are houses going for more than the precrash prices? (Boston: motel, attorneys)
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Mike the issue of offers without knowing worth is huge! Comps are comps. Nothing more to be said. I just got my appraisal back and I am SO glad I worked with a realtor who knows the market. It appraised for a little more than my offer (which was over asking). I am finally under contract after losing several properties to what I felt were unrealistic bids. I think sellers are fairly savy though, an all cash offer is still the best obviously. But greater than 20% down is still better than someone with 'only' 20% even at a lower offer price.
In the end, a property's value is simply what buyers are willing to pay for it. I review the comps before every offer I put in for a client and lately some of these clients are being beat out by others offering significantly more despite the fact that they are making more than generous offers. The market from three months ago is just not the market of today in many areas. In another month or two, some of these crazy high offers will become comps.
The more you put down the stronger your offer is.
Quote:
Originally Posted by nshorema
On another note, have you ever seen sellers just take the highest offer, and get all of the way to the appraisal only to end up taking much less because the house didn't make the grade? I'm sure that is happening out there. My worst was a house that went under agreement for $40,000 over asking, with absolutely no comps to support that price. I'd be interested to know if the buyers are going to pony up some serious cash or will the deal fall through.
I'm seeing a lot of people with significant down payments. If you put down enough money the appraisal becomes merely an excercise. I'm sure this happens though. I've seen it happen in less crazy markets.
Quote:
Originally Posted by raveabouttoast
Why?
A 17% downpayment takes the same time for the bank to process as a 22% downpayment. So you can't close any quicker. The only thing I can think of someone with a 22% downpayment might appear to be more financially secure, and thus able to actually get a mortgage.... but that's what a pre-approval letter is for.
I wouldn't give up several thousand dollars just because someone's making an offer with a slightly larger downpayment.
The part of your post I highlighted is part of the story. The other part is that the more downpayment you put down the less important the appraisal becomes.
Quote:
Originally Posted by hken
IMO this particular problem (low inventory) is not going away any time soon. You have a whole generation of buyers who cannot sell their home because they are underwater. If you assume people in a normal market on average move every ~7 years, then everyone who bought 05-06 cannot sell and are stuck. Those default landlords might be able to buy a 2nd home but they are certainly not listing their old ones. If you want to "wait" it out, it's worth a gamble but I genuinely believe there is a structural problem in the market with inventories. The only way out is higher prices to induce sellers to sell. But we are not talking 1 year of price increases....I would say 2-3 years.
It's an interesting train of thought you have here, but how do you explain the extremely low levels of inventory in towns like Wellesley, Needham, Newton, and Lexington? Very few people in these towns are underwater. Prices are higher in these towns in most price points than they were in '05-'06 as well.
It's an interesting train of thought you have here, but how do you explain the extremely low levels of inventory in towns like Wellesley, Needham, Newton, and Lexington? Very few people in these towns are underwater. Prices are higher in these towns in most price points than they were in '05-'06 as well.
I'm not so sure about that. I took a quick analysis of average home prices in Lexington MA. Take the average for prices in June 2004, 2005 and 2006. That comes out to ~$660K. Per Zillow latest estimate is $690K before your typical 6% broker/etc fees. If you deduct 6% from $690K, you are at $650K. That's under or virtually break even. That's a very simple approach to doing the math but it would suggest that net of transaction costs (and any other money people dumped into their house) a lot of people will not sell until prices get a little higher.
I'm not so sure about that. I took a quick analysis of average home prices in Lexington MA. Take the average for prices in June 2004, 2005 and 2006. That comes out to ~$660K. Per Zillow latest estimate is $690K before your typical 6% broker/etc fees. If you deduct 6% from $690K, you are at $650K. That's under or virtually break even. That's a very simple approach to doing the math but it would suggest that net of transaction costs (and any other money people dumped into their house) a lot of people will not sell until prices get a little higher.
First, I think you are looking at the Zillow "Home Value Index" which is another useless Zillow statistic in the same vein as the "Zestimate." If you go to the top left and click on "Sales Price" you'll get a more useful graph. According to Zillow the median sale price in Lexington on 2/1/13 was $779K. Of course, this was early on in the craziness that we're currently experiencing and I'm sure if Zillow had more up to date numbers you'd see a significant increase in this statistic. Regardless, in Jan '06 the median home price was $651K.
Second, if you pay your agent a 6% commission to sell your house PLEASE call me when you're ready to sell.
First, I think you are looking at the Zillow "Home Value Index" which is another useless Zillow statistic in the same vein as the "Zestimate." If you go to the top left and click on "Sales Price" you'll get a more useful graph. According to Zillow the median sale price in Lexington on 2/1/13 was $779K. Of course, this was early on in the craziness that we're currently experiencing and I'm sure if Zillow had more up to date numbers you'd see a significant increase in this statistic. Regardless, in Jan '06 the median home price was $651K.
