Help with Offer Price

[gagaliya]

how do you know there is a real contract pending for 595k the day after it was on the market? based on how fast the seller came back and accepted your offer i think you can get a better price if you hold firm for a while. Remember the only thing the realtor cares about is getting their commission, buyer/seller agent makes no difference.

Usually you know you are hitting the seller's bottomline, when they refuse the offer and dont backtrack, or only come back after a few weeks.

As a general tip, have patience. In this example, if the buyer stick with 570k, the seller might very well come back. And if they dont after a week or two, the buyer can always go back and offer 580k.

This is not the 05-06 market anymore, where houses are sold the same day with multiple bids. Take your time with the offers, what's the hurry, the house is going nowhere.

Originally Posted by bay

just share our recent experience. The house is listed 600K and on the market for 31 days when we went to preview. The similar house on the same street was sold for 710K in year 2006.

Day after preview, we told our agent that we'd like to make offer and she suggests to throw in 550K and see what will happen. On the same day, she came back with additional information. The property actually was sold on the first day on the market and the offer was 595K. However, the buyer has contigency to sell his house before he can buy and the seller did not like that so that contract is pending until buyer lift the continegncy. My realtor thinks that seller might have 595K on their mind and it could be hard to break. Thus, she suggests us to throw in 565K immediately. The seller finally countered back 590K. We decided to present best offer for 580K and seller countered back 585K. We did not accept their counter. One day later, they come back to us and accept our 580K offer.

I think you can have your realtor to check for additional information. If there is no offer on the house since it's on the market, then you definitely can cut down some price. Probably will start with 10% lower than the asking price if you feel the list price is fair.

[JerseyG]

Originally Posted by dsp2

Greetings. I'm not sure if this is best in this forum or in the Real Estate forum.

We're thinking of making an offer on a house we found and like in Springfield, NJ.

The house originally listed for about $500k, and has been reduced by about $25k.

I looked on trulia.com and a couple of other sources. Trulia claims that houses in Springfield are selling for about 16% less than the listing price. Also, that "similar houses" are selling for about 14% less than the listing price.

Also, I saw charts showing that house prices for this area are at, about, 2004 levels.

Further, the best comp our realtor sent us showed a house with similar characteristics in the same neighborhood recently selling for 9% less than list price.

HOWEVER, the realtor told us that houses in the area are selling for about 3% less than list price. Also, that he might suggest we bid about 5% less for this one to start.

I am confused. Of course, the higher the sale price, the more the realtor will make. However, I'd think that if he wanted to nudge us higher, he'd do so more subtly.

Can anyone suggest why there is such a huge difference between what sites like trulia tell me (houses selling for 16% below asking in this area) and what the realtor is telling me (start at 5% below asking price)?

Am I missing something big? Is the realtor being dishonest?

Finally, if anyone has any advice on what they think might be a good starting price, I'm all ears.

Many, many thanks for any advice. I need it!

Comps are basically a generalization of what houses with the same amount of bedrooms/baths sold for or are listed at. They don't always take into consideration the location of the house and the age of the house unless you specifically ask for those factors to be included.

The other things comps don't do is take into consideration is the condition of the inside of the house. Was a brand new kitchen just put in or is the kitchen 30 years old? Knob and tube or updated, etc.

At least not in my experience and it drives me crazy when my realtor sends me comps and I take a virtual tour or check out any online pictures (be wary of houses listed on the internet with only one picture) to find the condition of these "comps" are nowhere NEAR the condition of the house I'm trying to sell. To me, that's not a comp.

[janeswapit]

A good price is what the seller wants to receive and what the buyer wants to pay.

Try to target a price close to the listing price and go from there. If the house needs tons of work on it then discuss this with your agent. The agent can bring this up to the seller if the price is allot lower than the asking price.

If you are buying an older home don't forget to research the grants out there to apply to so you can update the home.

[elflord1973]

Originally Posted by JG183

how is it that mortgage rates aren't 2% - 3% when the lenders are getting the funds at 0% - 0.25% ????

Because the mortgage rates are 30 year rates, whereas those other rates are overnight or very short term rates. No-one is getting 0.25% on a 30 year loan.

bring rates down, and housing crisis S O L V E D !

... or kicked down the road.

[CaptainNJ]

if there are 3 houses in the same community that are for sale, can i use that to have them compete for my purchase? whats the best way to go about it? make lowball offers on all the properties and see who goes the lowest?

[bay]

Originally Posted by gagaliya

how do you know there is a real contract pending for 595k the day after it was on the market? based on how fast the seller came back and accepted your offer i think you can get a better price if you hold firm for a while. Remember the only thing the realtor cares about is getting their commission, buyer/seller agent makes no difference.

Usually you know you are hitting the seller's bottomline, when they refuse the offer and dont backtrack, or only come back after a few weeks.

As a general tip, have patience. In this example, if the buyer stick with 570k, the seller might very well come back. And if they dont after a week or two, the buyer can always go back and offer 580k.

This is not the 05-06 market anymore, where houses are sold the same day with multiple bids. Take your time with the offers, what's the hurry, the house is going nowhere.

I guess the experience we had in these couple months was not like that. The house with nice condition and correct pricing is usually gone on the first week with mutiple offers. We lost one we really like. The final price was 20k over the listing price and it was gone in 3 days. However, we did regret for 580K offer mentioned previously and back off from the deal. I guess we were a little panic when we got overbid by 4000 for the one we really like so that we were kind of out of mind at that time. Now we are in process of getting into contract for a REO property in the same area and final offer price is 576K while the listing price is 539.95K. There were 4 offers coming in when the property is listed for 3 days only. The first around we offered 525K and was the third place among the 4 offers. The final round offer we gave out 576K and was only 3000 over the second high offer (according to the info our realtor got from the bank).

[gagaliya]

i am curious what area is this? looks like you guys are partying like it's 2005

Originally Posted by bay

I guess the experience we had in these couple months was not like that. The house with nice condition and correct pricing is usually gone on the first week with mutiple offers. We lost one we really like. The final price was 20k over the listing price and it was gone in 3 days. However, we did regret for 580K offer mentioned previously and back off from the deal. I guess we were a little panic when we got overbid by 4000 for the one we really like so that we were kind of out of mind at that time. Now we are in process of getting into contract for a REO property in the same area and final offer price is 576K while the listing price is 539.95K. There were 4 offers coming in when the property is listed for 3 days only. The first around we offered 525K and was the third place among the 4 offers. The final round offer we gave out 576K and was only 3000 over the second high offer (according to the info our realtor got from the bank).

[bay]

Originally Posted by gagaliya

i am curious what area is this? looks like you guys are partying like it's 2005

It's in Berkeley Heights/New Providence...
Amazing, huh?
For those sitting on market for a while, there may be some space to cut down price. For those nice condition/location and correct pricing houses in that area, it usually gone in the first week. My friend is looking at the same area. They encountered the same sitution as well.