OT Need a little advice..

Housing prices are going to fall a bunch more before they bottom out.Its a buyers market thats only going to get better in the next 1-2 years.

Currently houses are overvalued by as much as 60% in California.The least overvaluation is 15% in the Midwest.I live in the 15% area and houses are selling poorly.

Never buy a house that costs more than 3 times your families annual income.

Good Luck.

My next take on it is your financial situation. If you want the place and have the money, so what if it appraises more or less. All an appraisal is, is someones educated guess on what a property is worth. Its real value isnt known unless you have a no reserve public auction, properly advertised.

Me personally, I've bought property at 10 times the appraised price because it was worth that to me. Thing was, I had cash money to buy it, no way a bank would have loaned me 10x the purchase. I've also low-balled stale property. I've also walked away from a lot of deals. Most times I like to low-ball property, stick to my guns through one or two expirations of my offer and then see what happens. Sometimes though, a deal is too good to be true. When the farm accross the road from me went on the market, I offered list price for it, sight unseen on the house. The price was fair. Good thing too, it went up on a Saturday and there were 5 offers to buy at list by Monday, mine was first.

I dont know whats been done or said so far in your negotiations but if you want it, I'd say make an offer for 85% appraised value to your realtor and put some serious earnest money behind it, good 30 days. Use your 30 days to start looking for something else.

It is a buyers market everywhere these days. Are you the motavated buyer? Or is she the motavated Seller.

1) Get your own Real Estate Agent. Prefferabily at a different company than the seller.

2) Lowball the offer if you want so you have some room to move. But make it reasonable. Let the agents do their work. Remember they do not get paid unless a deal goes through. The housing market is so bad right now let the hungry agent who is about to miss his own payments put the pressure on her to tell her she is being un-realisitic.

Remember the golden rule... And as the buyer you have the gold.

Over the past 7 years I have had 2 appraisals, one for the initial mortgage and one for a refinance. Both appriasals were for 80 to 85% of what I had put into the house and for what other houses in the neighborhood were selling for. The first appraiser didn't even come in the house. The second did but it was obvious he didn't know what he was doing. He couldn't even figure the square footage with a set of plans in his hands that I gave him. All they were interested in was making sure that the value of the loan was covered.

Since my loan was only for about 40% of what I could sell the house for they of course covered the loan value with a very conservative estimate.

What I'm saying is that the appraiser may be underestimating the true market value of your house.

slim

A house is one of, if not THE biggest single investment most people ever make. Buying at higher than appraised value will start you off with negative equity. NOT a good way to invest. God forbid anything going wrong in your life, but should events force a sale of the property any time soon, you'll be unlikely to recover your investment. There's a BUNCH of folks in this country suffering through that "upside down" equity situation right now. Go ask any of those folks what they think about paying more for a house than it's actually worth.

Got to www.trulia.com/ and enter the are of interest zip code to find more property in your area.

Often, the seller would carry a second mortgage to make up the difference. Or you may have a seller who doesn't mind considerably more time on the market. You thought the price was good when you offered the contract, inspections came out OK, so the only real problem is financing.

Don't worry about that $1200. Is the property worth the agreed price to you?

When we purchased our acreage it had been listed for upwards of a year, when things were generally selling briskly. It was over-priced.

But it was exactly what we wanted and we didn't have any other property to look at that was attractive to us. We agreed to pay more than what I knew market value to be, as we weren't normal buyers with other offers to make.

That was 1988, and one of the better decisions we ever made. Now worth many times what we paid. That initial 15% extra we paid really isn't important, but we had seller financing.

If there are significant issues with the place that weren't apparent when you made your offer but were found during the inspection, then the owner should be willing to negotiate on the price. But my personal experience with home inspectors is that most are frauds who couldn't find a rotten timber if it fell on their heads.

Did the appraiser take into consideration the things that were important to you? Namely, tractor storage and horse shelter? If the "comps" (comparable properties) didn't have these features, then the appraisal is worthless. Make the appraiser do his job and come up with properties that are truly comparable, not simply whatever was easy for him to use.

One other question, will this be a starter home or investment property? Basically, do you plan on selling the home in a couple of years? If this is the case, walk away. With the market the way it is right now you will probably not recover the extra cost. However if you are like me and plan to never move again, the extra upfront cost will be trivial over the life of the morgage.

Are you using a realtor or trying to buy direct. We have always used a realtor when buying or selling and we have been been able to negotiate with him on his comission.

steveormary