House on market 1.5 years...what to offer

eagerbeaverOctober 13, 2010

My wife and I found a house that we like. We are currently renting since we have only lived here about a year. We are in MO. Seems to me, that homes with acreage have had more days on the market. This is the case with the house we like. Agent told us that seller had already once lowered house and still no offers. The house is only 14 years old and so the cosmetic updates are due, such as appliances and bathrooms. The house is currently listed for $450,000. What would you suggest our offer be. I would like to naturally get a deal. I do know the couple is divorcing but has not been finalized yet.

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cmarlin20

Ask your agent to help you determine the offer price.
We on this forum can't possibly know if the house is price under/at or over market value, or how willing the seller is to accept less.
The cosmetic needs could already be factored into the asking price.
Trying to get a deal is a great plan, knowing the seller's are divorcing is good information, but again, not enough for us to know what your offer price should be.

    Bookmark   October 13, 2010 at 7:40PM
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eagerbeaver

My agent says to low ball and go in at 400,000 but then another agent that I spoke to said 430,000. So, that is why I wanted some opinions and shared what I know about the sellers. I do think the house is over priced but I think most houses are.

    Bookmark   October 13, 2010 at 7:50PM
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cocontom

Go with 400- what's the worst that could happen? You're the only offer in a year and a half, they'll at least counter.

    Bookmark   October 13, 2010 at 8:13PM
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ottawavalleygardener

I agree with cocntom.

When we bought our current home, the adult son of the elderly owner was anxious to sell, and we offered $270,000 on a $300,000 list price. We thought for sure he'd counter-offer, but it was accepted! You never know!

    Bookmark   October 13, 2010 at 8:22PM
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Billl

Nobody has enough info here to answer your question. The asking price doesn't have any connection to what the house is worth. The house might be on the market for 1.5 years because it is only worth 300k. In that case, offering 400k would be nuts.

You need to have your agent pull together comparable sales in the area and base your offer on those. Include the list of sales with your offer to show what houses are really selling for in your area.

    Bookmark   October 13, 2010 at 8:37PM
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brickeyee

Be aware that mortgages for houses with significant land can be hard to get (and hard for the lender to sell).

Fannie ans Freddie generally want the property divided for mortgage purposes into the house with a 'reasonable' of land and a separate land only mortgage (that they will not purchase).

    Bookmark   October 14, 2010 at 9:22AM
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pamghatten

Sorry brickeye ... that's not the most recent Fannie/Freddie requirements. They want a property with acreage to be compared with a like property with acreage, to determine a value. No one requires land to be split off.

"Appraising the Entire Site of a Property

Selling Guide, Part XI, Section 404: Site Analysis

The property site should be of a size, shape, and topography that is generally conforming and acceptable in the market area. It also must have comparable utilities, street improvements, adequate vehicular access, and other amenities. Fannie Mae is clarifying that the appraisal must include the actual size of the site and not a hypothetical portion of the site. For example, the appraiser may not appraise only 5 acres of an unsubdivided 40-acre parcel. The appraised value must reflect the entire 40-acre parcel."

    Bookmark   October 14, 2010 at 12:56PM
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chisue

You could hire an appraiser. It'll cost you maybe $300 -- perhaps more if you want a written report. (A pittance given the investment you plan to make.)

    Bookmark   October 14, 2010 at 2:39PM
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Carol_from_ny

Just because it's been on the market 1.5 years don't assume they haven't had offers. Very often property that sits that long has owners who have an emotional attachment to the house and they aren't really looking to sell it UNLESS they get "THEIR" price.
Dealing with folks like this is a royal pain in the neck. They are so invested in the house they don't listen to reason.
Talk to your agent let them find out what the back story is. Educate yourself on what like properties have gone for in the recent months and then make a offer. With some luck you might get it BUT prepare yourself that you might very well have walked into a emotional minefield.

    Bookmark   October 14, 2010 at 3:28PM
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brickeyee

"that's not the most recent Fannie/Freddie requirements. They want a property with acreage to be compared with a like property with acreage, to determine a value. No one requires land to be split off. "

That is a change from their long history of refusing to purchase mortgages that had significant land attached.

I have not been involved in a partition for conforming purposes in about 5 years though.

    Bookmark   October 14, 2010 at 5:13PM
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susana_2006

Instead of splitting up land when selling my parents' property a few years ago, I had to go to considerable expense and effort to have a lot line removed & make the whole thing one parcel. The buyers were unable to get a mortgage on the raw land part of the property. Good luck
Susan

    Bookmark   October 14, 2010 at 6:42PM
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mariend

If there is a divorce involved, you might want to consider contacting an attorney. There could be legal issues as to spliting the money, can I (wife or husband) get as much as I can--or as little as I can? Your agent may not know the whole story but legal help could protect you.

    Bookmark   October 15, 2010 at 10:55AM
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steveinjersey

You should have your agent pull up comps and make an offer based on that. How long the house is on the market or how many times the price has been lowered doesn't matter. The only thing that's going to tell you what the market value is right now, is looking at recent comparable sales. The market has changed a lot in 18 months, and what the sellers thought back then about the market and prices isn't necessarily true today. Your agent and the seller's agent will need to talk to each other once you have a good idea what your offer is going to be. Hopefully the sellers are motivated.

How the couple split the money from the sale of the home is not your concern. They might not have an equal ownership investment in the property, there could be pre-nups involved, or one could have inherited the property before or after they married, etc. You don't know and probably won't ever know out about their personal arrangements. Assuming the house is in both of their names, they both have to sign the papers at settlement. If the divorce is nasty, that could be an issue for your atty to make sure of.

    Bookmark   October 16, 2010 at 7:08AM
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totsuka

I would think 390k is a fair offer. I would think the furnace/ac, will need to be replaced in the next few years or sooner. The roof is what, 20 or 25 year max?..appliances, hot water heater, garage door opener, add it all up and you got about 50k in expenses in the near future.

    Bookmark   October 17, 2010 at 5:42PM
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