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Old 08-01-2008, 07:34 PM
 
335 posts, read 932,827 times
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Quote:
Originally Posted by TomMoser View Post
This is a good point. I have turned down many listings in this market for this reason. If a home seller is unrealistic it is not worth it to spend my time and money trying to sell their home.

The flip side of this is also true. There are many buyers out there right now throwing around unrealisticly lowball offers that don't have a chance of getting accepted. I refuse to work with these people, too.

Tom,

How are you categorizing "unrealisticaly lowball offers"? There are "lowball" offers that are grounded in realistic market values based on historical valuations, current comps etc....

Here's a real example:

Someone I know bought house and property in 2006 for say $825k (for investment flipping) - - and for whatever reason, the renovations weren't done and the house sat vacant and is currently in relatively poor condition (nice plot and great area tho). A prospective buyer offered a 30%-40% off-list "lowball" because they crunched the comps (comps couched in current nearby sales in similar condition) - - and coupled with the basic repair/renovation costs (architectural envelope, not decorative) - - determined that their -30/40% offer was in-fact the "fair market value" for this house - - is that an "unrealistic lowball offer" in your opinion?

In other words, if a "lowball offer" is offered up to you and couched in thoughtful rationale with facts/figures to defend it, would you still deem this an "unrealistic lowball" because it is still a "whopping" -30/40% below list offer?

Last edited by modmondays; 08-01-2008 at 07:51 PM..
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Old 08-01-2008, 07:49 PM
 
335 posts, read 932,827 times
Reputation: 76
Quote:
Originally Posted by Kbinspections View Post
Good point. Think about some of these" on the fence" people. Some of them were priced out of the market for years. Some have even told me that they basically gave up on home ownership. Now, they are back in the game. I'm sure they are very nervious but I think they want to buy and not to let the opportunity pass them by. Just a thought....
Agreed. They want to come in- - and WILL. But nobody should underestimate them---they are much smarter now then just two or three years ago. The tools to research are tremendous. Sellers are having a much harder time with their list price rationales because they are many times based on pure emotion (right Andrea??

Saavy buyers today have all the tools available to them (from the comfort of their homes and a couple of drive bys and Open Houses) to smartly evaluate realistic home values - - not bubble values.

Only the ignorant buyers will be taken. Those are the ones the Sellers are hanging their hopes on these days - - just see Tom's post where he says Sellers (and their REA's Tom ) list high at the outset - - basically to try to hook some sucker on the line.....

Lots of suckers out there -- but apparently FAR fewer then a few years ago.......

Last edited by modmondays; 08-01-2008 at 07:57 PM..
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Old 08-01-2008, 08:04 PM
 
Location: NY
1,416 posts, read 5,586,909 times
Reputation: 605
Quote:
Originally Posted by TomMoser View Post
Are we talking 50K overpriced on a $400,000 home or on a million dollar home?
Sorry Tom, I should have indicated the price; the house is in the mid to high 500s. The surrounding neighborhood is in the low to mid 500s range. And thanks for the compliment, modmondays! In fact by Googling the property address I discovered that the sellers had first tried to sell FSBO for 75K more than their current listing price; there was no date on the FSBO site page though. Too bad because I was curious as to the timeframe of their initial pricing vs. last month's appearance on MLS via a traditional realtor. We also looked at a house 2 months ago that was FSBO; it's still for sale FSBO but now 40K less than when we saw it. At this point it is only about 10K over what we consider fair market for its area. By the way, the reason we passed on it wasn't mainly the price; it was because they had advertised the house as being 2500 sf of living space when in reality it was only 1800 (they had included 2 rooms in the basement which were not CO'd as being finished) AND had added a room on the main floor that they never got a CO for. We found these things out when we went to the Town offices after seeing the house. Ironically they are still advertising the house as being 2500 sq ft....

Last edited by totallyfrazzled; 08-01-2008 at 08:12 PM..
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Old 08-01-2008, 08:43 PM
 
335 posts, read 932,827 times
Reputation: 76
Quote:
Originally Posted by totallyfrazzled View Post
Sorry Tom, I should have indicated the price; the house is in the mid to high 500s. The surrounding neighborhood is in the low to mid 500s range. And thanks for the compliment, modmondays! In fact by Googling the property address I discovered that the sellers had first tried to sell FSBO for 75K more than their current listing price; there was no date on the FSBO site page though. Too bad because I was curious as to the timeframe of their initial pricing vs. last month's appearance on MLS via a traditional realtor. We also looked at a house 2 months ago that was FSBO; it's still for sale FSBO but now 40K less than when we saw it. At this point it is only about 10K over what we consider fair market for its area. By the way, the reason we passed on it wasn't mainly the price; it was because they had advertised the house as being 2500 sf of living space when in reality it was only 1800 (they had included 2 rooms in the basement which were not CO'd as being finished) AND had added a room on the main floor that they never got a CO for. We found these things out when we went to the Town offices after seeing the house. Ironically they are still advertising the house as being 2500 sq ft....

Just curious - - I havent gone to the Town Offices of North Hempstead (which is where we are looking - - Nassau/North Shore). What exactly can you find out there (any Town Hall) that isnt "generally" available on prop shark or mynassauproperty.com?
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Old 08-01-2008, 09:09 PM
 
335 posts, read 932,827 times
Reputation: 76
Quote:
Originally Posted by lxl View Post
Why is it so difficult for some people to understand that you can loss money by investing in real estate? In fact, since the recent "owners" are so highly leveraged, they can loss a lot! Buy high does not entitle you to sell high. The current market condition dictates what the asset is worth, not by how much the seller paid previously. If they don't want to take a loss, they can hold and wait for the market condition to improve. If they want to sell today, they have to price it according to today's market condition or it will just be a waste of time.
This is a very simple, quick and highly thought-provoking dead-on post. Congrats....great food-for-thought as we move forward looking...

