You don't say where you are located, so no one can comment on the actual numbers you give. It sounds to me that the only issues are the deck and dishwasher. The windows and HVAC are probably just old but functional and already considered in the price.

In the areas where I've bought/sold, the fridge and w/d are usually not included, so wouldn't even be expected. That could be different in your area.

If your budget won't allow the purchase at $118K plus the expense of the appliances, then you may just need to lower the price range of your search. Perhaps a condo on the other side of the building, without the "million dollar view" would be $10K lower.

Condos are fairly easy. What are the other condos in the building selling for?

When people sell their homes, the price is for "as is", so the price most likely takes into account those things that needed to be fixed or updated.

If the condo really has a million dollar view, that particular amenity is priceless in my opinion.

Now I am interested in it! LOL!

Yes, what are the comps for other similar condos in that building that have sold very recently? In the past, what has been the "value" of the view? (For instance at the complex where we own on Maui the "front row" buildings have the closest ocean view and generally sell for a constant premium.)

I'd think window replacement would be happening only in the form of an assessment -- for the whole building.

I appreciate everyone's feedback and questions!

I'm located in Washington State, view is panoramic overlooking the Columbia River. It truly is one of the best views in the area. Neighborhood homes are long-time established, middle income. Condos were built in mid-1970. The complex is clean and well-kept. Next door unit, same sq footage sold just recently for 110k; 3 bdrm end unit (approx 300 sq ft more) with new deck also sold earlier this yr for 130k. Not aware of interior condition of those units but by the look of the new deck I would bet that the interior is pretty nice. Windows have been replaced in some units. Owners of other units have been there for 10+ years. It was listed with an agency for 4 months at $125k which leads me to feel that it was way overpriced. It was on the market as FSOB for a month or 2 prior to it going to the first agency. Now it is with another company at $120k for a month and this is the first offer. The agent that I am working with is a long-time acquaintance who also works for the company that the condo is currently listed with. I really want to know that I'm not overpaying (isn't that everyone's concern?). Not afraid to admit I might be overlooking/over analyzing/over anything! This kinda fell into my lap and is the first time I've ever looked. What a whirlwind!

Wow, that view does sound spectacular. Do you love the place? If so, then you won't even remember the few thousand $$ you'll pay if you split the difference with them. If you've read a few posts here, you've seen that many sellers who drop their prices continue to think of their original asking price as the "real" price. So your seller may have the mindset that $118K is already halfway between $125K and $111K. While, for you, it seems like a tiny $2K budge from $120K. You might counter with $115K.

Echoing chisue....
Are the owners really allowed to choose their own windows? I haven't owned a condo for 15 years, but that sounds very un-condo-like to me.

I so appreciate your input!

I see what you're saying with the price and I agree that their mindset is at $125k. I'm really trying hard to get myself to a more realistic view of the true value instead of trying to base everything on how motivated he is to sell--and I know for sure that he's extrememly motivated. That's why I'm looking to others much more knowledgeable than I am in this process.

He originally purchased in mid-'05 for $93k. The updates are great but not $32k worth. I really like the place and not very often can one find an available home or condo around here with a view like this. Haven't seen the covenants--I hope to see them today before I counter--so don't know the whole thing about the windows. There definately are 2 or 3 units in this particular 5 unit building that have windows different than the ones installed in the unit I'm looking at.

Thanks again. I look forward to any more info that anyone cares to throw my way!

Since this is a 30-year-old complex, be sure to look at the financial report. Are the assessments realistic to maintain an aging building? Heck, you want to look at the financials on *any* condo or co-op, but age does matter. Insurance costs have risen a LOT on our Maui condo, which we gutted when we bought it five years ago. (In a few more years, some of the things we replaced will need re-replacing!)

This sounds like a lovely condo. Your contract will surely contain clauses to let you out of the deal if it doesn't appraise well for a mortgage or if a home inspector finds problems.

I'd probably look at it this way: The seller has $93K plus his improvements in the property. What has the market increase been 2005 to 2006? Ten percent? Then why would you pay him 25% on his investment? Sounds like a speculator to me! If you don't need to move, I'd stick at your original offer -- if the documents look good.

