than asking price acceptable to start out with on a new home?
 
I would say thats a tad low...you might risk pissing them off enough they wouldn't entertain a more reasonable offer. Maybe offer $115,900.
 
Originally posted by: electricJ
I'm about to make an offer on a 3 bed, 2 bath, 2 car garage, 1300sqft home in southern Indiana that is listed at an asking price of $123.9k. Been on the market for about 2 months now, and my realtor has mentioned that no other offers are in the works at the moment. This was finished earlier in the summer, was a model home for a couple months after that, and now has been on the market for 2 months.

I'm talked it over with friends/family and everyone is still unsure what would be acceptable. Is 10% lower than asking price acceptable to start out with on a new home?
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i do not know the exact market in indiana... but. 10% is kinda too much..

118k sounds good to start with...
120k will be good price to settle...
 
I'd go in at 100 and finish at 110, max.
It's a spec house. The seller is majorly motivated. Stand firm, he'll find where his tolerance for pain lies.
If you really want the house, don't dick around. If you're willing to haggle, get to it.
 
Originally posted by: wonho84
Originally posted by: electricJ
I'm about to make an offer on a 3 bed, 2 bath, 2 car garage, 1300sqft home in southern Indiana that is listed at an asking price of $123.9k. Been on the market for about 2 months now, and my realtor has mentioned that no other offers are in the works at the moment. This was finished earlier in the summer, was a model home for a couple months after that, and now has been on the market for 2 months.

I'm talked it over with friends/family and everyone is still unsure what would be acceptable. Is 10% lower than asking price acceptable to start out with on a new home?
Click to expand...

i do not know the exact market in indiana... but. 10% is kinda too much..

118k sounds good to start with...
120k will be good price to settle...
Click to expand...

In Evansville, IN... thankfully it wasn't even on the same side of town that the massive tornado over the weekend hit.
 
It all depends on your financing. You might be surprised how low some people will go if you are pre-approved and have a conventional mortgage.
 
Originally posted by: timswim78
It all depends on your financing. You might be surprised how low some people will go if you are pre-approved and have a conventional mortgage.
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I'm already pre-approved and I will be getting a 30-year 80/10/10 loan (10% down).
 
The worst that they can say is no. In all reality, they probably want to sell this house, very badly. They'll make a counter offer, which you will counter again. You'll most likely meet somewhere in the middle. Best of luck to you!
 
For 2 months on the market with no offers, 10% is actually not enough. Unless you really like this house, lowball away.
 
Will your life end if you don't buy this house?

Offer $101,000

It's low but the ..01 implies you will go higher.
 
Originally posted by: eelw
For 2 months on the market with no offers, 10% is actually not enough. Unless you really like this house, lowball away.
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My thoughts exactly...with this being on the market for 2 months, I don't think 10% is going to scare them away.
 
I think the key point here is that this is a builder and not a private seller who is likely to be offended. So you can feel free to low ball away.

That being said, unless this builder is strapped, the cost of holding the home is low (minimal electricity and probably very little in taxes). So they may not be as desperate to sell as everyone thinks.
 
Depends on the market and norms in your area.. From what I understand, in some areas, offers that aren't a few k *over* the asking price are ignored. In my area, 10% under (or even more sometimes) is quite acceptable. One of the leading realtors in this area always over-prices houses. The offer/counter-offer is pretty routine and expected here.
 
Update:
They aren't willing to budge much at all. I offered $118.5k with $2k in closing costs, but they countered at $123.9k with $1.5k in closing. I'll make one final counter myself, but thats it. And this is supposed to be a buyers market in my area.
 
I once bid 60k on a house they were asking 100k for. I didn't get it but they thought about it (was a total fixer upper but great location). Never hurts to ask. 😉
 
You can offer any amount you want. When I was selling one of my investment properties -- brand new mind you, I got an offer for over 100k less than my asking price.

A Realor must present all offers to the selling party and it is up to the selling party to reject, accept or counter the offer.

Ask whatever you like. In this market, I'd go way low and let them counter you. Odds are the sellers Realtor will tell your Realtor what they are willing to come down to -- if any. Then offer below that and start the process again.
 
One of the things I do at work is build and sell houses (sold two today!). Your approach is great. Figure out what you want to spend and don't let emotion move you to a higher number. Many people get emotional about buying and / or selling a home, and that is the kiss of death.
 
Originally posted by: electricJ
Update:
They aren't willing to budge much at all. I offered $118.5k with $2k in closing costs, but they countered at $123.9k with $1.5k in closing. I'll make one final counter myself, but thats it. And this is supposed to be a buyers market in my area.
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Do you want the house or not? What does your useless sack-of-crap agent have to say? Probably doesn't give a rat's ass what you pay, because they get a cut no matter what.

Is this a place you're going to live and raise a family, or just a chunk of real estate to flip in a few years? I first would find the right house, in the right location, then pay whatever it takes to get it. The thought of losing a house I really want, for a few grand, would haunt me forever. I get the impression you couldn't care less about it, so my only question is, why bother with it?
 
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