Asking Price VS Offering Price?
I am new to this and was wondering how low below the asking price do you go when making an offer? For example, I just saw a house, its in a good area in town needs new kitchen and 1 1/2 bathrooms, and all the cosmetics, inside and out the house is a mess. Without any estimates or inspections done, assuming nothing major would come up. They are asking $340,000. The electronic appraiser has comps between 300k and 400k but you dont know what they look like inside. So what should I offer? Any advice would be greatly appreciated.
I view listing prices as pure fiction. When I look at a property I determine what I think the FMV is, cost of repairs, holding/selling costs and my desired profit. This little bit of math yields the most I'm willing to offer. Whether this number is 10-50-100% of list price is completely irrelevant so long as I make my desired profit.
agreed, but always offer low, you can always offer more. You cant offer less once your offer is accepted however......so try not leave any money on the table by offering too much the fist time. You will hate yourself for not knowing how much less you could have bought it for.
I try to offer 60-70% of FMV - repair cost.
If it's a mess inside and out offer $260k. All they can say is no. I got stuck in the red once when the repairs were more than I thought. I would figure conservativly what if you sold it for $300K after fix-ups, what can you afford to buy it for now to ensure the profit you want.
thanks for the advice it all makes alot of sense. It just seems every property I want to make an offer on there are 3 other people there making an offer for more. If it is bought as a primary residence people are willing to pay more. I am just a little frustrated I want to buy my first deal already.