house budget vs home listing price?

The wife and I are still working through the budget.

But I'm wondering, once we decide on a final price...thats not the same as the home listing price, right?

Let me clarify:
for example if we decide on a max of $600k

How high up in price should we look for?

Im thinking we can look at houses that are listed up to $650 (maybe even 700?), because we can always bargain down to 600.

What do you think?
Look at house 50k higher? 100k higher?

I know, theres also closing costs to consider.

Re: house budget vs home listing price?

I would say 50 k higher. 100 k is a stretch IMO.

ETA: that is what DH and I did and I think it prevents falling in love with something that is out of your budget

Message edited 1/6/2012 12:55:19 PM.

Re: house budget vs home listing price?

We looked between 20k and 50k above our max price. (This was because many houses were priced way above what recent area sales were at the time we were looking.)

Re: house budget vs home listing price?

I was thinking 50k higher, because most of the time (just my opinion) the home doesn't sell at the listing price.
But now I am thinking 100k because the market seems to be tight, and sellers might be getting desperate. or I just might be overly optimistic.

We just saw a home last month, that originally listed for $950k, now its down to 700k.

If it drops to 550, then we might be interested....its old, all of the inside would need to be redone.

Message edited 1/6/2012 1:23:26 PM.

Re: house budget vs home listing price?

I see nothing wrong with seeing homes 100k over these days because if it just came out on the market, it's probably overpriced and price will reduce 50k or even more.

I've seen houses that I passed on last year when looking that sold for almost 100k less that what was asked.

Seeing homes 50-100k over will give you an idea what will be a bargain when you look at homes in your target.

Re: house budget vs home listing price?

What area? Some neighborhoods sell fast. We Had very little leeway in the town we wanted and spent close to asking price. IMO I would not set foot in a house that was over 50k for our budget (town we purchased in) .

Re: house budget vs home listing price?

Re: house budget vs home listing price?

We went to an open house that was WAY out of budget (by $250k!). We happened to be in the area at another open house and figured we'd check it out for the heck of it.

Of course, we fell in love! That's the downside to looking above your budget, every other house paled in comparison...but on the upside, we ultimately bought that house (within our budget)! It was way overpriced and I'm sure that kept many buyers away.

I say look at everything, but know your limitations.

Re: house budget vs home listing price?

Re: house budget vs home listing price?

In general, I would advise to look at homes that are within your budget or slightly above.

If your budget is truly $600K (and you couldn't spend more), and you were my customer, I would encourage you to look at homes up to $639K.

Looking at houses $100K that are asking $100K more than your budget is setting yourself up for disappointment in most cases. If you were looking at homes in the million dollar + range, then it might make sense to do so, but in the $600K range, I don't think it does.

Here's the thing - When it comes to list prices, there's really no "one size fits all" standard. Some people price their homes right, in terms of fair market value, because they need and want to sell. Other people aren't that motivated and are willing to test the waters at a higher price (or they are motivated, but still want to try a higher price and will take frequent price drops). And then you have totally unmotivated sellers that put their home on the market $100K or more overpriced to see if they can "get their price," but they won't sell if they can't. And most of the time, you don't know how motivated a seller is until you start negotiating with them. Many people whose homes are on the market today aren't desperate to sell, but those who are usually have their home priced accordingly.

The best advice I can give is to know your market -- educate yourself as much as possible by looking online, but more importantly, driving around the neighborhoods in your towns of interest and going to view a lot of homes for sale. Also, work with a knowledgeable realtor who knows your area and can advise you on recent comps.

If you know your market, then you know if a home is priced right (or in the range) or if it is grossly overpriced. And you'll know what you want to offer based on that, rather than just trying to negotiate blindly (which is a surefire way to turn off a seller).

Re: house budget vs home listing price?

Re: house budget vs home listing price?

We only looked at houses that were about 25K more than our highest price. We did not want to fall in love with a house that we could not afford. We wound up buying a house for 100K less than what we were approved for and 15K less than what we considered our max.

Re: house budget vs home listing price?

Message edited 1/6/2012 9:48:10 PM.

Re: house budget vs home listing price?

In this market, I would look at 100k higher. Too many sellers are coming on wayyy too high so I would def look higher and take it from there.

Re: house budget vs home listing price?

my point of view is a little different.

I would go up to 50K higher and here's why.

Although Lisa above had a good experience in convincing sellers that are severely over priced to be reasonable and see where the market is. I think she is the exception.

in general, I don't think you as a buyer are going to be the single voice of reason that they hear that overnight will change their mind that they are overpriced and should come down to meet your expectations.

as a seller, and as a buyer, I've seen it takes mostly time and disappointment that makes sellers lower their price to what the market deems is realistic.

you may view a home may be 100K overpriced, I think it will take at least 1, but probably 2 pricedrops over a series of months before they come to terms with it. you may be able to buy the house at the price you want, but when its listed at 700K, they're not going to entertain your 550K offer that you'll eventually get to 600k final price. It will have to be dropped to 650, then possibly 625k before they're within the range where they will accept your offer. and it may take a year before that is the case.

I also have noticed that just b/c the market is lower and slow, doesn't mean that there aren't homes correctly priced that sell in a week, whether it be a week from list, or a week from the right price drop.


if you look at the stats on my house on mls, it sold for 365 vs list of 379. It was previously listed for 9 months at 429. when listed at 379, they had 4 of us submitting offers within a close range.

Re: house budget vs home listing price?

I think it depends on your budget. Is that the max you can afford or your desired amount to spend?

we would like to spend a certain amount, but we are looking $150-200K above b/c for the right house, we might be willing to go higher. KWIM?

Re: house budget vs home listing price?

Another important thing to consider is taxes. Taxes can greatly influence your monthly payment and what you can qualify for as far as far as purchase price. So depending on taxes that wil influence how much higher then list you should look. A good realtor can run a quick analysis on homes you are interested to see what an appropriate price would be, history of the listing etc. to determine if it is something work looking at if its higher than your budget.