I would offer $440,000 and work from there. It sounds like they are not being realistic with the price of the home. A lot of time upgrades don't get you the full return on your money. Some people selling their homes are wearing blinders and can't see their homes for what it is. If you really like the home have the home independently appraised then make your offer. The realistic appraisal might make them see the reality of what their house is really worth.

I.A. Lookin, perhaps I should add that the owner paid $461K when it was built 5 years ago. But they are competing the builder, who is still building in the development. We will be reviewing this home and another over the next day or so and making a decision on where to offer. The other home in the running has 800 more sq ft and is asking only $450K -- in a different development, but still a very nice one. On that one, I wonder why the seller is getting out after only two years in a new home.

We are indeed considering asking to have an appraisal done before offering on the one asking $479K.

The previous owner of our home was in the house for only a year. He was promoted and transferred to another state. There is many reasons why the home owner is selling other than a defective home.

The cash value may very well be $479K, but the market value may be much lower. I wouldn't hesitate to start with $440K.

In newer subdivisions where the builder is still building, it is not unusual for the resale homes to sell for less than the same model new home sold by the builder. This is routine and happens as long as the builder is building out the neighborhood. You can check to see what the discount is in that particular neighborhood by having your Realtor check model matches sold by the builder and then the same model sold as a resale in the neighborhood. This may give you an idea of the average discount the resale buyer receives off the builder price. In any event, I don't think an offer of $440k is too low at all on a list price of $479k. If you end up under contract and the appraisal doesn't support the contract price, it does open up the negotiations again for you and the seller.

Remember: the seller looks at all the terms of the contract. Perhaps there are other attractive features in your offer - like closing date or inspection period or the lender you are using is known to close on time or something else. It isn't always price that makes the strongest offer, but it certainly helps.

Put in the offer. Have your agent submit comps along with the offer. If you really want the house, go above what you think it is worth, just to get it under contract. But be certain that the appraisal is finished during your due diligence period, so you can terminate the contract if the appraisal comes in lower and the seller will not renegotiate.

Also, have your agent contact the listing agent and tell her to let the listing agent know that you are interested in the home, but that your analysis is showing it to be worth $x. A lot of times, the agent will explain that he/she realizes it is overpriced, but this is where the sellers wanted to be. If this is the case, then you have her/him probably going to bat for you with your fair offer.

The first rule of RE, especially in a sellers market, is to get the home under YOUR control, and then worry about the rest of the details while in your due diligence period.

Second rule of RE is to never fall in love with a house. This is a huge financial decision. Finance first, heart second. There is always another one out there. You just don't know about it, yet.

Resales in developments that have not been completed are always difficult to price. There is a market for people who want an almost new house and people who can't wait for a house under construction to be completed. They can be good buys from the standpoint of there is often a lot to do to a newly constructed such as mini blinds, paint, carpeting, lighting fixtures and landscaping. While you shouldn't pay retail for those items, it can be convenient for them to be done by someone else.

NCrealestateguy gave you some good advice. Make the offer contingent on appraisal and be prepared to renegotiate. There is no way I'd pay asking.

@homechef59, you are right; never fall in love with a house. And I wouldn't say I fell in love with it, just like it very much. Haven't lost my head. ;-) There is another home that we also like very much and have been back and forth between the two in our discussions and in our minds.

We have pretty much decided to pursue the other home (more space, lower price), but want to view it again before proceeding. The difficulty is that it is a 7 hour drive and we have some family obligations, concert tickets, and a class to teach for the next week or so.

@ncrealestateguy, it's not clear this is a seller's market. It seems there is a substantial supply, houses are not going within a week or two, and fortunately we are not in a hurry. As I said above, we want to see it again and it's a 7 hour drive. I know some people travel for a weekend and buy a house (my parents did for a job move) or even handle it all long distance, but we aren't those people. We are retired and not under pressure to move right away.

Just curious... where is the house located that it is not a sellers market?

You can probably offer $250 or $300 for the Due Diligence fee. A very small price to pay to get it under your control.

I don't want to be too specific about the city. Southeastern NC, west of Wilmington.

