Consumption and Real Estate
How much should we offer on a home for sale “As Is” ?
Question : How much should we offer on a home for sale “As Is” ?
It needs of a lot of work. But in a great neighborhood. The current owner just didn’t take care of. Come to find out I actually know the current owner as we ran into one another when going to view the home. I found out through looking at public records that the house was in the Lis Pendens stage of forclosure in Febuary but as of the end of March I guess it was dimissed so he still owns the home. And he is getting divorced so the home is priced to sell fast. But its needs a new roof,gutters, carpet,pressure washing,paint plus the bathrooms and kitchen needs some updating. And thats just what we saw viewing the home. Who knows what an inspector would find. I found out how much he orginally paid for home which was 115,000, then saw he refi at 129,000 last year. The home is listed at 179,900. Whats a good starting offer point? Or am I am being to pressumptious thinking we can get a decent deal on the home? Any advice appriciated.
home staging advice
Best answer:
Answer by Mikld
Roughly figure what the cost of repairs would be and deduct that, plus $ 10k, from asking price.
For an “as is” property first remove $ 20,000.00 from the retail value of the property. Next, take the square footage of the property and multiply this by $ 14.00 per square foot. Take this figure from the retail value of the house. You should now have a starting point for decision making on the purchase of this house. The listing price and the the selling price are 2 different things, ask for a market sales analysis. Remove the 2 figures from the market sales analysis as well. Example: Asking $ 179,900, actually sold for $ 176,000. That’s an additional $ 3,900 in savings to you. So you would actually take this additional $ 3,900 from the asking price. If you are still above his $ 129,000 financing back off some more $ . You will need for 3 contractors to give you an estimate for the repairs that are needed. If their estimates are higher than the square footage times $ 14.00 per square foot budget set earlier you will need to decide to either reduce the offer further or allow this to eat into the $ 20,000 first reduction. You can allow the ,eat into, to come from the seller making a counter offer. In any event, $ 20,000 plus the cost of repairs reduced from the asking or market sales price would seem to be a good starting point for offer making. The $ 20,000 is your compensation for taking over a property the seller failed to maintain. If you feel this is over compensation, which it isn’t as you will found out. You, of course can change this amount, either up front or in the negotiation process. remember, you can buy every $ 179,000 house out there, if he needs to sell you this house he will negotiate.