You're right on the money with my concerns about the 25% return on his investment. I just don't see it. Would it be offensive or wrong of me to have it appraised by an independent appraiser (someone who is not connected to this thru the mortgage co. or agency) prior to making a counter offer?

Here's an update: Condos about 2 miles away, better view, built about the same year but smaller sq ft and not nearly the updates sold for $120-$126k. Talked over getting an appraiser but now feel that won't be necessary. Several of us are sure he's just trying to recoup his last 6+ months of mortgage payments. I'm not opposed to anyone making money tho--I just like to see it done ethically and not at my expense! Think I'll submit a bottom line offer and see what happens. I can walk from my bottom line and feel good about it...and maybe get some work done too! Thank you chisue, jerzeegirl, and susanjn for your help. Would still love to hear any more concerns or questions you have. Cheers!

there's nothing wrong w/ his ethics. Doesn't mean you have to pay his price, or even that his price is realistically within the market value, but he's not cheating anybody.

This is a great experience in real estate for you, and in negotiating. You'll come out ahead no matter what the outcome.

I like your plan to make a second offer, w/ your bottom-line price, based on comps, etc.,. Would it help if you put together the reasons for your evaluation? (same apt. down the hall's price, bad condition of deck, the fact that big expenses are in the offing, etc.)

at the same time, remember that the rarity of condos like this means something, too.

Would you be willing to pay a little more if it came w/ a fridge? or washer/dryer? (remember that a reasonable basic fridge can be about $500--so why pay more for onem, but also why deduct that much for one? ditto dishwashers--a decent one isn't that much money. you could get them both for about $1k). Though it might make you feel better about paying for his upgrades, if you get them all.

He's not being unethical. At worst he's fishing, and may not catch a buyer. You definitely don't have to take the bait if it doesn't appeal to you that much.

Great thoughts there talley sue--

Please don't get me wrong. I'm not questioning his ethics in particular. Just the sales process and that sometimes it can be rather unethical in how people make their money. I have a sales background--people buy from me and I've gone thru it all, from clients who think that just because they're spending money with me I should give away product too, to those who I have actual working partnerships with and we understand how each of us conducts business. Not alot of negotiation of this caliber, that's for sure. Most of the time we either get the biz or we don't. This is really the first time I've been in the "buying" situation and so yes, the experience has been a fabulous education for me and will give me new insight into conducting my business but having to change gears from seller to buyer has fried my poor little brain! Anyways--there is a $1000 carpet allowance in the listing that I changed to an appliance allowance in my first offer. That change wasn't accepted. The carpet really is pretty good but I suppose I could use it to make the living area really top-notch. I probably would be willing to pay a little more if the appliances were included but I'm beginning to see that it's not a bad thing to have possession of those items should I ever feel the need to move from there. I'm not as financially prepared as I would like to be to buy RIGHT NOW. I was planning on looking in Spring '07. That's why I would like to put out as little cash as possible. I currently rent an apartment and my lease is not up until end of Aug '07. I have that to think about too. Luckily, these apts are in high demand so shouldn't have any problem renting it, otherwise I would have to pay rent until it was rented. On to other stuff--

How does the fact that we included the seller paying closing costs factor into my final counter? We put it in the initial offer and it's still on the short list.

Thanks for listening. I appreciate your comments and ideas!

Asking for the seller to pay closing costs is just like reducing your offer by that amount in the sellers eyes so you might want to keep that in mind.

"How does the fact that we included the seller paying closing costs factor into my final counter? "

The seller ends up with that much less money. So was your offer $111 - $x closing costs? If so, then the seller is seeing an offer of $111-xK, not $111K.

I'm not sure what the difference is between a carpet allowance and an appliance allowance. Maybe the seller works for a carpet dealer?

Thanks lyfia! Just wanted to be sure I wasn't missing something.

