The seller was stupid. But it happens. Normally, I try to have my clients selling anything from 100-350k have 10k negotiating room. It may be only 7k on a 100k house, and it may be 12k on a 350k house, but that is a general guideline I use. I also would do comps, because if everything in the neighborhood is bringing more per sf, then my offer would change. You need to be able to justify the price you are offering with comps of homes that are similar sized, in the neighborhood, in similar condition. I usually include a letter showing that with my offers, so they know how we arrived at that offer.

Good idea, I will suggest that for his next prospective home. Not sure how his realtor does it, I have a feeling it's just a phone call.

He will keep looking, maybe they will end up dropping the price. If they don't get offers is there any chance they would come back to see if he is still interested? Maybe it is for the best, because they probably would not have been interested in making any repairs or concessions if the inspection turned up anything. Home built in 1978, the inspection has a decent chance of something being wrong.

Did I mention that seller has just relocated this week out of state? The home is now empty.

Maybe the seller needs to get $175K out of the sale. When you subtract a 6% commission and the other costs of the sale from 188K, he nets 175K.

If the seller has relocated for work, they may have a relo package from the employer. I have been on the buying end of two of those but never selling and I've had neighbors move with them. My understanding is they vary but generally appraise the home and fix a price, then give the seller/employee a certain time to try to cell it above that price. If the home doesn't sell within that time, the company takes over the sale -- the homeowner gets the fixed price, the company takes any shortfall as part of the reloacation cost. They may work through a third party -- can be slower to respond, but the company is generally strictly business and doesn't have the emotional attachment to the home. They realize certain repairs have to be made to sell the house. It becomes all about dollars at that point.

A caution on that point -- the relos we bought did not have property disclosures because you are techhnically buying from a third party who doesn't know the home. It's a bit like a foreclosure in that regard.

It sounds like this home has a lot not going for it -- a lot of work and money to be put into it.
I would want to know what the flip went for and make sure I wasn't over buying. Double check the other comps too.

I think Linda gave a good response from a seller's perspective. As a buyer, I'd probably expecct to closer a little closer to a home near the bottom of that range ($3-5k) if the house was priced well and possibly $10-15 on the higher end. A lot would really depend on how the house was priced in the market and how homes are moving in that area.

I agree with the previous poster. I think your son should consider himself lucky and keep searching. I remember your other thread. Military family right? Filled in pool. Wires hanging. Somebody may meet the seller's price, but there are a lot of expenses in fixing that house, and if a fixer is what he seeks, then he'll find plenty!

When we were looking for houses 3 years ago, we made offers on a few short sales, and later discovered what horror we escaped by NOT getting the house. I still think about one. It was perfect EXCEPT someone had taken the water meter, and to get a new one installed was tens of thousands of dollars which would be born by the buyer. Eventually we did find a really nice house in a very nice neighborhood. He'll find a better house. Just takes a little patience.

Yikes! I was reminded of that other thread but didn't check to see if it was the same. If this is the same house, he needs to walk away and not look back. There are so many red flags that suggest the home is going to need a lot more work than meets the eye and more than a typical fixer upper.

I was trying to understand the basic pricing strategies most people use. I know some pay full ask, and some ask way too much or some ask low hoping for a bidding war, but in general I thought most people priced along the lines of what Linda posted.

I know he'll find something. He is renting a condo right now and really doesn't like it. I am glad he didn't pay the price just to "get something.". I told him what gyr_flacon said, that if they don't get other offers maybe they will consider coming down after all. He was a good buyer for them as he had no resale contingency and although he has good credit he has only been in his current job for one year and the pay is partially commission. Since they don't count his commission yet his Dad and I are willing to cosign. There is no doubt that he will get he mortgage, he does have a pre-qual letter (they ran his credit which I hate, because too many inquiries look bad and this one may have been wasted if he doesn't find another one soon)

btw, the pool removal WAS done with a permit (though that doesn't always mean it won't be a problem...) On to the next one!

"...his Dad and I are willing to cosign."

Not my business, and not your question, but still I feel the need to shout "No! Don't do it!" Seriously. Don't.

In my area, quite a few properties sell above asking price, so I don't think there are any general rules. I have offered asking price, just a little above, and also quite a bit below -- all leading to sales. However, I have to say that I also saw properties on which I didn't bother to make an offer because they were so far above what I thought was reasonable which soon thereafter sold for what I had considered fair.

gyr....I hear what you are saying, (I really do!) but he has always been excellent with his $. He is just 25 and is putting 20% down on a 190k home. He makes a good salary and always has worked hard. He pays for his own stuff, not a moocher. He does not want to rent because he feels like he is wasting his $.

