On Mar 14, 7:55*pm, dpb wrote:
wrote:
I'm interested in buying a home in IL, first time home buyer.
There is a home came out as fair condition and is priced $195000.
My realtor said it is 'a bit under priced' didn't exactly mention how
much.

I suppose he wouldn't since his commission is a percentage...

You _do_ have legal representation, right?

My realtor wants me to put as much earnest money as possible to get it
closed as quickly as possible.
He also believes that will help him for negotiation process.

In this market condition - I heard it is buyers market, what is the
reasonal amount for earnest money?

Earnest money isn't required to make a bona fide offer of whatever level
you should choose. *That can be arranged during the negotiations as part
of the seller's acceptance/rejection process.

There are too many variables to be able to say anything at all other
than you're way too green going here -- you should at a minimum research
what other houses in the area have sold recently and for what price.
How long has this particular property been listed? *How long did
comparable properties take to sell?

W/O knowing anything at all about the area you're in, it's impossible
for anybody here to even hazard a guess as to how depressed the housing
market is there at whatever price range. *Some areas are in the dumper,
others have seen very little impact.

Do you think that I could demand lower than or around $180,000?

You can't "demand" anything -- you can make an offer of whatever you
choose and the broker has to tender it. *They can reject it outright,
counter-offer or accept. *Your move again.

Ever hear of Bruce Williams on evening talk radio? *He's great at
fleshing out the details and the pitfalls. *He's got a book altho I've
not seen it--if you can find the show, call and ask your questions--but
have a reasonably thick skin; he doesn't suffer fools easily! *

--
Wow, so many feedbacks with great insights..
This is certainly more than I expected. Thank you so much all of you
for sharing your thoughts on my somewhat 'vague' question..
I thought this group posting works like a thread that I could post my
message that everyone can see at the same time,
but doesn't seem that it works that way, so I'll just write up one
message and make it as reply for everyone who answered my question.

first of all, i think i somehow delivered negative impression on my
realtor (after revising the initial post, i kinda felt it and deleted
right away and posted another one after this, and there were some
people who already answered on my questions.. Thank you so much! )

My realtor is actually my friend since college.. I think he wouldn't
do anything fishy to take advantage over me or this situation.
He even let me use his search engine for realtors, so I could search
houses in my flavors - that website showed a lot more info that
wouldn't be available in the public, including the realtors' cut or
extra bonus upon closing certain houses - I tried not to pay attention
on those 'secretive' info since that was either none of my intention
or business..One thing I want to double check though is that even if
he wants to deliver best deal to me, what if he couldn't deliever it
due to his lack of knowledge or experience, OR the way he practices
isn't something that is widly accepted.. So, I decided to post a
question here before making any major move.

I've seen around 35 to 40 houses.. mostly town houses. (it is
difficult to buy a single house with under 200000 around the town I am
at)
The house came out is a Duplex (town house with two units) that I
don't have to pay association fee (which is attractive feature to me)
This house I am thinking about submitting proposal in fits my
situation in many aspects,
it is closer to my work than other houses that i've seen..(if i move
close to my work, houses become too expensive, difficult for me to
afford; if I move farther away,
I tend to get more square footage and newer and nicer houses, however
I will have to drive 3 to 4 extra miles)
also, there are many strip malls and stores nearby..if i go up further
north, there are more farm lands than stores..
I looked around the house today, and it was the house that was owned
by the original buyer for 17 years. My friend explained that
if one person owns a house for long time, we wouldn't find much update
or renovation inside and that sounded true. roofing appeared to be
fair condition though.
the house overall was neatly kept and clean. It didn't appear that it
requires any major work..

a month ago, there was a house came out a block away from this one I
am now interested.
The house was a second away to go through foreclosure..was taken by
bank, not the owner.
the price was $179900. The house was in really good shape (which was
hard to believe; a house in pre-foreclosure status was usually in very
bad shape, after few occassions of seeing several houses with big
holes in the wall and with ceiling falling down, this came as big
surprise) though the owner or someone took away refregerator and
washer and dryer..even with that the house seems so attractive with
its square footage and overall condition. My realtor pulled out CMA
report on that house and it was sold at $260000 2 or 3 years ago,
initially came out as $270000 a year and a half ago, and now it was
captivated by a bank and priced $179900.
I put my proposal in with 181000 with putting down $1000 as earnest
money. My friend was doubtful about this move since there was already
competition on that house (when we arrieved, there was already one
agent showing that house around and saw another family coming in
though it's been out only 5 days), earnest money is too little,
(according to my friend, banks wouldn't bother to review the offers
when a house that was captured is in good condition and earnest money
is too little, they would look for $5000 as minimum) Later I read this
artical which says that if you are going to put more than 3% as
downpayment, there is no reason not to put more for earnest money
because the amount of money stands out and make you as a serious buyer
and put you in better position on negotiation process. My question
was more like If $5000 large enough to make my position as committed
buyer when my purchasing property is about 200000, so a little more
than 2.5%.

My offer was rejected and later I was told from my friend that the
house is going through contract with another guy. (my friend told me
10 people including me made an offer and i don't know at how much it
was sold, my friend thinks it must be sold at way more than 180000,
probably over 200000).

Now, this house came out, from a block away, is priced 195000.
compared to the other one, the overall condition for this one is
worse. Still my friend thinks that this house is a bit under priced.
my friend sent me an email hours ago with the info of the houses in
the neighborhood which are still active in listing or the ones that
were sold in last 12 months. There were about 10 houses and mostly
were sold higher than this one or still priced more expensive than
195000, so I think my friend is right.
However, my concern is that what if this bear housing market's overall
discount rate wasn't really reflected on this neighborhood? I
overheard it is common pratice to buy a house with 5% discounted rate
when the market is OK. Right now, everyone knows that it is rock
bottom for housing industry and I was hoping maybe I could buy a house
with at least 10 to 15% discount.. I definitely want to take advantage
of this interest rate, thinking about wait until FRB's new rate cut,
which is expected on 18th this month..by making my rate float even
after making a offer. That's one of the reason why I want to put this
process an end asap.

wow, this is such a long email, as i was writing this reply, i was
able to sum up my situation and partially was able to answer my own
question..Overall, I guess doing this was worth it. Thank you so much
all of you for sharing your thought and reading this long message!