:help I just went to view a property of a seller that is offering a really nice home for 265,000 but it only appraised for 250,000. The seller seems very motivated to sell because he says that he would entertain an offer. As I was viewing the property, I gathered a few bits of information about their situation. The house has been on the market for some time and that the owners have another home they just bought, so it was safe to assume that they cannot afford 2 mortgages both properties. The house is very good condition and do not know what to offer since the owner is so anxious to sell. The owner is so anxious to sell that he showed me where the key was hidden in case I had to come back once more to view the property.
My question is do you think that the seller is truly motivated and what should I offer the seller?
:shocked
I am in NO way an expert, but one of the things I have learned with my RE mentor is that right now is a buyer’s market. Don’t let emotion come into play. I am sure that they are wonderful people, but you can offer something low and they most likely will take it due to their position. Offer $200K and let them counter to $225K. They might even take $200K.
WELL, THERE ARE TO MANY FACTS AT SOME POINT AND WE NO TAKING PENNIES LIKE SOME PEOPLE GO FROM ONE GAS STATION TO ANOTHER SAVING PENIES BUT AT THETME OF THIS KIND OF DEALS THEYLET GO THOUSANDS, YOU VERY LOOK FOR RE SUPPORT HOWEVER WE HAVE ACCES TO INFORMATION WHICH CAN WORTH.
You stated the house has been on the market for some time now, but the asking price is 15K higher than the apprasied value? Doesn’t sound like they are motivated to sell if they are asking more than it is worth.
Moonstruck mentioned it being a buyer’s market…well, that is very much specific to the location. Even in states that are considered “buyer’s markets” you can find certain cities and neighborhoods that are considered seller’s markets.
Do as Paul said and find out how much they owe. Then you can determine what price might work for them. More importantly, what price will work for you? Will you try to fix it up and re-sell it? Rent it? What are your plans if you do buy it?
:banghead I have not found out and really do not know how to ask what they owe. What whould bee the best way to find out what he owes and I too was thinking about offering 200K for the property. I know he’s desperate because he now has 2 mortagages! :help
I should have referred to where I am, which is in CA. There are going to be a lot of foreclosures coming up.
In the seller’s case, they don’t want to spend more money then they have to. Why cut off your nose to spite your face? The seller has to know what position he is in, so he would be best suited to stop playing games and get the house sold. He already tipped his hand and let the OP know he’s “motivated” and many times that means “HELP!” Only a fool would pay $15K more than the value of the home unless there was $5,000,000 in cash buried under the basement. The longer the house sits unsold, the more money they will be out. Bottom line.
understood! But how do I find out what he owes and if he is in forclosure/pre-forclosure. Also, I am not sure if he is current on his payments… another thing i remember during the showing is that he said “with a nice down payment” which tells me he’s motivated and "i’ll take an offer’’ which tells me he’s wanting out!
If he is asking 265k, he is either over pricing to get his 250k in negotiations or he is financed at 110% and in trouble. I agree with the above, offer 190k to 200k and the owner will more than likely tell you he has to have X dollars to get out of house or will say something like my lowest price is $X which will be the loan pay off plus a little extra but you will soon find out. If the house is in great shape then 225K would be highest bid for me and that is only if it needs nothing done to it for some one to move in. Very few places you get will need nothing done once the owner moves out. You still have to consider holding cost if you do not have a buyer to do a double close. Plus the expense of doing the deal, 25K is not much room for error.
Knowing what he owes on it will help you determine whether you’re wasting your time by even looking at the property.
He might have the place over-financed and needs the full $265K (or thereabouts) to pay off a first and second.
If you find that to be the case, you can move on to your next deal unless you see a short-sale opportunity (translation: he’s late on payments), which does not sound like it will work here.
Just offer what you’re willing to pay and see what happens. He might come back and tell you, “But that won’t even pay off my loans! Are you nuts?” At which point you just ask him, “Well, how much do you owe?” The conversation will evolve from there.
It sounds like you’re a little afraid of asking him for information. For what it’s worth, I’ve never had anyone tell me that it was none of my business when I ask them what they owe on the property, and it’s usually the second question I ask them.
Remember to come at this negotiation from a position of strength. You need to be in the mindset that you are holding the cards, and that he needs you more than you need him.
Man, Thanks for all the information!!! That is why I love this site!! I want to say that I will offer the homeowner somewhere around 190K like you said, and if he comes back with the “I cannot cover my mortgage with that” I’ll then ask what he owes. I was afraid to ask what was owed on the property, but you guys have definately changed that!!
You also will want to have some plan in mind if/when you actually get it. Make sure that if you want to rent it out that your debt service, maintenance, etc is covered. As others here have pointed out, if he owes too much it may be smart to just move on…no sense over paying and making his problem your problem.