How much to bid?

[Reenie]

How do you know, other than past sales, how much to bid? The past sales don't take into account the amount of work a place needs (or doesn't need, hopefully ;) ), so I was wondering if there are other things we can factor in?

[Sevilla]

When we bought our house our realtor said that for our area it was customary to bid initially for 93% of the listing price.

[camberne]

ABSOLUTELY -

* Age of the major systems in the house - especially HVAC (heat/air conditioning)
* Types of piping throughout the house - copper and PVC is what you want (steel piping=BAD)
* Age of the roof and whether it has already been re-shingled over (You can reshingle once over the existing shingles, then you will have to do a complete tear-off and reroof). Roofs generally last 20-25 years.

Types of flooring... carpet/linoleum/vct (vinyl composite tile) is base value and cheap. Ceramic tile, wood flooring, laminate flooring, marble are all nice upgrades.

[PG-rated]

When we bought our house our realtor said that for our area it was customary to bid initially for 93% of the listing price.
I'd be careful about listening to your realtor on this subject, because the more you pay for your house, the higher his/her commission is. My mom bid 92% of the list price for the house she bought a few years ago (when the market was pretty hot, but not totally insane). The realtor wanted her to bid more, and cautioned that she might lose the house if she didn't. They accepted immediately (no counter-offer), which to me says she could've gone at least $10,000 lower and still ended up with the house.

[camberne]

Wow, you guys are lucky if you're getting stuff below the listing price. Everything around here there are bidding wars for... and people have been paying more than the houses actually appraise for - taking signature loans out for what the mortgage company won't finance!!

[Reenie]

Oh, thank you so much! I appreciate all of the answers, especially about the pipes and the percentages. We are going to see a 1/2 duplex in a little over an hour, and I love, love, LOVE the look outside. It has hardwood floors, and the roof, HVAC, hot water heater, and windows were all replaced "within last 15 years" (it is an older structure). It is brick. These things are good, and I'll definitely ask about the pipes (and I know how much may be a good bid based on percentage ;) ). Thanks again! :)

[boilermaker]

When we bought our house our realtor said that for our area it was customary to bid initially for 93% of the listing price.

The biggest problem I see with this is that you are assuming the sellers and listing agent knew what they were doing when pricing the house. That is a big assumption I think.

As for what to bid, I think there are a few major things to take into account:

What is going on in your area?
In some places, every house that comes on the market ends up in a bidding war, so you want to bid accordingly (typically higher than the list price even). But in most areas, you can bid beneath the list price and then negotiate.

What have similar houses sold for in the past few years in the area and how does the size/condition of your house compare to those?
When looking at comps, you have to take into account everything from hardwood floors to landscaping to new furnace, etc. Your real estate agent should know the basic conditions of the homes that you are comping and help you out here.

How bad do you want the house?
To me, I'd rather get a good deal on a good house than pay more for a great house, but some people are the opposite and that is ok as well. If the real estate market is not booming in your area, I'd take a chance and bid low, let the sellers counter, then you can counter again. On our current home, we countered back and forth for a month...and got a great deal :)

For what it is worth, we got our house at 91% of the list price. We started the bidding at 88%.