Houses are moving (well, many are, but some are sitting for 100+ days) but there are new ones coming up all the time.

If you do go back to look, I would see what 479k would buy you in a new home in the development to get upgrades of your choice. I suspect they cost more than you think they do. A used home has had time for landscaping to mature. Most people get an appraisal after an offer, for financing. An appraisal before on offer is less meaningful and a bank may require their own appraisal anyway, you would be paying twice for it. And the 2 appraisals may be different from each other. The important appraisal is the one the lender accepts. If an appraisal comes in under, price can be renegotiated. It is nice that you are not in a rush and can take your time. Watching new listings every day will give you an idea what is out there as you get familiar with neighborhoods.

I think an independent appraisal before an offer can be very valuable to a buyer. This is especially pertinent for complex properties or properties with few comps. There are appraisers that have a different product for these pre-purchase appraisals (less expensive and a range of values). It is true that the lender will order their own appraisal after you are under contract at your expense. Other than that, I thin lafdr has a great point. You can re-negotiate the price if the banks appraiser comes in under the contract price. Re-negotiate or cancel the purchase entirely.

In reviewing our options, we have eliminated the overpriced home for reasons unrelated to price (space issue--I've upped the min sq ft in my searches). We had another very good option from that same trip (which has had a $10K drop in asking price since) and two other very good options have come on the market in the past 3 days. We will be going down to look again next week.

When I search on realtor.com with some pretty specific criteria -- price range, SFH, min sq ft, max age, # bedrooms and bathrooms, garage, eliminate pending, etc., more than two dozen resale homes meeting the search criteria come up. Some we have seen and eliminated and others we eliminated without seeing for various reasons. But there are still several good choices.

This is our last home, as far as we know, and we want to make sure it's a really good choice for us. So we are not in a hurry. Maybe annoying for realtors, but we will buy -- maybe even next week -- and are well-qualified buyers.

@lafdr, we could build that home (or even one with 200 or 300 more sq ft ) for the same price or less depending on design choices, and choose our own lot, granite/quartz, cabinets, etc. It's something we have talked about but isn't our first choice because we'd be doing it from a 7 hour drive away.

@ncrealestateguy, are you in the Triangle? When we considered West Cary maybe three years ago, it was a smoking hot market.

No, I work the Charlotte area. Yes, the Triangle is piping hot still. Charlotte is hot too. Especially below the $$300,000 range.

So this is closed. We will look for other homes.

I will repeat it again... The first rule of real estate, especially in a sellers market, is to get the property under YOUR control.

Worry about the details during your due diligence period. If you find something you can't live with during this time, you can terminate the contract for any or no reason and get your Deposit back. You will lose your Due Diligence Fee however. But worth it in circumstances where you don't have enough time to research everything and where properties are going under contract w/in days of going Active.

Yes, ncrealestateguy, I understand what you are saying. One nice home in the area that met our criteria, asking $430K, went under contract in 1 day.

Another home that is very beautiful (but admittedly appears to have drainage and mole cricket issues in the lawn) has been on the market 2 months. But perhaps a home in SE NC at $495K and 3200 sq ft has a more limited buyer market.

One model home we looked at while down there a week ago dropped $30K the day before yesterday from an initial price of $489K. The community is built out and the builder wants to liquidate the models. Ironic they want to unload it but took out the fridge and washer/dryer before putting it up for sale.

It's hard being 7 hours away. We can't run down for every nice home that comes on the market. We are serious and well-qualified buyers. We just need to find the right home at the right time. I don't believe there is "The One" but we don't want to talk ourselves into something just because it's a PITA to buy long distance.

" It's hard being 7 hours away. We can't run down for every nice home that comes on the market."

I am retired military. Each and every time we moved, I had no paid house-hunting trips, no days off to house hunt, and no reimbursement for expenses associated with closing - at either end.

Oh, did I mention, no internet.

You should be able to figure it out! lol

Stax, I'm sure we will. My mother chose a house in a 3-day trip when my parents relocated for Dad's job. We aren't in a hurry, and it's our last home. I think we'll go down for a week in March and put this to bed.