Help with a bid

Ok. We have been outbid on 1 perfect house and another we had a best and final offer situation that we backed out of because we felt the agent was being shady.

We found another house in the area we want, with a basement, needs work but is so big for our price range. It is only on the market a few days.

We really want to get it. We are willing to do full price. If it's 380,000... Do we do full price? Or do 370, 375? We don't want a bidding war or for them to up their price or something.

Cross your fingers!

Re: Help with a bid

i think the main factor to consider is if 380 is a fair asking price. was the house you were outbid on in the same/similar condition & neighborhood and if so what did that go for? if it was comparable and went for 400...then i would offer 375. if the other house was comparable and went for 360, then i would offer less.

i agree about not wanting to get into a bidding war so you wont want to go too low

good luck

Re: Help with a bid

Check out comps.

Are other comparable homes selling for 380? If they are and you can afford it go all in, I wouldnt want to lose a house I loved over 5k

Re: Help with a bid

Do you have an agent? It sounds like you really could benefit from a buyer's agent who is familiar with the market where you are looking for homes and can advise you on value, offer strategy, etc. That way, you have someone on your side and need not speculate about other agents being "shady," and you would be armed with more accurate info when determining what you should offer initially.

I know in the area where I do a lot of work and where I live (southeast Nassau), houses that are priced under $400K are going quickly. There is a lot more demand than supply. So, if the comps (recent sales in the area of similar houses) dictate that the house is priced right, and you know similar homes are selling quickly and drawing multiple offers, then I would advise you to offer full asking if you were my client. As long as you can afford the full asking price, if the house is worth that to you, why take chances? If you offer 5K less than full asking, it's probably only going to save you $20-25/month, depending on your interest rate. If the house is overpriced for the area based on recent sales of similar houses, then of course you want to make an offer more in line with the comps. But just because a house needs work doesn't mean that hasn't already been factored into the price. Perhaps the same house in mint condition with a basement would be a $450K house not a $380K house, you know?

If you were my client, I would also ask you what you would regret more -- would you feel worse if you paid full asking and got the house, even if you will never know if you could have gotten it for a little less? Or will you feel worse if you offered $5K or $10K less and didn't get it? Usually, if you come in with your best and strongest offer and don't get a house, at least you can't kick yourself later and wonder "what if"?

Also, keep in mind that it's not just about the number you are offering. You also need to present your offer in the most attractive way. When I present offers, I never just throw out a number. I prepare a written summary of all deal terms (down payment, timeline for contract, closing, etc.), provide the buyer's attorney info, make clear they are ready to do a home inspection asap. I make sure I submit a recent preapproval on behalf of the buyer (and provide as much info as I can about their employment, credit, income, etc.), and let the listing agent know he/she can feel free to contact the mortgage loan officer directly for more information. I also try to humanize the buyers - talking about why they want to buy the house, telling a little bit about them, their family, where they are coming from. With most sellers (except sellers of investment properties), the sale is emotional and they want to feel good about who they are selling to.

But in a competitive market, you don't just want to throw a verbal number out. You want to present a serious and complete offer in writing that gives the seller and the listing agent all of the info they could possibly need and want. In a multiple offer situation, this will set you apart from people who submit half-a$$ed offers. As a listing agent, I hate when I have to chase down preapprovals and ask for information like it's pulling teeth!

Good luck!

Re: Help with a bid

I agree with everything Christine wrote

you need a strong buyers agent in this market more then ever

Help with a bid

Thank you everyone, for all of your advice!! We got the house!!! Full asking, but we absolutely think it is worth it! Inspection is next week! Cross your fingers that it goes well!

Re: Help with a bid

Congrats on getting your offer accepted! Glad your offer strategy paid off.

Just keep in mind that the accepted offer is step one of a long process, and the seller is not obligated to sell you the house until they sign the contract.

So if you were my client, I would advise you to get the inspection done asap (like, tomorrow, if possible), and make sure you have an attorney selected. You really want to get into contract asap, especially if it's a house that had multiple offers or may attract a lot of interest. The last thing you want to do is wait too long to get your inspection done. The seller is likely going to keep showing the home until you are in contract (or at least until the inspection is done and things are further along with the contract), so you don't want to give another buyer the opportunity to come in with a higher offer.

Good luck!

Help with a bid

We would like to get in ASAP but the owner's schedule is tight. She was away for the weekend, and is only free on Thursday to do the inspection. She also wants to be there for the inspection. So, we are going that afternoon. We are lining up a lawyer right now and hopefully the inspection will go well, and the lawyer will do their thing. It's such a scary process... we saw another house that had an accepted offer but that agent was fine with us looking, and possibly offering more. I just want to get into contract!