Today is the day I put in my final walk-away offer! :^)

If you are in sales, then you are aware of the dangers of overthinking. You don't want to pay to much, but you also want to listen to your emotions too. If you love the place, then money won't mean a thing when two years you are sitting around saying "I wish I had bought that condo!".

susanjn--yes the original was 111k w/closing costs paid by seller and quite honestly, I don't recall anymore if his counter still included closing but I kind of feel that he did not include it. I'll double-check with the agent before I counter. I see where I may have asked for way too much. If he didn't include it then maybe I can counter with a little higher selling price plus a portion of the closing costs? As for the carpet allowance vs. appliance allowance, I thought that was a pretty good move on my part but apparently he didn't. I know he doesn't work for a carpet dealer but more than likely knows one or 2. I noticed that the countertops in the kitchen are the same as what is in my apt, which is fairly new.

jerzeegirl--I was trying to find that word "overthinking" and I'm probably guilty of that right now. My mind is much clearer today and feel like I'm back living in the real world. Usually, if I wait juuuust a little longer than I think I need to then the information I need to be happy with my decision comes to me. Can you hear the wheels turning???

Thanks for the great insight. I'll be back...

Did you digest the condo docs? OK?

An "allowance" is just money off the selling price. Call it "carpeting" or call it "appliances". The seller just gets that much less at closing. (Do we think he cares whether you buy new carpeting?)

I still think your offer is just plenty at $111K.

Maybe you'd like to look at the other condos two miles away that sold for $120K? I would. If nothing else, it might signal that you've lost interest in this deal.

You didn't say what appreciation has been in your area over the past year. Is yours still a sellers' market or is it turning? Does this seller *live* in the condo? Has he bought and sold a lot? (IS he a speculator?)

how do "capet allowances" work--do they just give you the money, or do you have to show them a recept for the carpet, and they give you $1,000 (the money's in escrow or something).

I don't understand why he'd care about the carpet vs. appliance allowance , esp. since he knows appliances aren't coming w/ the condo. He's out the $1,000 either way.

(frankly, I don't care WHERE you live, I think appliances should be part of the deal, esp. the fridge)

Good questions--
What do you mean by condo docs? Are you referring to covenants? Haven't seen those yet and won't place my final until I see them. I'll look into his interpretation of "allowance". Foolishly, I'll admit, I've assumed that he'll replace whatever carpeting/flooring up to $1000, probably dealing with the carpet guy of his choice. I can't quite figure out what I'd replace tho. Everything is either new or in pretty good shape although I have on good authority from a friend who is a flooring guy on the side that the laminate floors are a "membership discount store" brand and there always seem to be problems with it. I'm guessing the owner has a carpet deal with someone he knows thru his job. That's why I figure he didn't accept the appliance allowance. I'll check into that one.

It's still a sellers market, although not as hot as it was last year. Our economy is very good, new biz coming to town every month, new home construction is strong and housing sales are still above the rest of the country.

I'm familiar with the condos going for $120k and know that they're smaller w/no updates to speak of.

He does not live in the condo and hasn't for close to 5 months.

Everything you tell me makes me think you should stick with your $111K. The seller bought for $93K, put a minimal amount into the "easy stuff" (cheap laminate floor, paint) and not the windows, heating, appliances. When he bought, he thought he could flip this condo, but the market changed direction. It sounds like he needs to sell. At $111K ($110K after the allowance and $103K after allowance and realtor commission) he is still ahead by $10K and he isn't wondering if it'll ever sell.

You will be putting quite a bit into this yourself: windows (and the redecorating around them), HVAC, appliances -- replace the cheap flooring?

Yes, I meant the condo association papers -- especially the financials (reserve funds and allocations).

^^^
I agree, and it also sounds to me that psychologically, the seller hasn't let go of the $125k price, even though its now offered at $120k. It would explain the $118k counter.

Everything you're saying is exactly what I was thinking when I first started exploring this. He got a divorce, bought this place, did the updates, remarried in a year and a half, and now expects to make a truckload of money. The kitchen and full bathroom are nice but definately not top-of-the-line. When I did the initial walk-thru, I felt like I was watching one of those shows on cable--"Make it look nice and your property will sell for more than it's worth." Appeal to the eye, not the brain.

