Congratulations on purchasing a new home! That is awesome, I am so excited for you. It is a good market to buy. In a "normal" market I probably would advise against shopping in a price range above your budget because you'll be setting yourself up for disappointment, however, in a down market like this I don't see a problem.
I am not familiar with your area but where I live people look and accept almost any offer. It's the difference between not selling at all or selling at a loss or for some lucky ones selling for less of a profit.
If would try find out
- What has sold in that neighborhood in the last 2 to 3 months?
- Were those prices lower than 6 months ago (declining market?) and if so, how much?
- What is the home owner's motivation? Distress sale? Relocation? Foreclosure?
- Is this a bank owned home?
- How much does the owner owe on the mortgage?
- How much is the actual cost of repair (estimate on the high side)?
There is a distinct difference between the listing price and the actual value of the home. Market value of a home will be what a ready, willing and able buyer is willing to pay for a house at a certain location, in a certain condition, in a certain market. Unless a house is listed grossly overpriced I do not believe that you will find a home that you can buy 50 % under market value, the listing price really is meaningless.
What I mean by that is if there is a house on the market for sale and a similar home down the street has sold for say $ 350k, it is VERY unlikely that you will get the home for $ 175k, even if it is a foreclosure or distress sale. People and banks will sell for 10 or maybe even 20 % below what a comparable home has sold for if they have an offer from a strong buyer (meaning either cash funds or verifiably qualified by a lender) who can close fast and doesn't have many contingencies.
If that same house is listed $ 450k, yeah, you can get it 50 % below the listing price. Therefore, it is really important to know what the homes in the neighborhood have sold for.
If you want a really good deal I would suggest that you have to be prepared to play hardball and be willing to walk away. Aside from the occassional exception the seller will work with you.
As to real estate agents, I think a good real estate agent will be worth every penny, saving you a lot of money and headache, a bad real estate agent .... ummmh run, far and fast.
Real estate agents can help you find the home, find good deals, educate you about the market, the contract, home inspections, the escrow, ensure a smooth transaction and everything that goes into buying a house and beyond.
You have to find the one that is more concerned about doing what is right for their client and the client being taken care of. And stay away from the ones whose primary concern is their commission check. It is not always easy to separate the good from the bad.
It doesn't cost you as the buyer anything to be represented by a real estate agent. I would definitely meet with a few agents for a buyer consultation, at the very least you get more information about the home buying process, the current market, you can pick their brain and see how you go from there. Getting more information is always a good thing
I don't want to get too long winded here and tell you things that you may already know but I will be happy to answer any questions, either here on the forum or feel free to PM me.
Disclaimer: I have been a real estate agent for the past 11 years in Arizona. I am not familiar with your area although the real estate is practiced very similar in CA and AZ.