I know there are a million other factors, but just getting an idea based on the current market (low demand, high supply). Feel free to respond besides just the vote with reasons/explination. Especially looking for anyone who has bought in the last 6 months, did you offer under asking? if so, was it immediatly accepted, etc.

 

depends on your local market. We bid 10% under and got it.

 

did you bid 10% under appraised value, thus obtaining 10% equity?

 

10% under asking. Bank appraised just above asking. Comp down the street sold for 125k more the same week.

 

My father picked up 2 houses in Florida a week ago and his initial offer was approx 20% below asking price on each one.
Granted, he didn't get them both that cheap but ended up with a couple steals with gulf access.

- I offered @12% below asking price on my current home, but that was quite a few years ago.

Edit: He countered each time less than the counter offer the banks wanted. It doesn't cost anything until you sign the papers.

 

It depends upon the area.

Your local appraiser can tell you the normal percentage above/below listed price that most homes sell for.

In my are most homes sell for 95-97% of listed price.

 

location location location
in vegas or modesto, you can probably go 20% under and they'll accept.
in marin, CA they'll laugh at you if you go 1% under

 

Has anyone heard of anyone picking up places at 80% of appraised value? Thus making the 20% down unnecessary?

 

i don't think it works quite like that unless you have perfect credit and use a business loan of some sort.....

I am pretty sure conventional lending is based on purchase price..... especially with all of the foreclosures......

 

Yes, the loan (and downpayment) is based upon the sales price or appraisal WHICHEVER IS LESS.

Have you been reading about the foreclosures in many areas? It's due to sh*t just like that.

They are tightening up on downpayments and credit scores. I just got a memo yesterday that Mortgage Insurance (what allows you to buy a house with less than 20% down) is starting to require a 680 credit score if you put 10% or less down and a 620 score if you put more than 10% down.

6 months ago a 620 score would have gotten you a 97%-100% loan.

I've seen this happen several times. No one ever changes the mortgage approval guidelines a little, it's always a lot. They go from too liberal to too restrictive.

Back in the 70's FHA had a program that let you get into a house for $300 plus your prepaids which were about $1,000 and then they subsidized your payments so that they didnt' get above $300 a month. There were literally whole neighborhoods foreclosed upon and bulldozed. It destroyed the economy for years!

I bought one of those and in a 600+ home neighborhood after 2 years my house was the only one occupied. I had to let it go back because I couldn't sell it. Who in their right mind would live in a ghost town?