About 4 months ago I found a condo I liked near the high end yet within my budget. I had been following the pricing and was kinda perplexed as it went from $430k to $435k a month later and then down to $432k after 6 weeks where it sat for about 6 months.

I came in at $399K expecting to haggle a bit. I was told the owner had two loans on the place and could not afford it and was hoping to avoid foreclosure, though not there yet. She wouldnt accept under $424K- the exact amount needed to pay off both loans.

The typical negotiations ensued and I ended up walking away. Fast forward another 4 months and I noticed its on the market still, and the price was dropped to $399K. Any tips on an offer? I would like to buy it, and i know her need to sell quickly. Do I have any additional negotiating power here? What would a good "first" offer be here? She will clearly see its the same person, so i dont want to look like i am in love with the place and must have it. It was the nicest place ive looked at, but im fine waiting it out how ever long it takes to find something great.

Offer 350 and a note that says "Shoulda took 400 the first time, bitch"

It's impossible not to read this in Jesse Pinkman's voice.

Where are you looking to buy this condo?

Honestly I would probably hold off for now. Nobody knows where the market is going and condos will take longer than a SF/TH to come back up in value. I've got a condo outside of Arlington that I'm losing a few hundred a month on and wish I never bought it.

I've got a friend who bought his condo for $420 during the peak of the housing boom. By the time it was built it was only worth $350. And now it's even less than that. It's going to take him a long time to break even on it so now he's stuck even though him and his wife make good cash they can't move out to a house bc they can't afford taking a 100k hit. The building has been finished for 4 years now and it's still got empty units.

I would try to find an agent who has experience with foreclosures. Find out what exactly will happen if it goes into foreclosure, how long it would take before you would be able to buy it out of foreclosure, how much you could likely buy it for, and what the chances are that you could get it at all versus someone else getting it without it ever being offered for sale on the open market.

Weigh all of that, and make another offer. Lowball the offer though. Look to get a fantastic deal or walk away. If you do your homework in this market you can get GREAT deals.

Long answer, which is a list of questions you ought to address before developing an offer strategy:

What are similar condos selling for in the area? How does this one compare? What other units are for sale nearby in similar price ranges and how do they compare? How many days on market are typical for this type of property in the area? What % of asking price are they typically selling for? Are you buying private party, is it listed with a brokerage, are you using a buyer agent yourself or going through her agent? How fast can you close, how much down payment will you do or are you buying all cash and if so do you have proof of funds? If a loan do you have a good preapproval letter to submit with the offer? Any contingencies, like you need to sell something else first? Will you want/need an option contract, and if so what $ consideration will you pay for the option? What is the history of this listing and any offers she's had? Was it ever under contract, and if so what happened? Will it be a short sale? Is it about to be foreclosed on and you can wait and try to snatch it up then for less? Have you examined a title abstract? Who's her lender/s? Is your state one of those recently attempting to halt foreclosures? How does this condo complex compare to others nearby in terms of unsold units if any? How healthy is the HOA? Reserves, special assessments, lawsuits, approved for FHA, etc? HOA still controlled by developer, or handed over to residents? Hmm, that's a lot I think I'll quit now.

Short answer/shot in the dark:
Prob offer 90% of asking price with 30-day close and preapproval for an 80-10-10 loan 30/15 loan.

definitely offer under the asking price. how much is up to you. also get cash towards closing costs

"Lowball" means different things to different people but when a property is being sold by an owner-occupant, going too low will sabotage your ability to get their lowest price.

IOW if a place is listed at 1,000,000 and seller will take 900,000 as their lowest bottom dollar price, if you come in and offer a ridiculous sum like 500,000 you're likely to alienate the seller who will dig in and not budge much because they think you're a jerk or unreasonable or not serious, compared to if you came in and offered 850,000 in which case you'll have an excellent chance of getting the place for their low price of 900,000.

This is not as much the case when the seller is highly experienced as is the case with institutional investors or REOs, but it still does apply somewhat.

