Advice on making an offer

[Brock Maggard]

I’m looking for advice on making an offer for a primary residence. The property comes with the house, 20 acres and a shop that I can run my primary business out of.

It’s listed at 225k and it’s been on the market for a full year. They originally listed it with 40 acres for 285k then dropped it to 275k. Then they made an arrangement to separate half of the acreage and dropped it to 225K.

The agent that showed the property to me recommended I put an offer in at 207k Which he said was asking them to pay closing cost. Which would be essentially the same as offering 200K and paying closing cost myself.

This seems like an odd way to structure it. Why wouldn’t I just offer 200k and pay closing cost?

We are ready to put in the offer in the next few days, and I’m wondering, since it’s been on the market 351 days today if I should go even lower. Is there any harm to putting in a first offer at 180K.

Full disclosure, I’m willing to pay 225k but obviously nobody wants to Pay more than necessary.

The house is 1800 square-foot with a very large screened in porch and an office that aren’t included in the square footage. It has an oversized two car garage, two nice shop buildings, and a stocked pond.

The agent said that there will be no issue with the appraisal, so how should I go about the offer to get the best deal possible.

[Howard Herrington]

Brock, did your agent show you the comps that he pulled to get to his suggested number of $207K?  Do you have the additional closing costs to pay on a price of $200K?  If you want to go in at $180K, it is entirely your decision, however if the agent has done the legwork and provided you with documented comps that show a higher average price in that area, you may want to go with his suggestion then once your offer is accepted and you have an inspection done, perhaps try to go a bit lower based on the inspection results.

Believe it or not, this type of deal is common and is usually structured this way if a buyer did not budget enough for the additional costs and fees which can total another 2%-5% of the purchase price.  I actually purchased my house the same way.  The other option some buyers may use, if the seller does not want to pay the closing costs, then you can also ask your lender to pay the closing costs.  Of course, if you do it that way, you would have to take a higher interest rate, and if you have no plans of selling within a few years or refinancing, that higher rate means you will pay those closing costs many times over.