Questions about buying a home....We need an expert's advice...?

Question

My husband & I have just received a pre-approval for $200,000.

The house we want to put an offer on is listed at $219,000.

It was previously $245,000 and then $230,000.

It has been on the market for about 6 months.

We would like to make an initial offer of $185,000 knowing that they would have to counter offer.

Is this too low to start in this market?

Also, we have to move out of our apartment at the end of the month.

So, we would like a timeline of when we will be able to move into our new home.

Taking into consideration the mortgage / credit crisis, after the date the offer is accepted, how long is it taking now until the day of closing?

Answer 1

Your buyer’s agent would be the ideal expert here. They’ll know your market better than a bunch world-wide strangers.

Remember, your buyer’s agent’s commission comes from the seller, and you won’t saving anyone any money by not having one. If you work without representation, your agent’s money ends up in the listing agent’s pocket.

My personal thought: if you submit an offer 15% less than the current list, you stand a really good chance of getting an outright rejection, which tend means if you put in a second offer, you’ll be showing the seller how much you want it and you’ll hurt your bargaining power.

Answer 2

no start low  why not-- It all depends on he underwiting turn times some are 48 hours and someare 45 days to review your complete file --- generaly takes about 2 weeks start to finish in real time but can be done in less time if the loan officer has all your info now and can get the appraiser out there with the first notification of a sale pending

I ama mortgage banker in TN & KY

Answer 3

You were pre-approved for a loan at $200,000.  Don't get that mixed up with the listing price.  For example if you have 20% to put down and you buy the house at $200,000, the loan will only be on $160,000 which is under your pre-approved amount.

From what I'm seeing in the market, there is no too low in this market.  The seller will counter offer 99 percent of the time.  It's hard to offend sellers right now because any offer is a good offer.  It does'nt mean they will come as low you wish.  

As for closing dates, it all depends on the seller.  Some sellers want to get out fast.  One house I just bought the seller wanted to get out in under 30 days but another I was looking at, the seller wanted us to rent the house back to him for up to 90 days while he finds and closes on a house where he would like to move.

Normally you can expect at least 30 days for closing from when the contract is signed.  You might want to check with your landlord to see if you can extend your lease for one month.  Another option is to add a couple thousand more to your contract if the seller agrees to let you close in a very short amount of time.

Good Luck and I hope you get your home!!

Answer 4

Last question first, it usually takes about 60 days from agreement to settlement.  Obviously, you can move in on day of settlement, since you own the house.

First question second.  the $185,000 offer is a discount of 16%, quite a high discount even in this market, especially since the seller has come down twice.  The seller does not have to make a counter offer, they can reject it out of hand - it will all depend on how desperate the seller is.  An offer closer to $200,000 would be more likely to garner a counter-offer, but puts you very close to your loan limit.

Of course, if you offer the 185K and the seller rejects with no counter, you can always raise your bid and have it resubmitted.

Answer 5

It could take anywhere from 10 to 90 days to close on a house.  Is your loan a slam dunk?  Or is it borderline?  That will matter alot.

An offer of $185k ......  well that all depends upon what the house is WORTH.  If it's only worth $150k but the seller thinks he's sitting on a gold mine, then you might buy it and cheat yourself at $185.  If it's worth $230, but there just aren't the buyers out right now, then $185 probably won't do.

Ask your Realtor what to do - that's what he's there for.   He knows the local market and he might know what you can do to make your offer look good without costing you anything.  For example - you want to move in fast - if the house is vacant, tell the owner "If you'll accept our offer of $200k, we'll start paying you rent before the end of the month and until closing at the end of next month."