Why are you advising OP to get cash towards closing costs? It's not like it's free money. Seller will look at the net proceeds of the sale, and simply subtract the closing costs expense from the offer price to look at the true offer (eg. offer of 1,000,000 with 1,000 in seller-paid closing costs = a 999,000 offer). This is why appraisers look at seller-paids when considering comps.

Furthermore, asking for assistance with closing costs on a non-FHA or non-Fannie loan can have the effect of making a buyer look like they are having difficulty with finances and as a result the seller often concludes the buyer is somewhat more unlikely than average to be able to actually close on the loan, and the seller typically mitigates this extra risk by not negotiating as liberally on the sale price. In short, your strategy can end up costing OP money, and if OP doesn't need assistance with closing costs then OP should prob not ask for it.

Also try to find out how much the condo fees have gone up over the past few years. The condo I bought initially was $280 a month (included water and electricity) and is now over $450 a month and they haven't been making any major upgrades to justify the rate increases. Some places just look to rip you off knowing you have no option but to take it in the rear.

Also factor in how long you want to live there and if your plan is to rent it out eventually then look and see what people are renting theirs out for. Like others have said, hold out until you get an amazing deal. If this is like any other condo building then there are probably a bunch of people looking to sell, all you have to do is be patient and wait for the right opportunity.

You do realize it's your association run by you, the residents ... right? It costs what it costs to run an association. If you don't like it, then attend meetings and vote and try to get consensus on cost-cutting measures.

Lots of solid advice in this thread. Im looking here around Mt Vernon Sq in DC where i currently rent. love the area and would like to own, but its by no means pressing. im dreading an actual move, but if the place is right, will obviously hop on it.

gt_ie makes the point of finding a realtor who is experienced here. I was working with a real nice guy. has a JD so could also offer any legal advice i may also need. is it worth it to find a new realtor who may specialize in foreclosures if the property is not yet there? i feel bad as this guy has driven me to a ton of properties, but i guess its not so bad because we have been in 2 Land Rovers and a Benz.

I dont know what loan he is getting or how much money he has for a downpayment

my point is it's a buyers market right now and he has an upper hand in negotiations. closing costs are sky high where I live so people asking for sellers concessions is pretty common

haha that lady is so kicking herself now.


do not buy.

Is DC a non-recourse jurisdiction?

That will make a major difference in her willingness to sell for substantially less than she owes. If non-recourse and she actually owes $424k then you have a lot less of a chance of moving her down.

In before haggling is unbecoming.

curious what the price per square foot was? link to MLS listing too would be cool

Look at all the comp sales from the last 3 months and then offer ~5% lower than the average comp sale.

http://franklymls.com/

This site is an invaluable when selecting a realtor in the DC, NoVa and MD. You can query by realtor name and quickly find out the volume of houses they are buying/selling, if they have experience with foreclosures and short sales and if they have knowledge in the areas you are searching. We ended selecting our realtor, in part, because she had experience with all types of sales in the areas we were looking and was handling about 1 transaction per month so we knew she could spend ample time with us.

Offer 385?

offer bout tree fiddy

I have to agree with the poster who said it was bad to go in too low. I would start at 368,000 and then when she signs it back make one final offer at 375,000. Properties don't go for that much under the market value in most cases.

I don't know the situation in DC, is the market in a slump? Does your realtor think the property was overpriced before? Do you think its overpriced?

THe fact that she will see your name, you have to get your agent to let them know that either your financial situation has changed or that you were over your budget before but were only approved for a smaller mortgage now that rates have changed (or some babble)

That site's really interesting and refreshing.

How do you parse agents to see who has experience in a certain field, or # of sales, etc? I fooled around for a bit and couldn't see how to do that.

I actually started with a list of possible realtors as I had amassed a sizeable collection of business cards from visiting open houses sans buyer's agent. After I came up with a short-list of potentials I queried their names (selecting both "solds" check boxes) to view their past sales and purchases. From the results screen the map can tell you where their transactions took place and you if you dig around the individual transactions to find specifics about their sales/purchases.

I also find that this site comes in handy when you are ready to put in an offer on a place as you can do some research on the listing agent.