I am looking at a property this week that I think I will be putting in an offer for. I will be living in this property for a few years and I will eventually rent it out. The house is in the North Texas area above 380. Very minor TLC needs to be done from the looks of it, but I do think that some improvements to the floor plan need to be done initially (I am in a house hacking situation where I need 2 bathrooms, and the house only has 1). Most other improvements can be done over time because I will probably be in this house for 3+ years before renting. This will be my first home purchase, so I want to go in and fully prepared as possible to make this happen. My questions below.
1. There is a comparable house that has sold for $10k less than the asking price of this home, and it was move in ready, slightly bigger, and a garage. How much of a bargaining chip can I use that as for putting in my offer. The house makes sense $5k less than the asking price. Because of the lower offer, I plan to have a very short option period. Anything else I can do to make my offer more attractive while still offering below the asking price?
2. If the offer is not accepted, what is the best way to come in with another offer? (I will only do this below the number that makes sense.)
3. If the offer is accepted and I'm in the option period, I need to find a home inspector and I need a contractor to make a bid. What is the best way to get these done? I've heard that setting up appointments with multiple contractors is smart to account for no shows. Any other strategies? Who else do I need to talk to to make sure I'm able to do the work I need done with the city, what does the contractor know and what should I be responsible for finding on my own.
4. Any other general advice I should know to make sure my offer is attractive, I'm efficient with the option period, or just anything else that will help me make this into a better deal?
The beauty of the option period is that it gives you the unrestricted right to terminate the contract for any reason whatsoever, even if you just change your mind. I would not offer a short option period. The typical option period is 10 days, which is short enough.
If there are similar comps in the neighborhood that are in better condition, bigger, etc., you can certainly use that as a bargaining chip to get a lower price.
Where I think your argument goes off the rails is wanting the seller to subsidize improvements you want to make. The seller doesn't care that you're going to house hack and that you need two bathrooms. And even "needing a little TLC" is subjective.
The bottom line is it all comes down to the demand for the house. If it's been on the market for 150 days with no takers, that's a pretty good sign that's it's overpriced. If it just went on the market, then the seller is probably not in the mood to negotiate.
The #1 rule when dealing with sellers is that they always think their property is worth more than it is.
It sounds like you're not using a Realtor for this transaction. I would suggest that's a mistake. A good Realtor can help you strategize to get the best price you can based on the condition of the property.
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