Help with intial offers on home? (Germantown, Pasadena: short sales, real estate, mortgage)

[danny01]

I've found three homes in Pasadena Maryland I really like and am prepared to make an offer for. I want to start with a very aggressive offer. I feel since I have the advantage of 3 homes to choose from, starting with a lowball offer would be best. I'm just not sure how low I can go. Below is some background info on each home. Would you guys mind giving me your guesses/estimate on a starting lowball offer for each?

1.)First home is a short sale. The home owner moved away and bought a new home, couldn’t afford the payments on both. The list price is currently 299,000. An offer of 305,000 with 10K closing was accepted but the buyer backed out after he was told it would take 4 months to close. House is priced right, from my research I feel the house is worth around 330K. Been on the market 101 days.
2.)Second home owner wants to upgrade. Have had the home for 12 years and have had two children and are ready to upgrade to a larger home. The list price is 329K (reduced from 339K). I inquired about this home around a month ago and asked for disclosure information. The seller called my agent several times to asked if I was interested and then verbally extended an offer of 325K (this was when the house was at 339K). From my research I feel the house is overpriced and its true value is closer to the 265-275K range. Been on the market 87 days.
3.)Third home seller moved away for job relocation. The list price for the home is 315K. From my research I have the home value around 285K. Been on the market 137 days.


Thanks,

[beilart]

The short sale will take 4-5 months no matter your offer. If the people in the second home are in no hurry to sell or don't really have to sell, they probably won't look at 50-60K less for their home. The third one has not been on the market very long. If you can wait it out, offer 250K on the short sale and see if the lender will counter to something a bit above that.

[Dreamy46]

Originally Posted by danny01

I've found three homes in Pasadena Maryland I really like and am prepared to make an offer for. I want to start with a very aggressive offer. I feel since I have the advantage of 3 homes to choose from, starting with a lowball offer would be best. I'm just not sure how low I can go. Below is some background info on each home. Would you guys mind giving me your guesses/estimate on a starting lowball offer for each?

1.)First home is a short sale. The home owner moved away and bought a new home, couldn’t afford the payments on both. The list price is currently 299,000. An offer of 305,000 with 10K closing was accepted but the buyer backed out after he was told it would take 4 months to close. House is priced right, from my research I feel the house is worth around 330K. Been on the market 101 days.
2.)Second home owner wants to upgrade. Have had the home for 12 years and have had two children and are ready to upgrade to a larger home. The list price is 329K (reduced from 339K). I inquired about this home around a month ago and asked for disclosure information. The seller called my agent several times to asked if I was interested and then verbally extended an offer of 325K (this was when the house was at 339K). From my research I feel the house is overpriced and its true value is closer to the 265-275K range. Been on the market 87 days.
3.)Third home seller moved away for job relocation. The list price for the home is 315K. From my research I have the home value around 285K. Been on the market 137 days.


Thanks,

You don't have enough information here for anyone to offer any real advice. Such as, have you looked at the loan deeds on these properties to know how much the sellers have borrowed against them? If guy #2 owes $320k, what could he really cut? What are and how current are the tax assessments? What are the comps selling for?

[firefightermom]

Sellers are offended by lowball offers. You will most likely get refused immediatley.

[Dreamy46]

Originally Posted by firefightermom

Sellers are offended by lowball offers. You will most likely get refused immediatley.

That's a myth perpetrated by the real estate cartel.

[danny01]

Originally Posted by beilart

The short sale will take 4-5 months no matter your offer. If the people in the second home are in no hurry to sell or don't really have to sell, they probably won't look at 50-60K less for their home. The third one has not been on the market very long. If you can wait it out, offer 250K on the short sale and see if the lender will counter to something a bit above that.

Yeah, the realtor estimated 120 days to close the short sale (however he said he feels confident he can get it done in 90). Honestly this isn't a big deal even if it takes longer. I'm able to wait it out however long it takes. I have a place to live at and once the deal is finalized I can move out immediately (without having to get out of a rent/lease agreement or anything).

Yeah I figured I'd have to go too low, I just feel like they have the house over valued at the moment.

Thanks,

[danny01]

Originally Posted by Dreamy46

You don't have enough information here for anyone to offer any real advice. Such as, have you looked at the loan deeds on these properties to know how much the sellers have borrowed against them? If guy #2 owes $320k, what could he really cut? What are and how current are the tax assessments? What are the comps selling for?

First one is a short sale, second two only have the original loan/mortgage
First Home 2009 Tax Assessment $420K, Sold in 07 for 396K
Second Home 2009 Tax Assessment 312K, Sold in 97 for 154K
Third Home 2009 Tax Assessment 367K,

Originally Posted by firefightermom

Sellers are offended by lowball offers. You will most likely get refused immediatley.

Honestly I'm not worried about offending anyone with my offer. I'm only interested in getting the best deal. I have several homes I'm interested in and am under no real pressure to buy and know that if these homes fall through they'll be other oppurtunities in the future. Obviously I'm not going to offer anything truly insulting or absurd but my main focus is getting the best possible deal for myself. This is a buyers market and IMO a seller should be happy that someone is extending them an offer and opening a line of communication to negotiate.

[Dreamy46]

Originally Posted by danny01

First one is a short sale, second two only have the original loan/mortgage
First Home 2009 Tax Assessment $420K, Sold in 07 for 396K
Second Home 2009 Tax Assessment 312K, Sold in 97 for 154K
Third Home 2009 Tax Assessment 367K,



Honestly I'm not worried about offending anyone with my offer. I'm only interested in getting the best deal. I have several homes I'm interested in and am under no real pressure to buy and know that if these homes fall through they'll be other oppurtunities in the future. Obviously I'm not going to offer anything truly insulting or absurd but my main focus is getting the best possible deal for myself. This is a buyers market and IMO a seller should be happy that someone is extending them an offer and opening a line of communication to negotiate.

I'm going to make a couple of assumptions here. First, that you know that tax assessments are done every three years and that all these assessments you listed were done on 01 January 09? Second, that you used the MdLandRec site to verify the mortgage amounts? Third, that you're going to get stuck paying most, if not all, of the closing costs on the short sale? The others?

#2 sounds way overvalued as you stated.

I'd have to go with the short-sale. If the house is in good shape, I'd offer 270k, or 250k if you're feeling cocky, and not worry about getting outbid or getting turned down. It doesn't sound like people are lining up to buy it anyway with that much DOMM. Plus, it managed to escape getting bought during the tax credit feast, which doesn't bode well for the property.

I will tell you I've seen plenty of short sales sell for half or less of their tax assessments if they needed any work. That opens up another question, why not hire your own appraiser to put a value on the one you'd most like to buy? What's $300 when you're spending this kind of money?

The price trend is still down, and if you don't get a lowball approved to give you some cushion, you'll just be the next negative equity victim on the list.

We've discussed it in some other threads, but the real deals won't come until after the tax credit and other government intervention ends...

[firefightermom]

Originally Posted by Dreamy46

That's a myth perpetrated by the real estate cartel.

Not really...when I sold my townhouse in Germantown, we got a lowfall offer that was laughable. They didn't want to raise their price, so we sold to someone else with a reasonable offer. Guess it just depends on how desperate the person is to sell.

[nurider2002]

"That's a myth perpetrated by the real estate cartel"


agree with the last poster; I had folks making ridiculously low offers on the last house I sold. I didn't counter, I simply declined. When you are selling your home and you have had it appraised, done the comparables research and know what your house is worth, it's just annoying to get a significantly below market offer. I ignored/refused them, no discussion.