I think I'll stay with my original offer, tell them because of the added initial expense of refrig and w/d (can't even move in without those items) and getting out of my lease, it's just not going to work for me at this point. Not to mention the deck, windows, d/w, and HVAC. They are functional but old.

I'm feeling better already! Thanks a million times over for your guidance!

Update: moved the meeting with agent to Thursday...

So an more updated same size same unit sold last year for 110? If it were truly a sellers market it would not be sitting for 6 months

saphire--I don't know if it was updated or not but it is the same size.

The seller and I are on different ends when it comes to perceived value. I have nothing to lose if he doesn't agree with my next offer but he's losing money every month too. He has the right to make as much money as he can but as chisue stated earlier, why would I pay him 25% ROI for cheap updates? The market hasn't increased that much in 18 months.

Home sales in this area are still strong but not as strong as 6 months ago. Because of the size, this condo has more appeal to a single person than to the small young families that are moving here. New home construction is high, established home sales are slightly lower than 6 months ago but still strong (There are reports I have to do every month for an out of town client so I have to keep up with this kind of information). I think it's been on the market for 6 months because it's overpriced, it hasn't been marketed correctly, and newer homes are more affordable to those who are moving here from larger markets and can pay cash for their new home and still have truckloads of $$$ left over.

We'll tune in again Thursday or Friday, MEDIA-gal! (What *does* that signify, anyway?)

I'm in radio with background in other media.

Thanks everyone for the very informative and insightful conversations. You have given me so much more confidence to go into this counter and if this place isn't it, then I'm definately armed better! Helping flip my head from a seller's mind to a buyer's mind has been a tremendous help. I'll admit it--negotiation is not my strongest suit (did you notice?) so I'm always trying to improve them.
This will undoubtedly help me grow in my job...one of those "life lessons" my boss always talks about...and hopefully I can pass on some of this to another newbie. At least I'll tell them about this website! Tune in tomorrow evening for an update--

(When we last heard from mediagal, she was scheduled to meet with her agent to offer her counter to the counter...)

We finally met up on Friday. My agent has been hospitalized since Thursday night with a fever (he's been on chemo for several months) so I met with someone who's filling in for him. So--I really needed a refrigerator and/or washer/dryer and I'm cash-strapped because I wasn't looking to buy yet so my counter was $111.5 (I know, small concession from the original. I'm sure I insulted him.), refrig, buyer pays closing and I'll give him a quick close and that's my final offer. Remember, not only do I have to buy a major appliance or 2 or 3 but I also have to get out of a rental lease. Agent calls back Friday night with the counter--$115, no refrig, no closing costs, or $118 with closing but no appliances either way. I told him thanks but that's not going to work for me. But then comes today. Talked to several people at work and I decided to go back to look at it yet again, just to see if I felt like I was missing something. I'm not--I'm just not feeling it. The view is FABULOUS at night too but his counter still isn't going to do it for me. The deck is not a lost cause but it needs some TLC and some dressing-up. The hvac is the big concern as the agent even said it was O-L-D. He did bring up something that caught my attention tho. Apparently there is a contract or warranty that can be purchased (or make it a part of the offer and ask the seller to purchase it) for a mere $300 or so that will cover all major appliances and built-ins for a year. If something needs to be repaired, it will cost the buyer up to $75 or if it can't be repaired, it has to be replaced at no cost to the buyer. That's one solution to getting a little peace of mind, especially with that hvac system. Has anybody had any experience with this type of contract/warranty?

I got the feeling that this other agent was telling me that he thought that the condo was overpriced without coming right out and saying it.

I can see lots of things to do to the place to really make it look top-o'-the-line which really makes the current offer look further out of contention but makes the condo and all of the work (read: $$$$$) that would go with it better! That view would be so much nicer from a really nice new deck that was accessible from french doors instead of a slider...sigh...

It occurred to me yesterday that perhaps the current owner owns the condo outright. It sure makes sense to me. That could explain why he doesn't seem to be sweating much and why he seems so stuck around $118k. It wouldn't be out of the question if he did own it free and clear.

