Making an Offer on Your Louisville, Kentucky Home
Buying Your Louisville Home Below Market Value
When shopping for a primary or secondary home, it is typical for a buyer to have their Louisville realtor show them several properties before making an offer to purchase. Investors commonly view more properties. Most experts agree it takes a lot of determination to find a real "bargain." There are a number of ways to purchase a bargain property; but, like anything else, if it sounds too good to be true, it probably is. Below are a few examples of kinds of properties you may want to assess when shopping for a bargain Louisville property:
- A property that is in need of repair; maybe an estate that has been neglected. You may choose to make improvements and keep it, or resell at a higher price.
- After careful research, you may find a foreclosed property to be a bargain.
- A home that is leftover in a new-home development may be a bargain property.
The Difference Between List Price, Sales Price and Appraised Value
The list price is how much a house is advertised for and may only be an estimate of what a seller would accept for the property. A seller may need to adjust the listing price if there have been no offers within the first couple of months of the property's listing period. For a buyer to determine if the list price is fair, they may want to consult comparable sales prices in the area. The sales price is the amount a property actually sells for. It may be the same as the listing price, higher or lower, depending on how accurately the property was originally priced and market conditions. Your Louisville realtor can help you determine a fair offer price. The appraised value is determined by an appraiser and is based on location, size, type of home, numbers of bedrooms and baths, and condition of the property.
A low-ball offer is a term Louisville realtors use to describe an offer on a house that is substantially less than the asking price. While any offer can be presented, a low-ball offer can poison a prospective sale and discourage the seller from negotiating at all. Unless the property is substantially overpriced, the offer is likely to be rejected. Home sellers often do not take low-ball offers seriously. You should always have your Louisville realtor provide information on comparable homes in the neighborhood before making any offer. It also pays to know something about the seller's motivation. A lower price with a quick closing, for example, may motivate a seller who must move, maybe has another house under contract, or must sell quickly for other reasons.
When writing an offer to purchase a home, there are additional considerations involved:
- If the offer is contingent upon anything, such as the sale of the buyer's current house. If so, even at full-price offer may not be as attractive as an offer without that condition.
- If the offer made on the house is AS IS condition. Does the buyer want the seller to make some repairs or lower the price instead?
- If the offer is an all-cash offer. A cash purchase would mean the buyer has waived the financing contingency and could possibly be prepared for a faster closing date, both of which may better fit the seller's needs. An all-cash offer at less than the asking price may be more desirable to the seller than a full-price offer including a financing contingency.
Contingencies to be Put in an Offer
Most offers include contingencies. One common contingency is a financing contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender. Another common contingency is an inspection contingency, which allows buyers to have professionals inspect the property to the buyer's satisfaction. The offer is likely contingent upon the first appraiser establishing that the value of the property is equal to or greater than the agreed sales price. The purchase contract your Louisville realtor uses should include the seller's responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.
Who Gets the Furnishings?
It is built into the Louisville board contract that fixtures and any kind of personal property that is permanently attached to a house, such as drapery rods, built-in bookcases, tacked-down carpeting and furnace, automatically stay with the house unless specified otherwise in the sales contract. Anything that is not attached to the house may be negotiable. This most often involves appliances that are not built in; for example washer, dryer, and refrigerator. Some sellers will be interested in negotiating for other items as a convenience, possibly a piano. Ask your Louisville realtor to include in the contract anything within reason you would like to remain with the property, often even things attached can later be viewed as a gray area and can cause unnecessary conflict if not specified in the purchase contract.
Is the Seller Obligated to Disclose Pertinent Information About a Property?
The seller is to disclose information on the property he or she is about to sell based solely on the seller's observation and knowledge of the property's condition and improvements made to the property. It is highly recommended that the buyer have the property inspected by qualified inspectors as part of the due diligence agreed in the purchase contract.
Determining the Value of a Troubled Property
Buyers considering a foreclosed property should obtain as much information as possible from the lender, including the range of bids expected and the time-frame for submitting offers. It's also important to examine the property. If you are unable to get inside a foreclosed property, check with surrounding neighbors about the property's condition. It also is possible to do your own cost comparison through researching comparable properties recorded at local county recorder's and assessor's offices.
How to Get What you Want
The more you know about a seller's motivation, the stronger a negotiating position you are in. For example, a seller who must move quickly due to a job transfer may be agreeable to a lower price with a quick closing. Other sellers that may be motivated could include people going through a divorce or who have already purchased another home. Remember, that the listing price is what the seller would like to receive but is not necessarily what they will settle for.
Do I Need an Attorney to Buy a House?
Make sure your Louisville realtor goes over the fine print so you understand all the terms of the contract. In particular, you should be clear on the terms of any contingency clauses that will allow them to back out of the contract. If you have any questions or concerns, it may be advisable to consult an attorney to avoid future legal hassles. In looking for an attorney, ask friends for recommendations or ask your Louisville realtor to recommend several. Call to inquire about fees and to check on their experience. In general, more experienced attorneys will cost more, but real estate fees as a rule are small relative to the cost of the property you are buying.
Your Louisville realtor should go over the purchase contract with you paragraph by paragraph.