house/condo buying questions

So DH and I are looking to buy again.
I have 2 questions - we still are pretty clueless about a couple of things:

1. When they say 'Make an offer', what is reasonable? If something is listed as sa 500K, can you offer 400K or is that ridiculous? How do you know what to offer?

2. We haven't been pre-approved yet. We know we'll be OK, we have savings and good credit - but where is better to go to get preapproved - just any bank or is it better to use a mortgage broker.

Any thoughts/opinions/tips would be greatly appreciated.

Thanks!

depends on a lot of factors- but the best way is to compare it to what sold in the complex recently- you can use zillow for this/

for example- 2 bedrooms, new kitchen sells for $250k, the coop you look at is listed at $275k and has an outdated kitchen- offer less that what the other sold and point out why you are offering less- thats the part that many people miss.

good luck

To answer your first question, I would not make an offer $100k less bc it won't be taken seriously. It really all depends on the condition of the house. We looked at a house that would need work and we had wanted to make an offer, but the homeowner wouldn't go any less than 20K off the asking price bc they wanted to get the money that was still owed on the mortgage. It wasn't worth that money so we didn't make the offer. You just need to decide what you are willing to pay for the house if the house is $500k, but you'd only pay $480k max, you could make an offer at $470k.

Second question - mortgage brokers approve you for more money than a bank does, so I'd go with them.

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Posted by yelley77

they say the offering 'sweet spot' is about 15-20k below asking price.

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We did more than $20k for our original offer!

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Posted by Mici n KC

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Posted by yelley77

they say the offering 'sweet spot' is about 15-20k below asking price.

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We did more than $20k for our original offer!

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us too & settled around $35k under asking.

if a house/coop/condo has been sitting on the market a bit the sellers are more motivated to bargain

Thank you so much ladies!
I knew 100K less was ridiculous, but wasn't sure how low was appropriate to go.
We aren't even close to making an offer, but an agent is picking us up at 5:15 to go looking at a couple of places - I'm excited!
She found us a couple of places in Windsor Terrace/Park Slope that are actually reasonable. Keep your fingers crossed for us!

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Posted by MsPotterhead

Thank you so much ladies!
I knew 100K less was ridiculous, but wasn't sure how low was appropriate to go.
We aren't even close to making an offer, but an agent is picking us up at 5:15 to go looking at a couple of places - I'm excited!
She found us a couple of places in Windsor Terrace/Park Slope that are actually reasonable. Keep your fingers crossed for us!

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Good luck!

The economy is making it very hard to get a loan. If you watch the news, it looks easy (and like they are giving the loans away for free), but things really have started changing over the last few months.

The ease of finance is going to depend on how much you are looking to borrow. In addition, we are buying a house...so things may be different than a condo, ect.

When we started our process, the bank agreed for 10% down. Now, 20% down at least is a must and you have to have enough in cash for reserve (usually another 10%) and for closing (which can be pretty pricey).

In terms of offers: we offered 15% less than the seller's price (which had decreased 20% from original asking with the declining market). We settled on 10% less.

thanks again ladies for all your help and advice.
The condos we saw today - some were nice, but not as great as we were hoping for the prices offered.
Its sooo hard!!!!
I'm tired. goodnight.