Wow..just read again....REALLY GOOD POST...so easy and logical it is scary......

Last edited by modmondays; 08-01-2008 at 09:19 PM..
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Old 08-02-2008, 08:03 AM
 
Location: East Northport
3,351 posts, read 9,728,587 times
Reputation: 1337
Quote:
Originally Posted by modmondays View Post
Tom,

How are you categorizing "unrealisticaly lowball offers"? There are "lowball" offers that are grounded in realistic market values based on historical valuations, current comps etc....

Here's a real example:

Someone I know bought house and property in 2006 for say $825k (for investment flipping) - - and for whatever reason, the renovations weren't done and the house sat vacant and is currently in relatively poor condition (nice plot and great area tho). A prospective buyer offered a 30%-40% off-list "lowball" because they crunched the comps (comps couched in current nearby sales in similar condition) - - and coupled with the basic repair/renovation costs (architectural envelope, not decorative) - - determined that their -30/40% offer was in-fact the "fair market value" for this house - - is that an "unrealistic lowball offer" in your opinion?

In other words, if a "lowball offer" is offered up to you and couched in thoughtful rationale with facts/figures to defend it, would you still deem this an "unrealistic lowball" because it is still a "whopping" -30/40% below list offer?
No, what I am talking about is making an offer that is way out of line with the comps. That, to me, is the same as a seller asking way more then is supported by the comps.

I always advise my buyer clients to make reasonable offers on homes that are already priced realistically. Even though a home may be way overpriced, it is doubtful that the seller will accept an offer that is dramatically below their asking price. It's much better to deal with people who are grounded in reality.
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Old 08-02-2008, 08:06 AM
 
Location: NY
1,416 posts, read 5,586,909 times
Reputation: 605
Quote:
Originally Posted by modmondays View Post
Just curious - - I havent gone to the Town Offices of North Hempstead (which is where we are looking - - Nassau/North Shore). What exactly can you find out there (any Town Hall) that isnt "generally" available on prop shark or mynassauproperty.com?
We're looking in Suffolk, which has no website like mynassauproperty.com; the only Township that has ANYTHING official on the web is Smithtown, and that's only the basic property tax info from the assessor's office (current owner's name, true taxes, any STAR exemptions current, and date of current owner's initial assessment). So for the ACCURATE property tax situation on any home in Suffolk, the only way to be 100% sure of the info is to get it from the town's Assessor. Also, no website is going to give you the CO information on a house; does the seller truly have a CO for that deck? the pool? the shed? ALL the alterations to the house that increased the original square footage? The only way to find out for sure (and to verify that the current taxes truly do reflect what is physically there) is to get that info from the Town. You'd be amazed at how some realtors simply take the seller's word that they have a CO for this, that, and the other thing; we've seen several houses where there turned out to be an open permit (CO never actually gotten, thus taxes don't reflect that item) which the seller called a CO. And MANY cases in which the seller had not only gotten their initial mortgage but refinanced the house as well, and in both cases they'd bought the house without proper COs and nobody caught it (supposedly) until we went to the Town ourselves to verify that everything we saw at the house was legit. Oh, and the number of illegal apartments in basements (especially second kitchens, advertised in listings as 'summer kitchen' but the Town of course has no record of a second kitchen or third bath AT ALL) is truly staggering. Amazing how the apartment always belongs to a family member. We always then ask 'So this is a legal mother/daughter? Will you be removing the second kitchen before closing? because it won't be a mother/daughter once you sell the house, of course' and watch the stammering and evasion begin.
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Old 08-02-2008, 08:16 AM
 
Location: East Northport
3,351 posts, read 9,728,587 times
Reputation: 1337
On the Town of Huntington's web site you can get property tax info as well as a CO and permit history.
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Old 08-02-2008, 08:44 AM
 
335 posts, read 932,827 times
Reputation: 76
Quote:
Originally Posted by TomMoser View Post
No, what I am talking about is making an offer that is way out of line with the comps. That, to me, is the same as a seller asking way more then is supported by the comps.

I always advise my buyer clients to make reasonable offers on homes that are already priced realistically. Even though a home may be way overpriced, it is doubtful that the seller will accept an offer that is dramatically below their asking price. It's much better to deal with people who are grounded in reality.

ok...makes sense...thanks
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Old 08-02-2008, 08:49 AM
 
335 posts, read 932,827 times
Reputation: 76
Quote:
Originally Posted by TomMoser View Post
No, what I am talking about is making an offer that is way out of line with the comps. That, to me, is the same as a seller asking way more then is supported by the comps.

I always advise my buyer clients to make reasonable offers on homes that are already priced realistically. Even though a home may be way overpriced, it is doubtful that the seller will accept an offer that is dramatically below their asking price. It's much better to deal with people who are grounded in reality.
One other thing:

Sometimes, pulling comps that tell a real-market story is very difficult as you know.

Thus: what would you think of a buyer that -- in lieu of a good comp story -- used the "Fair Market Value" price that the County Assessor has used? "Fair Market Value" price in County Assessor parlance is generally defined as "the price a buyer would willingly pay for the property in a free/open market with no pressure applied to anyone/anywhere within the transaction - - and within today's market climate"

??? thoughts?
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