He can't qualify for enough because his hourly pay is not high enough and they won't count his commission for another year or so. With what he made lat yer, and is on track for this year he can afford the mortgage. His GF will live with him and help pay the bills. (she works for same company and they split the bills now in the condo they are in) He works for a major wireless carrier and is great at his job. They just offered him a promotion, which is a temporary pay cut I think, but necessary to get ahead (sometimes you have to go back to get ahead). We will be on the deed. I would not cosign if he had bad credit. His score is about 720. It would be higher, but he hasn't had an installment loan since he paid of his car when he was 22! They ding you for not having enough types of credit I think. Hopefully he will get married in a year or two and it will be possible to refinance into their names, or just have us dropped as co-signers. He/We will try to get a mortgage that allows us to drop off if he meets the qualifications. Don't worry, we are not financial sugar daddies, My SIL is horrible at managing her $, and as much as she needed a co-signer once we said NO.

Thanks for the advice. If I didn't already know it could be a bad idea it would have given me something to think about.

I will second the don't co-sign. I won't co-sign for my own sons -- probably not on a car and definintely not on a home. Especially not on a home that sounds a bit sketchy as an investment and needs a lot of work. Not if he has taken a pay cut, he hasn't recovered and he is just "on track" to be able to afford the mortgage. Not if he doesn't have some savings beyond the down payment to deal with repairs, changes, illnesses, car care and all the other financial thing that go bump in the night. And if the GF's income is needed to pay bills -- he's not ready to buy a house. If it isn't needed, are they building their savings?

I am going to pile on to the cosigning thing just a bit. Of all the reasons to not cosign a loan - nonpayment is probably the least worrisome.

I have no problem with you guaranteeing the loan for your son. I just want you to be aware, that it will count against both your credit score and your debt to income should you need a loan. It will also completely eliminate your son's ability to negotiate a short sale should something happen to the house. It essentially eliminates all of his protections against catastrophic loss and saddles you with a burden well above just guaranteeing the payments.

Bry, had t thought about the short sale angle, I will be sure to mention this both hubby and son. I found 2 more house for him to look at so maybe they will be better.

As far as finances, I spoke to the gf last night. She has made the same career move as him, but last year. Initially she had said it was a pay cut and I thought that to be the case, but as it turns out the two of them are earning the same amount ytd. The reason is that her salary is higher but commission lower. It seemed like she was getting less due to the way the checks are paid. Commission is a bigger check at the end of the month, but the taxes are always out or whack. When they compared, they seem to have the same gross pay.She is going to help pay because why shouldn't she if she is living there? It's like rent for her. This will enable him to continue to save. He is not using up all of his savings and we will want to know what he has saved before this goes through. Son is a little cheap, he will NOT be footing all the bills. He is happy to let her pay for everything if she wants!

He is buying at a price he can afford on his own, in addition he is putting down 20% of his own money, about $35k, he will be paying mortgage and taxes only a little more than what a decent apt would cost. Worst case, he moves home/out and we rent it out, or he gets a roommate if gf moves on. We hope they get married, so far it's been a good relationship with them, but a bit early for marriage.

Thanks again for the input. It is wise and food for thought.

I am not really that concerned with his ability to make payments. You are the person in the best position to decide whether or not your son is going to make the payments, not me. Unlike many of the other posters, I don't see a giant problem even if his ability to make payments were questionable. Part of what parents do is protect their children, and honestly helping protect his $35,000 down payment is fine with me, as long as you are going in with your eyes open.

My biggest problem is how it effects your credit. Talk to your banker about how it effects your debt to income ratio. You might not be able to finance a car while you are cosigned on his loan. In fact, you might have no access to credit at all, while he still has access to his. There have been cases where a parent cosigned on a house for a child, only to need the child to cosign a car loan for the parent 6 months later.

Just make sure you're really okay with picking up payments if GF moves out and with becoming landlords if you have to rent it out (you don't fix up a rental the way you do a home you expect to lease adn the repairs are more expensive -- I know cuz......).

Also, if you are on the deed, should anyone be injured on the property or have reason to sue, you and DH will be sued along with DS. Make sure you can handle that -- financially, emotionally, etc. One party with a guest who falls can be enough to put your retirement on the rocks. You can do some things to protect yourself, but the real issue is that you need to consider all the worst cases scenarios and what-ifs and make sure you are really okay with those risks.