Post-offer jitters - advice needed on condo value

[Account Closed]

I'm hoping that the good people of BP can help me come to my senses:

Just made an offer for a 2 bed 1 bath condo in Canton, MI. Offered full asking price of 154K. 

When I looked at the comps I was shocked to see that the listings that closed in the last few months have been leaping in the closing prices - in February high 130', Low 140's in the beginning of April, high 140's end of April. The last condo of the exact same floor plan closed about 2 weeks ago at 144. After speaking to the agent who is familiar with the local market (I am out of state) she recommended offering full asking price. Said that given how hot the market is all the seller needs to do is wait for 2 weeks and they'll get it, if not more.

I did go ahead and make the full price all-cash offer which will probably be accepted. But can't help getting jittery with this crazy market which keeps on leaping ahead at a crazy fast pace... What do you all say? Should I stick with it or pull out and try to negotiate?

PS this property would be a primary residence for me for about a year or so, after which I'm planning to likely rent it out. I do need a place to live there asap so getting a bit desperate however don't want to make bad emotional decisions, hence I'm here asking for advice :)

[Natalie Schanne]

Inga C. - Wake up!!! Your agent is giving you a strategy to BUY a place when the market is hot, not get a GOOD deal. I worked with a buyer who told me to write up paperwork to offer $200k (down from a listing price of $215k) on a condo. Our offer was accepted in hours. The LAST comp of the same house selling was $185k. Guess where the appraisal came in ? 185k. So she had to bring +$15k cash to the table in addition to 20% of 185k (loan) to close. No appraiser will say your condo is worth $154k.

If it's your freshly remodeled dream home - ok. But if it's not, I'd back out. All CASH / no contingencies should get you BELOW list price. You also shouldn't pay 10% more than fair market value (what it sold for last week in the 140's).

There is ALWAYS another deal. Don't let anyone (including yourself) trick you into paying so much.

To create instant value, I like to see a lot of deals, then buy ugly and rehab. My first purchase was 5br3ba foreclosure for 255k and I rented out the 4 spare bedrooms to professionals. This paid my monthly mortgage and paid me back for the rehab in cash flow.

With condos, I always think 2br 2 ba are better because they're not twice the price but you can split the unit and live for half off. Like 1br rent is $1500 and 2br rent is $1800. Buy a 2br for $180k and live for $900 or less per month with a roommate you choose.

If you're a primary owner occupant and you're able to close in cash, OFFER cash or no financing contingency then try to get a loan before closing. The loan terms are excellent if you have w2 income and leverage maximizes your tax deductions and minimizes your tied up capital. Good luck.