Expert: Hans Weber, Licensed Broker Associate - 11/13/2004

Question
I am currently going to bid on a house for investment. What is the best bargaining tool for me to use. I know that the house is in great need of repairs but most people think that their home is worth more than what it is worth.The appraisal came in at 171k and I want to offer 120-135k. Is this out of line?
Anna

Answer
Hi Anna,

Thank you for your question.

Was the appraisal done by a real estate agent or by an appraiser?  Is the $171,000 valuation in the condition the house is in now?  What are the values of the other houses in the neighborhood?  What is the overall real estate market like?

If the appraisal is for as is now condition and other houses in the neighborhood are of higher value then you should offer much closer to the appraised value price.  The seller would not consider such a low offer as serious, unless of course, you are in a severely depressed area with no buyers and declining values.

If the house was ion the market for $129,000 would there be many buyers bidding on it?

Once the house is renovated, how much is it worth?

These are all things to consider.

Hope this was helpful.
Hans