Second, if you pay your agent a 6% commission to sell your house PLEASE call me when you're ready to sell.
ill agree with the 6%, i was ready to sell last summer. Had 2 agent from diff. agencies look at house. Then find out on wanted 6% the other 5%. I told them both no thanks, your commission is too high. They wanted me to list at $330k too low considering my house. I strongly got the feeling from both they wanted to list low and sell fast. No way was i about to pay $16-20k commission on a house most likely to sell in the first week for very little work done for an agent. I decided i will wait, glad i did with the market getting much better. In this day and age of computers and internet its very easy to sell your own home yourself !! and save that rediculous 5-6% commission charge. Unless of course a person does not want to do alittle paperwork and hire a real estate attorney to draw up paperwork for about $1k.
ill agree with the 6%, i was ready to sell last summer. Had 2 agent from diff. agencies look at house. Then find out on wanted 6% the other 5%. I told them both no thanks, your commission is too high. They wanted me to list at $330k too low considering my house. I strongly got the feeling from both they wanted to list low and sell fast. No way was i about to pay $16-20k commission on a house most likely to sell in the first week for very little work done for an agent. I decided i will wait, glad i did with the market getting much better. In this day and age of computers and internet its very easy to sell your own home yourself !! and save that rediculous 5-6% commission charge. Unless of course a person does not want to do alittle paperwork and hire a real estate attorney to draw up paperwork for about $1k.
As I alluded to in another thread, you're not paying a real estate agent by the hour. You're paying for their knowledge and expertise to guide you through one of the biggest financial transactions you'll make in your life. A good agent will get your home sold fast. A bad/mediocre one will require much more time to make a sale.
In my area north shore prices are recovering but nowhere near precrash prices.
Beware, listings are selling quickly, but the economy has not recovered. So
this phenomenon is not real.
Hi...can you explain what this phenomena is? I see many homes on RE websites (MLS), all I see is sale pending, sale pending........I am looking to buy home in MA,,,,but have to sell the one in SoCal first (our market is getting hot once again).....I am worried by the time I get back to MA there wont be any more good deals...
ill agree with the 6%, i was ready to sell last summer. Had 2 agent from diff. agencies look at house. Then find out on wanted 6% the other 5%. I told them both no thanks, your commission is too high. They wanted me to list at $330k too low considering my house. I strongly got the feeling from both they wanted to list low and sell fast. No way was i about to pay $16-20k commission on a house most likely to sell in the first week for very little work done for an agent. I decided i will wait, glad i did with the market getting much better. In this day and age of computers and internet its very easy to sell your own home yourself !! and save that rediculous 5-6% commission charge. Unless of course a person does not want to do alittle paperwork and hire a real estate attorney to draw up paperwork for about $1k.
I am sure that any one with half a brain can figure out how to FSBO.....RE agents will act like they have some mysterious body of knowledge....they dont...it was a field that house wives got into.....or a side line that requires NO COLLEGE EDUCATION.............I will do this myself, hire a RE attorney to draw up the paperwork.
I am sure that any one with half a brain can figure out how to FSBO.....RE agents will act like they have some mysterious body of knowledge....they dont...it was a field that house wives got into.....or a side line that requires NO COLLEGE EDUCATION.............I will do this myself, hire a RE attorney to draw up the paperwork.
i dont think you need a college education to be a plumber, electrician, and so on. but i still dont pretend none of those professions dont offer a very useful skill for me.
I am sure that any one with half a brain can figure out how to FSBO.....RE agents will act like they have some mysterious body of knowledge....they dont...it was a field that house wives got into.....or a side line that requires NO COLLEGE EDUCATION.............I will do this myself, hire a RE attorney to draw up the paperwork.
I have a college degree and a masters degree. Both have certainly served me well in my job. While the job doesn't require a college degree, it certainly helps to have one. I know agents that have degrees from Harvard. The school of life has been a great teacher as well. The experience I've gained in my years as a real estate agent have been more valuable than my degrees. If you're not spending every day transacting real estate for a period of years, I can guarantee you that you will not handle a real estate transaction nearly as well as I would.
Real estate attorneys are great for filling out the forms which are basically templates (if you can get your hands on the forms you could likely just as easily fill them out yourself they're not that complicated). However, that's like giving a circular saw to a toddler. Just because you can turn on a tool doesn't mean you actually know how to use it properly. I don't just fill out the forms. I know how to make an offer so that it actually gets accepted. The dollar amount is not the only factor here. I've gotten many offers accepted for my clients even though they were not the highest bidder because I know how to make the offer attractive in other ways.
You guys are right, but it is about finding a good RE agent.....and I know that they have experience I could never match. This is a field that requires a lot of experience.....never meant to down grade the profession,,,,,but I have met many flakes,,,,,,as we all seek the truth and excellent advice with any RE transaction,,,,,many of them are not able to provide.
I think that people that can sell their homes (FSBO) have had previous experience in RE or they have family in the business or access to attorneys...
I certainly would need an excellent RE agent when it comes time to navigate the market back there..........that being said.............. immense amount of homework is in order
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