Making Offers & Related Issues
Is there a percentage a seller will mark up the price of a home? For example, if the asking price is $114,000 is an initial offer of $95,000 too low?
Although you can always offer whatever you want, yes, $95,000 is generally too low too offer for a home priced at $114,000.
It's like buying a car. You want to dicker with the salesman a little, but there is more room to dicker on a more expensive car than if you were going in and buying the least expensive car.
Sellers usually mark up the price a little because they realize most
buyers aren't going to make a full price offer (though in different
markets you can get offers ABOVE the listing price). In your example
above, you were offering almost 15% below the listing price. They don't
mark it up that
much, just a few percent.
Before you make an offer, get your Realtor to go over the comparable sales of other similar homes in the same neighborhood. That is the same data the seller looked at when he priced his house, too. Make certain allowance for whether houses are selling briskly or slowly, and make an offer based on that data.
Note: When you look at comparable sales, you don't know for sure if the seller paid closing costs for the buyer or provided some other financing incentive, so keep that in mind.
I am looking at putting an offer in on a house listed for $134,900. The house is vacant and I believe it has been on the market for over 6 months. My realtor is saying is should bid 134,00 with the seller paying my closing cost and paying for a 2/1 buy down. I want to try and offer less. What do you think?
Your closing costs should be approximately $4000 or so (depending on what type loan you get, how many points, etc.). The 2/1 buydown (assuming it is an annual buydown) will cost the seller about $4000, too. By paying for these costs, if you offer a price of $134,000, the seller is netting the same as he would on if he accepted an offer of $126,000 and paid no costs.
If you think the house is worth less that $126,000, then make a lower offer. If you think it is worth more than $126,000, then you would be getting a deal with your Realtor's suggestion.
Your Realtor provides advice. You decide what to offer based on that advice.
If you make an offer on a house and the owner comes back with a counter offer and you agree to it can the owner still change his mind and sell to someone else?
A seller is free to withdraw the counter-offer any time prior to your acceptance of it. The communication method for acceptance is usually described in the contract. If your acceptance was communicated to the seller in the method required by the contract (prior to the seller withdrawing the offer), the seller should honor the contract with you and not entertain other offers.
But people don't always do what they should.
The problem then becomes whether you try to enforce your contract or not, which requires legal advice and expenses. For that, you have to consult an attorney.
Although you could probably technically enforce the contract, you have to reach a decision on whether it makes sense to expend the time and money to do so. Or does it make more sense to realize the seller is unethical and just move on to buy something different?
Can you negotiate when making an offer on a new home?
Making an offer on new construction is not the same as making an offer on a resale. Most of the time, the margin for profit is so small on new construction (per unit) that there is basically little or no negotiating. You can try, of course, because "everything in real estate is negotiable," but do not expect too much.
Can you negotiate the price of a bank owned home
Everything in real estate is negotiable. However, banks are more sophisticated about pricing than they were years ago. So those "Get a great deal on a foreclosure!" days aren't what they used to be. Lowball offers generally don't go very far.