So, I've decided to withdraw my offer and resume my search for my new home after the holidays. In the meantime, I'll build up my cash reserves, although I think that having virtually no cash has given me better insight.

Would love to hear your opinions about that warranty and of course, anything to do with first-time homebuying!

Cheers!
mediagal

It's standard around here (SoCal) for the seller to pay for the first year of a home warrant plan. It's just written into the sales contract and not even discussed. We've renewed ours every year (it's about $350) and it's been worth it, I think, since we have an older house (1958) that hasn't always seen the best of maintenance over the years.

But you must read the warranty plan carefully because the basic plan may not cover all of your needs. Our furnace/ac unit inside the house is covered; the ac condenser unit outside is not. I would have to pay extra to have that covered.

Thanks, mediagal for the continuing stoorrrry.

I think you've done the right thing by walking. Wait a bit. If you decide to go back and take it by paying the three percent more, you can always do it. You don't have to buy. He does have to sell. Does he want 14% on his investment NOW, from real live you or a possible 16% from...?

I don't have good vibes about home warranties. Post asking about them and see how well they've worked for people putting in claims. On the face of it, it just doesn't compute. Why would someone offer to repair/replace expensive stuff for a fee of only $300? Will the repairman be competent? Will the replacement be another old appliance? Arelabor charges covered?

We have used ours without problems for over 4 years. In fact, I have 2 claims (1 for plumbing, one for microwave replacement) in right now, for repairs to be done before selling the house. Each claim will cost me $50 and I've never had any problems with the repairman's competence.

The microwave replacement just got authorized today - I could get $220 in cash or a new Kenmore microwave. I picked the microwave because the buyers want one in the house.

A new thread on home warranties is a good idea. Would probably get a lot of opinions.

Thank you for suggest that I start a new thread about warranties. Never thought about that. I'm kinda new to this forum stuff.

I'm pretty sure that I won't go back but may consider something closer to what I consider realistic. Never say never!

Thanks for wading thru my drama about this condo. I'm very comfortable with my decision and so thankful that this forum is available and for you all coming along for the ride.

Cheers!
mediagal

A view of the Columbia river is a million dollar view. JUMP ON IT.JUMP ON IT TODAY. dont squabble over a couple of thousand. I look at a fenced in yard and believe me thats crappy

michael so fl--this wasn't about squabbling over a couple thousand dollars. This was more about my perceived value of the property as opposed to how much it was going to cost me, if that makes sense. My gut was telling me that the owner was asking WAY too much for this condo, especially with all of the major updates that would be required--new deck, windows, hvac, and no refrig or w/d. My purpose in my post was to get veteran home buyers'/sellers' views on whether or not I was missing anything. If it was such a great deal, why hadn't it sold after being 150+ DOM and in a somewhat of a buyer's market. I passed and have made an offer on a 3 bdrm house for just about the same $ that he was asking for the condo.

Mediagal, Your Buyer Agent should do you a detailed, written market analysis which would be in two parts--one, comparing it to recent solds; and secondly, to the current competition. They should be able to document for you what is low range, medium range and high range.

There have already been threads about warranties. Just click on Search at the top of the main Buying and Selling Homes forum page. Or you could start a whole new thread.

MediaGal, sorry, I didn't mean to sound so.....something. Just meant to inform.

Not to worry susanjn. Wasn't taken any other way but informative. Truly didn't dawn on me to post another question about warranties. There is ALOT of information regarding warranties on this site.

annainpa--I was able to garner buying info from the county assessor's site as well, which I found to be extremely helpful in my home hunt. The condo is still for sale and my offer on the 3 bdrm home was accepted--we close in just a few weeks (right before Christmas!). No million dollar view of the river but a much better place, with a yard for me and my cat to enjoy.

Now my dilemma is the lease on my current apt. It's not up until the end of Aug '07. I truly thought that the manager would cut me some slack on the lease since I've been here since the complex opened 3-1/2 yrs ago but no such luck. I'm offering a chunk of cash to any one of my friends and acquaintances if they can find someone to move in here in the next month or 2. Should have put much more thought into that problem. Oh well...