lwb,

market value=transacted value? is this caused by the last house sold in the area with a particular price, which set the margin for the market value?

when i met with the seller's cousin, apparently the owner has already migrated overseas....we agreed on the selling price on the next day...and from that day onwards the "cousin" was very pushy about the getting the deposit ASAP. I almost gave the deposit but decided on engaging a lawyer first. The "cousin" almost flipped. Which did not give me time to get a pre-approve loan. Now i know y the need of a pre-approve loan, it's to get the property market value and whether i am eligible for the loan.

which came back to my post above.

thanks for the input

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Added on April 30, 2009, 10:45 amthe earnest money is the deposit rite?
I had already stopped the lawyer from transferring the money to the vendor's lawyer....and have not signed any letter of offer or what not yet. Will i still lose the deposit?

and i doubt that the "cousin/agent" would want to budge from the price to come down to market price.

thanks

This post has been edited by WildChai: Apr 30 2009, 10:49 AM

Did you pass the money earlier to the agent?
That is earnest.

Nope, i passed it to my lawyer...my lawyer will transfer the money to their lawyer.

Oh? you passed the earnest to your lawyer? Usually buyer will pay earnest to the agent as booking, and that money is paid as their commission. Am I right?

Wow, your agent really lack of experience.

If you didn't pay to agent, you have the bargaining power to reduce the price downwards. Since involving your lawyer, if he didn't do any paperwork, I doubt you will need to pay him much.

First - and only - thing - are you willing to pay seller's price for the house???

If you are not (and it sounds like it), walk away from the deal or negotiate with seller for lower price.

It doesn't matter whether bank/valuer/agent says this house worth $$$, if your parents/grandparents/brother/sister stays next door wouldn't you pay extra $$$ for the property?

As always, buying a house is a willing buyer/seller agreement - both agree on a price. It doesn't matter that the house next street is selling above or below what you've agreed on - it all depends on whether you are WILLING to pay that amount for that property.

So in other words, we can actually bypass the earnest to lawyer and still sign booking agreement?
hhmm.. but after signing the agreement, we still have no power to bargain further as it's stated black and white.. correct me if I'm wrong

I must have been sending the wrong signals....i was taken aback when i heard about the market value of the property.

But I am willing to purchase the house cos the area and we really love the house.

True of what cwtien says...a person will buy even an expensive property above market value if they are willing and think it's worth it.

You still can bargain if the other party is willing to, even if you had signed the agreement.
Expect them to give you black face.

Personally, I would not pay RM 480k for a house whose market value is around RM420k, no matter how much I like the house. A house is a big investment, and we must not let emotions cloud the decision.

Unless the area is very hot, there is is limited supply, and you expect prices to go up fast, do not pay above market value .

Since you have not paid the earnest deposit, negotiate further until it is close to fair market price.

The RM 30-40K you save from lowering the price...will go a long way towards renovating and furnishing the house, so negotiate for all its worth!

This post has been edited by gilabola: May 2 2009, 02:28 AM

Agree with gilabola.

Say what u like - when u buy a house for own stay / investment - it will still involve equity build up over time, coupled with hopefully a decent rate of appreciation.

Why on earth are u screwing yourself over by paying a higher "entry" price - no matter how much "you love" the neighbourhood? My 2 cents - you have become a motivated buyer....this is a position you DO NOT want to be in. Yes - it's a willing buyer & seller basis - but u do not even realise that u r signing up for an inequitable deal, because u r so vested emotionally.

If Pai was the seller of the house you wanted - he'll clean out your bank account nicely. And you still think that this is justifiable under a so-called "willing buyer & seller basis"? Even though 40K to 50K may be chump change to you....take your time to think through rationally, chief.

I agree too.
Getting entry price so high and fork up another amount of money for renovation (as different people has different taste), will get you hard to sell it away in the future. You may say you love the house and wish to stay forever, but who knows in the future?

this is concept of "marked to market".. a concrete house value can only be grasp with an actual transacted deal.. hence the concept of "willing buyer, willing seller"..

should either one of them don't agree with the price, the deal is off.. however, marking to market happens at a given time.

of course there're silly deals ("gosh, i so love this house that i'm willing to pay 1 million even if it's worth $420k"... does happens). and naturally, a shift to test a new price will emerge.

of course.. an irrational "willing buyer" does not represent the entire market and soon enough, the market will identify the $1 million as an anomaly.. fluctuations and gyrates back at the sub $400k range.

but all these have nothing to do with a pre-approved loan.. (as you've found out.. it's a good sanity check, it's like having a gate-keeper to remind you, should you someday take that $1 million silly deal.. even though you can afford it.. the bank will still "sound" you a bit then let you pass..)

if you're a bit tight on fundings.. pre-approved loans will help you lessen the probability of loosing your earnest money/deposit just because you failed to secure the loan facility later on..

oh, one more thing.. when money is passed from lawyer to lawyer.. ask them about the escrow account.. (this is not some left-pocket, right-pocket hanky panky account)..

lastly, i'm glad you learnt something, even though via unpleasantness. the best teachers in life usually come disguised in retrospective forms (e.g failures, mistakes.. fubar-ed!)

.. a true one on displaying too much interest revealing oneself as the motivated buyer/seller. for there're many barracudas lurking around for distressed situation (.. i'm one of them )

thus the ability to appear indifferent can be an advantage.. you may like the asset concerned, but your body language appears to be neutral.. agents are taught to sniff/detect such body languages.. and caters to the situation. an indifferent demeanor makes it hard to read you.. a good place to learn this skill is take an observation tour at a casino.

well, on the bright side, you can treat your "premium" paid to the house as some "tertiary education - from the school of hard knocks in investment" and remember it dearly for the rest of your life.. a $40k-50k is definitely worth paying if can help prevents a $4-5 million mistakes down in the future!!

... if you happen to take in too much loan.. one barracuda will be trailing you closely *lol* (remember your sanity check)

This post has been edited by lwb: May 7 2009, 12:14 AM