Don't base your pricing on tax assessments. What are comparable houses selling for in that area? That's what you should base your offer on.

That the Realtor called back and asked you to make an offer shows they are willing to talk, but may not be desperate to sell at just any price. They can always rent for awhile at their new place, which is what my DH and I have been doing.

Don't base your offer on how much profit they're going to make, that's irrelevant to the price you offer. Also don't base your offer on tax appraisal, they lag way behind in our area and aren't accurate in many areas. Look at comps, look at the fair market value of the home and offer slightly under the fair market value and work your way up to no more than fair market value if the sellers counter offer.

If they got asking that leaves them a true profit of $26K after paying 6% realty fees. Figure some seller closing costs and it's around $23K. That's about 14%. Perhaps a bit high for one year in a moderate market.

If you think 5% is fair then offer that (after costs), which would be around $185K. If it seems to you that the market may not support that then you could start at $165 with your reserve being around $10-15K higher. This is just my thought of course. Your motivation for the home, the seller's mo, and the market will sway the numbers above in ways we cannot predict.

Also if someone else is interested you could lose the bidding. We have lost two homes (over the years) by WRONGLY assuming no one else would be interested (for a variety of reasons) and were, well, wrong.

I agree, their profit is not important, what is the market value, make your top offer, sit firm to see if they bit.

You have confirmed about what I thought! I have a confession to make, I spoke with the appraiser and he thinks $175 is a market value. I just don't want to offend them.

Herus we have lost homes before too and truthfully we would have to place a contigency with a kickout clause so if someone else comes along it will be gone.

Thanks

If you are in my neck of the woods, you will be lucky to break even and will most likely go in the hole a bit after agent commission and closing costs. Even if they get a few thousand over what they paid, they aren't making a "profit." They paid property taxes, principle and interest payments, and most likely the house needed something (even if just a new light fixture.) The idea that people always make a profit doesn't fit.

I would present them with whatever you consider a fair offer and see where it goes.

Gloria

Get the RECENT comps and see what they say. Then take 10% off the comps and use that as your offer. If you think that is too high then just offer them what they paid for it.

You have everything going your way with a motivated seller in the middle of Dec.

Don't worry about offending anyone. People choose to be offended. You can't help it if they choose to be offended.

Good Luck!

There isn't tract like homes or big subdivisions where the houses are farely comparable. There is probably a single wide mobile home that looks like a dump next door to the finest in town. Hope that make sense!

Gloria that sounds like this area!

Homes just don't sell as quickly as they do in other areas!

We are meeting the realtor there again tommorow evening to take another look and make an offer. Of course as stated we would have to have a contigency.

Our home isn't even listed yet but I asked the realtor if we even attempted this, did she already have possible buyers for our home and since ours is a newer home in this old town she assures us she has several prospects!

We will see!

What *is* your area? Giving us a location helps when we discuss RE situations.

Where I live, I'd expect to lose money (after costs & commissions)if I had to sell in a year. With a contingent offer, you are at a bit of a disadvantage in negotiating with the seller. But, if you like the place offer what it is worth to you.

"she assures us she has several prospects" Hmm, I think I've heard that line before. I hope it is true, but don't count on it. I'd interview other agents as well.

They should expect no profit for owning a home less than a year, unless they made substantial improvements to the house or grounds and maybe not even then. They made a bad decision and now have to bite the bullet and move on.

The notion that a home should appreciate thousands of dollars in one year is/was a historical statistical anamoly.

Offer what you feel is right based on comparable properties. Don't let the knowledge of their purchase price sway your offer. If they were transferred for work, then the company is probably paying their moving costs, closing costs, and other perks.

So, make an offer based on the property, discount it a bit for being end of year, do a quick closing and ask for alot or all of the closing costs, as it is probably not coming out of their pocket.

Around here prices seem to have actually dropped a bit within the last year (not gone up) so if you figure in the extras - realtor fees, etc they may be out quite a bit.

It really doesn't matter what they paid (they could have over or underpaid). All that matters is what the market value of the house is now. You may also consider that it is winter and that they "may" be a little more desperate to sell since they were transferred. Then again, maybe they aren't. I know people don't usually want to lose money in selling a house and that may keep them from accepting some legitimate offers, but it shouldn't make you feel it necessary to overpay for a house.

$171K would reimburse their purchase price and pay the commission. BUT -- maybe they overpaid; maybe yours is a buyers market; maybe their company will pick up some part of their costs. (Never mind that they paid real estate taxes, etc.; they were LIVING there! It's like "rent".)

Fair market price may be $175K, but maybe it will sell for less. If you are in a buyers market, and YOU have to sell in another year, what might YOU get for it?

I'd offer $165K and start negotiating. You can always go up, but you can't easily go down. You will want a time constraint in the contract offer and a building inspection clause. The house will need to appraise for the price for mortgage approval.

I'd bet they would be happy to get their original price back, and that their company will pay the RE commission. If they don't like your offer, they can counter. Don't tell anyone what your top offer would be but know it yourself. ($175K? Less?)

Thanks so much! I never even thought about the fact that he works for a major corp who may be paying part of their expenses.

We made an offer of $167,500 today with a 72 hr kickout clause for contigency of selling our current home. The agent won't even discuss the prospect of ours not selling. In our listing agreement if that house sells out before we can sell ours, we have the right to get out of the contract. I live in a 5 yr old Brick colonial with all the amenities. It is a small town in Southwest Virginia.

I'm praying!

Alicia