Putting an offer on a house

My wife and I are contemplating putting an offer on a house that we toured that just went on the market. I'm new at this and not entirely sure how much to offer compared to the asking price. Any advice would be welcomed.

 

Get a realtor.

The realtor can see what comparable homes are going for, and will have an infinitely better idea of what the home is worth than you will. It won't cost you anything and will lead to you getting a much, much better deal.

 

Yeah, DEFINITELY get a buyers' agent. That person will be working on your behalf. They get a cut from the seller, I think. Costs you nothing.

 

What everyone else just said.

Believe me, this won't be the last question you have in the process, and having an agent will give you someone who knows the answers better than a message board, even one full of recent homebuyers like this one.

 

Everyone will send you toward a 30-year mortgage, which is standard and not horrible if that's your only way to get into the market, but humor yourself and investigate the 15-year possibility. The interest charges in the early years of a 30-year mortgage prevent you from building equity, and on the off chance you stay there for a long time, a 15-year would save you tens of thousands of dollars over time.

 

Get your mortgage approved first. Then start looking at homes.

 

In this market, throw out a lowball offer first. It can backfire, but I know a lot of people who are getting homes for $20K-$30K less than the asking price. It's a buyer's market.

 

I have a buyer's agent, who has been terrific, but it feels like consulting them on the offer number is a little bit of a conflict of interest given that they get a percentage of the final selling price. There's no real incentive for them to help me to a lower price.

 

They want the house sold. They could care less over a few hundred bucks of commissions.

 

There is a tremendous chapter in Freakonomics about this very subject. Although it's told about the seller's side agent, it confirms the conflict you're talking about. Studies showed that when agents sold their own houses, the houses stayed on the market longer, and sold for higher in relation to the asking price, than when the same agents sold houses for other people. That $10,000 difference in price to you is only $300 to them, so what do they give a shit about it.

And on the buyer's side, the agent is incentivized to get you to pay more, yes. That's why you should be doing your own parallel research about comps and such. In fact, if I were going through the home-buying process again, I would seriously consider forgoing an agent, doing all the prospecting myself (it's easy in a buyer's market and with MLS listings public now), and hiring a by-the-hour real-estate attorney to write the offer and handle the inspections process.

 

get on redfin or zillow ... or since you have an agent make them give you the mls website they're using so you can see listings available now.

each of those sites also lets you see sold home info, so with 10 minutes work you can see what the homes next to and across the street from your potential home last sold for, and when.

glad to see you understand YOU are paying the agent commissions on both sides of the deal, and not the seller.

 

Sometimes the comps may not be too accurate. House next door to mine sold for $180,000 in February. New owner bought it apparently to flip (which in this market sounds crazy right now). But renovations went on there for more than a month (including Italian marble flooring) . . . and last month the $180,000 home sold for $240,000.

I may be entering the dreaded world of need-to-sell/need-to-buy at the same time depending on possible relocation. And while I expect nowhere near $240,000 (offer me $180,000 today and you can have the keys) . . . I need to spend a boatload of money to make the house "sellable" (replacing worn-out carpet with tile, some new appliances, new baseboards, etc.), and even then, who knows how long it will take to sell?