Is this a good offer for a house, The asking price is 209K the originally price was 225k ?

Question

I want to offer 200k with the seller giving us 5% at closing

(3 % towards the down payment 2% towards closing)

The house has been on the market since April of 08

Answer 1

NO BANK is going to allow the seller to pay the down payment for you unless you are doing an FHA and going through a down payment assistance program.

You are making, essentially, a full price offer.

If a house has been on the market that long, I wouldn't have bid so high.

Answer 2

It doesn't work that way.  If it did then everyone would just pump up the asking price and then bargain down until they'd gotten more than the house was worth.

So, what's the house worth?  Your real estate agent should be giving you "comps", that is comparable properties that have recently sold in your neighborhood.  Look at those.  Compare them to the house you're interested in.  Which one's bigger?  Which one is newer?  Which one is in a slightly better location?  Adjust you offer accordingly.

Answer 3

From an investors perspective, you want to get the property for the lowest possible price.  Remember that once you make the offer, that's the starting point of the negotiation and you can't go lower than that.  

Do you due diligence and make sure that you're not offering too much.  How many offers have been made?  Is there a lot of inventory in the area?  Is the property occupied (if it's vacant, every month the owner's having to fork over mortgage without any benefit)?

The seller is likely getting a little nervous that the property has been on the market for five months and may really be willing to work with you at a lower initial offering (such as 190k).  I've been on both sides and when you're a seller, you'd rather get a low ball offer than no offer at all.

Be aggressive with your offers, this is the best buyers market you'll see in a very long time so you want to make the most out of it.

Also, make sure you get prequalified for the loan and don't necessary worry too much about the money back at closing stuff.  Sellers love to know that the buyer can get the loan and the sale will go through to closing without any trouble.

Answer 4

Bank are being very picky about down payment right know, you have to come with it at closing, so you should be very careful about how to present the offer, 200K is a great offer out of $209 asking price, you can ask up to 6% for your closing and apply to any down payment assistant program as Nehemiah or Ameridream, do it quickly because these programs are about to disappear, now if i were you i would offer full price with all those benefits, you probably would get a positive answer that way but everything is negotiable in this business

Answer 5

Sounds good to me.  Try it and find out.  The seller will either ignore you (not accept the low offer) or counter offer you (tell you what they will sell it to you for).