How much to offer home seller

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check on zoning industrial on the listing.
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Properties do not always sell for the true market value. Some sellers, and some buyers, are desperate and will take or make any offer.
In my town, the realtors do a pretty good job of setting an asking price that will draw buyers, but will often tell you in advance that you should accept a slightly lower offer, if it is credible, if you want a prompt sale. Properties that are on the market too long get a reputation of being overpriced, and draw fewer offers.
We have an aspiring slumlord in town who has his realtor bid 50 percent of the asking price immediately when any property comes on the market. A seller's realtor should advise the seller to reject that offer, but is ethically bound to allow it to be presented. I am sure most people just laugh at these offers, but I am also sure that once in a while it works, or he wouldn't be doing it. A seller could, probably for emotional or intellectual reasons, find a 50% cash offer, presented immediately, attractive.
I think the gentleman who said you cannot lose money by overbidding exaggerated. Recently, in some markets, values have been appreciating so rapidly that overbidding may not hurt you. But the news lately has been full of predictions that the housing bubble will soon burst, and sales have actually decreased very recently. If you overbid, and prices do not continue to increase, you will certainly lose money. A case in point: a home in our town sold a couple of years ago for far more than similar properties, because the couple just had to have that house. Soon the husband lost his job and had to relocate to the Dakotas; his wife had to leave her lucrative local job to follow him and the kids. Their house was on the market for six months at a high asking prices, but drew few offers, none of which would have allowed them to pay off their mortgage, and pay closing costs, including a realtor's fee. They then decided to rent it to friends, but eventually the friends moved out. So I think it is fair to say that they lost money by overbidding; they just don't yet know how much they lost.
I would suggest a rule of thumb would be to check recent sales prices for similar properties. Adjust that for any special circumstances (need for repairs, exceptionally good condition, changes in the local economy, etc.) and come up with a fair price, and offer just below that, being ready to improve your offer depending on the response. If no realtors are involved, offer to split the savings with the seller.
46erjoe wrote:

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An unspoken premise of many conversations about house prices is that if homes are appreciating quickly, the market value of the house will catch up quickly to the high price you paid, so you won't lose money on the house. Be careful with this one. The right way to think about paying for a house is "how much do I have to pay to beat out the next guy?" If you pay more than this, you're losing money on the purchase. Whether the market value of the house catches up with your purchase price doesn't matter.
The money you spent above what you had to pay (to beat the next highest bidder) would have been in your pocket. You could invest it and be making a return on it or (more likely) spend it on furnishing the house. Determining the minimum price you need to pay is a very difficult task, but the point is you should not take that task less seriously simply because prices are rising rapidly.
A final note (a little OT): don't judge whether there is a "bubble" in the market based on how many stories appear in the papers and on TV and on newsgroups, blogs, etc. Judge whether there is a bubble based on whether you believe a specific argument someone is making on this point. Repetition does not make something true. A good place to start is "Assessing High House Prices: Bubbles, Fundamentals, and Misperceptions", by Himmelberg, Mayer, and Sinai, Journal of Economic Perspectives vol. 19 no. 4, Fall 2005, available in any decent university library. Their bottom line is that there is little evidence of a bubble.
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46erjoe wrote:

this is dumb as shit
you get in there and rip their guts out if they sell it for a dollar then fuckem
send them a postcard
listen at you!
"if I ask to little money, they might not like me and won't deal with me"
if you're trying to rob equity from some young working couple that hits on hard times then that's on your conscience...
if you don't wanna pay alot of money for a house, then buy a fixer upper
have the repairs done and double your investment
they are not making anymore land, get it while you can
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46erjoe wrote:

fucking tight ass cunt!
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