Thanks everyone for their insight. Our house finally closed yesterday. Of course you go through a lot of emotions, at least we did, (Couldn't wait for it to sell, then became sad at the thought of really leaving it...etc) but now that we've settled into a rental, we're happy to be done with the whole selling side of things. We also feel grateful to have had a sucessful sale in this market. Now that we are in the buyer's seat we still doubt WE would be able to make an intellegent decision based on one visit. Our needs/wants are a bit more unique than the average buyer though. If it were just my husband and I, I could see falling in love with something perfect for the two of us when I walked in the front door...in fact I did: We made an offer the other day on a home that I DID fall in love with on the first visit. I loved it when we pulled up and throughout the whole house. Had it not been an evening visit and we couldn't see most of the yard, I'm sure I would have talked my Husband into offering then and there. Come to find out, it was a short sale and in reality it was perfect for US, but not for our son. We convinced ourselves that we could make the modifications needed to make it work for everyone. Our Agent explained it could take months to hear back so we could offer and continue to look and pull the offer at anytime so we decided to go for it. We have since rescinded the offer when we realized no matter how much I wanted it, and modifications included it wasn't the right house for ALL the family members. I would have always felt it was a selfish decision. Since then we've gone back to another house we've been watching for a 3rd visit..... and now plan to offer on because it's a good compromise house for everyone. I guess it took 3 visits to convince me that I was doing the right thing by choosing this one. It's not that I didn't like it, it was just not what I had envisioned we would buy which was a forever dream home. I've realized it might not be possible to mesh what is perfect for me with the needs of my son. So, after that really sank in and I became ok with it, I feel good about this offer. It's a low offer (I think it's overpriced and part of the reason it's been on the market 10 months) so if we get it, we will be able to make the changes I want that would make me happier with it, and it is an AWESOME place for my son's needs. Wish us luck!

The tax assessment can bear little relation to the actual market value. If you are working with a real estate agent ask for recent comps if possible to establish market value. Here are my thoughts. IF you say the kitchen is tiny and you want to make it bigger and redo it, you should expect to spend $50K. If you are going to redo the tiny kitchen but leeave the same layout, then the cost will be way lower such as 20K. I would allocate $10K for a basic bathroom remodel without changing the floor plan. The other thing to consider is certain things you may not be noticing today you may decide you don't like after moving in. Having said all that, an actual purchase compared to a rent to own is way more attractive to the seller. I would start offering low, show that you have a mortgage preapproval, and negotiate to a final price between yourself and seller... if you cannot get to a price you think you are getting a great deal, then walk away.

Since you want a home in this neighborhood pretty badly, that means your demand is high. And right now, this home in the only one in this neighborhood, plus it's the only one on your list that has a layout that's particularly good for you, which means your supply is low. That means a higher price--but maybe not $270k. I'd say do this: Get them your appraisal number in a way that is credible (not just you on the phone). Suggest that if this number troubles them, that they ask an appraiser of their own choosing to give them his/her opinion; if they balk, offer to pitch in toward the price. Then put together your rationale for the price, much the way marys1000 suggested, to show that the $240k mark is fair. Give them the most recent comps you can find, etc. Then, also point out why they'd benefit from a sale now (market is slow most places, and not near the bottom yet from a national point of view; no broker fee, no advertising, no showings, whatever closing length you're willing to give them, etc.). And, if they invest the cash they walk away with, how much would they make between now and March? But don't make the offer yet--ask them to ponder those issues for a day. THEN offer them $250k, *IF* you can swing the mortgage/downpayment combo w/ the bank. Because, as I said, your individual supply/demand relationship is not the same as the rest of the world's, and they KNOW this. Plus, you said in your letter "top dollar"--not "fair market value." Your initial offer being slightly higher than the appraisal will hopefully take the sting off the lower appraisal and maybe prevent them from seeing you, suddenly, as "those folks out to take advantage of us." And paying over the appraisal can certainly be viewed as "top dollar." if you're willing to go up to $270k, keep that in abeyance until you need it.

Yes. The only contingency was financing the last 50k. It wasn't contingent on selling their house. I am recommending that they not roll over their CDs for a few months so that they can make an all cash offer. In addition we should keep more money in the checking account in case we need to help. Economy is hot around here. People complain we're still in a recession (lol?), but bidding wars for senior cottages? Hour wait to get into the Italian restaurant? At least you can eat there. Some places you just can't go. Anyway, on to the next idea.