Bidding $15,000 less that asking price okay?

Question

The seller listed a house for $199,000. He bought i two years ago for $97,000. He did substantial remodel. I would estimate that he put in $30-45K of materials and labor over the past two years. New kitchen, appliances, fixtures, bathroom, paint, crown molding, electric fence, landscaping carpet, laminate flooring, etc.

Zillow estimates the house at $154, but didn't take into account the additional living space and remodel. Neighbor sold two months ago for $174,000.

Do you think it is insulting to offer $184,000?

Neighbors house doesn't look as good as the one for sale. It is also smaller. Basically, with the updateds it is the nicest house on the block. The house has been on the market for two and a half weeks.

It is in a good locations, most of the neighbors are updating their houses.

Oh well, I'm willing to pay $192K, but if it doesn't work out I'll find something else.

Zillow.com contained the information on the last sale price and I can see with my own eyes, that he installed a new porch, new kitchten, new bathtub, new fixtures, and so forth. He dumpped at least $30K into the house. there is no doubt.

Answer 1

Don't worry about insulting the seller. Make the offer. The seller can say no, or come back with a counter offer. You reduced the price by 7.5%. That's not unreasonable. Most sellers set the price at or above the high end of what they think they can get. They expect lower offers and 7.5% lower is not unreasonable.

Answer 2

If the neighbor home was very similar to this one, then I would consider even offering less. It never hurts to try. The worst that could happen is the seller may not accept your bid and may not even counter offer. However, this home may sit on the market for a long time at that asking price as well. This is a buyer's market and many homeowners are taking substantial losses right now on their real estate. A 102k jump in value in 2 years in this real estate market is hard to believe, even if there was substantial work done. You don't want to get stuck in an overpriced home that you could possibly have a hard time selling and at least breaking even.

Answer 3

the overall housing market in the last year is relatively flat, if not down. a $50-60 k increase in 3 yrs seems a bit much to me. Is the house that sold for 174k pretty close in features to the remodeled house you're looking at? you have to compare that. I wound up getting my first house 17 months ago for about 10% below orig asking price. How long has the hosue been on the market? If it's been a few months and they haven't lowered the asking price, you're fine offering 184k.

Answer 4

Is that the going rate in the neighborhood? Have you pulled all of the sales for the last 6 months? Do you know that he paid $97,000 for it and put $30 to $45K back into it?

Get a Realtor who can get a REAL appraiser....otherwise, you are just guessing.

PS: Just because someone sinks money into a house, doesn't raise the value to almost double what they paid for it two years ago....shows on HGTV have SERIOUSLY mislead the public into thinking that is the norm, and it is the rare exception.

Answer 5

As always, the price offered should reflect on the market value of the property. What the owner paid and invested is quite irrelevant to current market value. And that goes in both directions.

Another poster indicates the WORST you can do is lowball, get rejected, and then meet in the middle. That's not quite correct. If you sufficiently irritate this seller, they just MAY refuse to entertain any further offers from you. I had this exact situation occur in May. The sellers got indignant and ordered NO MORE correspondence from that particular buyer who lowballed them.

Answer 6

I would offer that, and worst that could happen is they would reject your bid. You could then meet in the middle. That's what i did with my house, and ended up knocking $5k off the asking price.

Answer 7

go for it