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kcmyl's avatar

How to set a target price for buying a new home in this economy?

Asked by kcmyl (19 points ) November 22nd, 2009

This seems to be the best time to buy a home for first time buyers, but when prices fluctuate some much, it is hard to set the right target price for a house. How do you know if you are not overpricing, but still ensure a great chance of winning an acceptance for an offer?

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5 Answers

DrBill's avatar

I offer about 65–70% on the first offer. Most homes end up selling for about 91% of the asking price.

janbb's avatar

Iwould look at “comps” and see what houses nearby have been closing for. Then probably offer about $25,000 to $40,000 less than the asking price if it is a reasonable one. You can always come up.

gailcalled's avatar

You can also, in this market, sometimes negotiate with your realtor over his/her percentage of the take. They seem to have wiggle room these days.

And as usual, @janbb is right about looking at near-by comps.. Also check to see how long the house has been on the market.

vicnav's avatar

You probably all ready know this but make 2 payments to the mortage loan every 2 weeks and only pay the minimum and then have a second payment that goes around the interest if you wana put anymore to the loan. Doing the 2 payments a month thing adds an extra payment at the end of the year. I think This turns a 30 year mortage into a 21 year or something along those lines. I would say a price you can handle and have money left over still for maintenance.

HudsonHero's avatar

See what comparable home in the area are selling for.
Also agree with @gailcalled about negotiating with your Realtor over percentage pts. I’ve done that- it’s not set in stone. During this market, people are desperate, including realtors. You have lots of leverage- use it. Using a Buyer’s Agent can take out some of the guess work. We did that for our first home buying experience. They should have a deep understanding of the area you are buying in.

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