Submitting an Offer on a New Home

[rdgallo]

My wife and I just looked at a really nice newly constructed home and would like to make an offer on it. They are asking $314,900 for it. I don't want to make an embarassing offer and insult the seller, but also want to get a fair deal. Can anyone experienced in this please tell me what would be a decent opening offer for a new house at this price? I sure would appreciate any comments and help. We haven't purchased a house in over 27 years and would really like to do it correctly without insulting the contractor.

Thanks in advance!

[concretemasonry]

Why are you concerned with insulting the contractor? - Is he closely related? Contractors have very thick skin and expect to be insulted, especially if it is a spec home built in a down market.

Offer 10 or 20% less and see his reaction. He may not be insulted if you have financing in advance.

[rdgallo]

Thanks, Concrete. I was thinking of offering at least 10% less. I have another question that you may or may not have the answer to, but I will ask anyway. This house has a place for a sump pump, but no pump or piping is there. I asked the realtor about it and she said I would really not need a pump as the basement is in a sandy location and would never get water in it anyway. I think if I make an offer on this I will make part of my offer state that a sump pump and plumbing must be in place and operational as part of the purchase. I can't belive having a hole for the pump and no pump is really a cool idea.

Thanks Again!!

[AustinRealEstate]

If you are arbitrarily making a 10-20% deduction in the offer based on the also possibly arbitrary list price how can you be sure that you are getting a good deal. E.g. what if the seller raised the price 40% and you got 20% off? You still got reamed 20%.

The correct way, in my opinion, to value a home is with comparable sales. Comparable sales are the terms that other buyers and sellers have been willing to transact business using. That is in the last 6 months, how much have other new homes of similar sq ft and location sold for?

Some sellers are typical used car dealers who inflate their prices a lot, others are the saturns of real estate with no haggle pricing. Using an arbitrary number is no good for you or the seller.

Joe

[barrydalive1]

Why are you concerned with insulting the contractor? - Is he closely related? Contractors have very thick skin and expect to be insulted, especially if it is a spec home built in a down market.

Offer 10 or 20% less and see his reaction. He may not be insulted if you have financing in advance.

He shouldn't be insulted at all. Especially if you do end up offering advanced financing.

[dantheman9727]

In these times, it is not unreasonable to offer 20% less and see what they say. If they don't show any interest than you can go back at 10%, but the last thing you want to do is over pay and instantly lose out.