What's your best advice for a 1st time homebuyer

[WharfRat+]

I live in upstate NY. The market never skyrocketed, so there hasn't been much of a real estate slump here.

House I want to buy is listed at 239,500. Its been on the market for 2 months and was reduced $10,000 like a month ago.

The house is in an amazing location. I couldn't pick a better one.

And it doesn't seem like the sellers have done anything to make it look more presentable for a sale. It needs quite a bit of updating, which I would have to do over time, including windows, roof, landscaping, master bath, kitchen and lots of painting.

My agent says comps are going for 3-5% below ask. But I am only comfortable paying $220,000 tops. Would prefer less. I have about $40k to put down and only want to pay ~$1500/mo including everything.

What do you think I should offer?

Any tips to keep the negotiations in my favor?

Any advice is appreciated.

 

[GasMan]

Nothing to it. Tell your realtor to offer 220K and tell him that is final. The other party will sure to counter offer but stand strong. They probably have not had a single offer yet and will take it, just takes a little bit of balls during the negotiation.

Or, you could go sabatoge the sale by busting out windows, painting KKK on the side, etc...works especially well on things you want to replace anyway. No way owners will want to dick around and you can probably offer 200K as is. Good luck.

 

[WharfRat+]

Any other advice guys?

 

[2dollarRazzplayer]

You are asking for advice on buying a home, in all places at a message form filled with degenerates?

Put your down payment on on Red, and see what happens is my best advice.

 

[WharfRat+]

You are asking for advice on buying a home, in all places at a message form filled with degenerates?

Put your down payment on on Red, and see what happens is my best advice.

There are a lot of sharp cats on here. Just because you still live in your parents basement, doesn't mean the rest of us do.

 

[Anonymous1]

If you offer the 220K, then make the offer subject to 3rd party inspections, roofer, etc., or have a home inspector do thier thing to give you some idea of the mess you might buy into-in any event you need to have cost to cure in hand prior to signing the deal. Then, you got an out if things look worse than expected, or you at least have the advantage of a 3rd party report to support your lower offered price-its not you. You may wind up out a few bucks if you don't go through with the deal, but if you really, really like the location-so be it.

 

[DennizdaMenace]

This is the understatement of the year- ITS A BUYERS MARKET...

Fuck realtors fees..offer 200k and sit as still as a tree`d possum...dont budge..if they counter at no more than 210..sleep on it and make your move..there is a million great houses at there today to buy at reduced rates..but only thousands of people with the $ to but..If you dont get it..move on...if the roof is in bad shape that can be very pricey in itself..talk to a bank about the loan for the balance due and see if you can come up with a 30-40 year FIXED!!!!!!!!!!!! that includes taxes and insurance..this might be close on that 1500 you want to send, taxes and insurance alone can be more than the principal on the mortgage itself.

I recommend..If you have good credit which is CRUCIAL you check with- Chase ...Wells Fargo and Bank of America as possible lenders on the balance..GL..Haste makes Waste here-D

 

[Uno]

DdM makes a great post. No matter how much you love a home you have to take advantage of the market.

Every month I talk with a minimum of 20 home owners whose homes are week away from being auctioned due to foreclosure and for them to hit my list they have to have a minimum of 30% equity.

These people are just looking for any way out possible. I would seek out foreclosure listings in your area and offer this current house 200 and see what happens.

The people who are not getting GREAT deals right now are the people who are forcing the purchase cause they allowed themselves to get closed/sold.

 

[DennizdaMenace]

Government shuts down mortgage lender IndyMac

This Jan. 2008 file photo shows the sign of an IndyMac Bank branch office in...

31 minutes ago

 

[GREENHEAD]

Heres two bits of advise.

1)You got to put down more than 40K.Come closer to 55K.
Just dont think you will get a loan these days unless you put close to 25% down.

2)This is the most important.
Get a 15 year loan.The amount of money you will save is unbelievable.
Yes it will be harder on you,but it will be the smartest thing you can do.
If you dont believe me ask your loan officer how much you will pay after 15 years and after 30 years.You will also get a slightly better rate.

 

[WharfRat+]

Great advice here. Thanks guys.

Ghead- I can go to 45, but that's about it. Will need the rest of my $ as an emergency fund and for improvements. DOn't really want to sell my investments to increase the downpayment. Right now i'm just using money from my savings account for the downpayment.

And I wish I could afford a 15yr mortgage, but at this stage in my life, its not realistic.

I offered $205k yesterday. Think the sellers are away for the wkend so havent heard back yet.

There is another offer they are about to accept, but it has a contingency that the other buyers must sell their house first. It is definitely higher than my bid of 205k. Sellers agent told my agent that they have already turned down an offer higher than mine, but since I don't have to sell a house first, I will be here waiting if they just want out since its going on 3 months on the market.

 

[desrat]

Public records should tell you how much they have the place mortgaged for. Add on the Agent's commission and make this your hard line offer. The offers they have turned down may have been below their "break even" point. Unless they are facing some sort of distress, personal or financial, they will probably hold on until they can get their "number".

On a macro level note, I would personally not enter the market right now unless I was getting my dream house or an absolute steal. Home prices still have a rocky decent for the next 1 1/2 to 2 years IMO. Even places that never saw the run up during the bubble will suffer. As rates rise and lending standards
tighten in the future the amount of house someone can buy based on their income ratios will shrink. This will lead to an across the board decline in home values, bubble area or not.
This is just one guys free opinion... take it for what you paid for it. GL no matter what you decide.

 

[WharfRat+]

Thanks desrat. I'm 32, just had a kid, and my wife and I are finally in a place where we're settled down. The final step for us is to buy our first house. Something we've been wanting for a while.

As for my situation, I offered $205k, they countered $235k.

I plan to make a final offer of $220k + seller pays 5k of closing costs.

I'll be suprised if they accept it since they already have accepted an offer that is probably higher. They know that we are 1st time buyers who don't have to sell a house first, but that didn't seem to motivate them to come back w/ a resonable counter.

 

[joelatti]

Don't rush...YOU are in the drivers seat.....That is a standard first counter....I would be truely surprised if you didn't get the house for $225,000 when all is said and done...I'm not saying cave in, but if this is truely "your house" than that 5K won't mean a thing in 30 years, BUT SET a LIMIT and DON'T BUDGE one once...So if it $220 then 220 it is!

GL

 

[WharfRat+]

Update:

Offered $222k to their counter of $235k and they turned it down w/ no counter offer.

Hopefully the house sits on the market for another few months and I can make a new offer.

 

[joelatti]

IMO great job...DO NOT chase a house that has been sitting for months esp. in this market...Things WILL get worse before they get better...GL in the future

 

[gbogo]

house prices are forecast to drop 20 % in the next 6 months.

theres 11 months existing supply not including any new construction and if the mkt continues to see weakness that could extend.

these were the latest numbers released this week.

I know it might seem a bit hard but when they come back to you Id drop my price 10 k and wait - time is on your side not theirs.

 

[Drunkn247]

Heres two bits of advise.

1)You got to put down more than 40K.Come closer to 55K.
Just dont think you will get a loan these days unless you put close to 25% down.

2)This is the most important.
Get a 15 year loan.The amount of money you will save is unbelievable.
Yes it will be harder on you,but it will be the smartest thing you can do.
If you dont believe me ask your loan officer how much you will pay after 15 years and after 30 years.You will also get a slightly better rate.

You do not need to put down 25% to buy the house. You can get qualified with an FHA loan with only 3% down. I would recommend putting down more then that but don't worry about the 55k. Put down 10% if you have too and you will qualify for the loan easily. As long as your income supports it.