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After 45 days I reduced it 10k(now 245k) after 3 showings which includes first open house.I'm still flexible, but with that program it would change things somewhat.It has been on the market 2 months now and I'm really not pressured for time but my realtor makes it sound like the longer you wait the less you'll end up with.The problem is that ,those who are "having" to sell now,for whatever reason necessary, are dragging down the expected sale prices on those of us who really are not in dire straights.My neighbor just packed up and left his house after 1 year.Looks like *@#? all around it outside.
I am not familiar with your area's statistics, so any remarks I have are strictly for my market here in orlando.
Your realtor making it sound like the longer you wait the less you'll end up with is actually good advice (looking at the numbers in my local area). You are 100% correct that those "having" to sell now are dragging down the market. The market will continue to be pressured downward until the balance of people needing to sell and people wanting to buy balance. In my market there are over 26,000 homes for sale, not everyone needs to sell this month, and usually they will price accordingly, market prices start to go down when next month, or the month after that, or the month after that goes by and that same person that didn't need to sell now HAS to sell, and slashes their price. This includes foreclosures, pre-foreclosures, REO, Divorces, Relocations, people that have already bought a new home, etc.
The longer a home is on the market the higher the probability the seller will either take the home off the market or will drop their price. And as long as there is a very large supply of homes compared to how many buyers are buying, an efficient market dictates that prices will continue to fall.
In my area, if no other homes come on the market, it will take about 18 months for the supply dwindle back to a historically "balanced" level....if the current sales pace of 1000-1400 sales a month continues.
Ask your realtor for the most recent inventory and monthly sales stats for your county/city. Then ask if he can find the stats from 2002/2003 or before everything went hog wild. Compare and come to your own conclusions on whether you think your home will be worth more in 12 months or less.
As stated above, builders have been doing this for some time now. And here I have a title company that will do it for us, hold the funds in escrow and make the payments for the buyer. It is out of the box thinking, nothing wrong with it at all. Tell her YES! I'm interested!
Banks are rolling these programs out to the public now. They have been available through builders for a long time now. Everything is 100% legal and it's something unique to offer buyers that helps differentiate your home from someone elses.
Some people see 9,000 off of a 300K home and say that's piddle, but tell the same people they won't have to pay a mortgage for half a year and it might pique interest. Some people just think about how much a home will cost monthly.
How this works is like this. The property is sold, you the seller are off title and you walk away with your check. The 6 months of mortgage payments are escrowed at closing into an account with the lender. The size of the account is established before closing and is limited by certain lender standards. For the next 6 months the buyer's mortgage payments are made from this escrow account. Come month 7 the escrow account is at $0 and the new owners have to make their first payment.
The bank DOES qualify the buyer on what the payment will be on month 7, and the program is still a full 30 year fixed type mortgage.
I say go for it, what can it hurt. Any smart person will at least see that since your willing to pay 6 months of mortgage that if they prefered it be taken off the price, that they can make their offer on that.
Are you getting showings still? will a 9K price reduction put you in a lower price bracket? (ie 299K instead of 308K?)
Wow.....that make sense after you explained the process so well. Thanks for the clarification.
After 45 days I reduced it 10k(now 245k) after 3 showings which includes first open house.I'm still flexible, but with that program it would change things somewhat.It has been on the market 2 months now and I'm really not pressured for time but my realtor makes it sound like the longer you wait the less you'll end up with.The problem is that ,those who are "having" to sell now,for whatever reason necessary, are dragging down the expected sale prices on those of us who really are not in dire straights.My neighbor just packed up and left his house after 1 year.Looks like *@#? all around it outside.
If my neighbor did that and I had my home on the market I would go over to the neighbor's house and try to make it look somewhat decent (even just cutting the grass will make it look better than what it is now). It's definitely hurting your home. I've heard about this offer and it does sound like a good idea (and win/win for everyone). I'm hoping one day I'll be a buyer (looking to relocate just waiting on a job) and plan to only look at homes I can afford with a standard 30 year fixed and would LOVE it if the seller was offering 6 monhts paid mortgage. I work in a real esate office and I've also seen sellers offering to pay taxes for one year and HOA dues for a year.
Is this something that can be done everywhere, or is it only in certain states? I am in CA, and getting ready to put my house on the market for a relocation in June. This kind of set up sounds interesting, but I have never heard of it here. Does anyone from CA know? To me, this sounds more appealing - or appealing in a different way - than a lowering of the asking price..
how long as your home been on the market? If you are really competitively priced you don't need the gimmicks.
Quote:
Originally Posted by turnerfamily
I'm having my 2nd open house this weekend and my realtor called and asked if I would be interested in a program they're offering.It involves the seller paying the first 6 months of the potential buyers payments.This is set up upon closing and is figured as if 100% is financed at 6.25%.They said this allows the buyer time to enjoy the holidays without mortgage worries and if they need the money for furniture,etc....Now for us that's about 9000.00 which is fine since I've already done one price reduction and I'm still flexable on my price but the whole idea behind this program just isn't right to me.I know it's part of sales tactic, but it sounds almost too "gimicky" to me.Anyone else heard of this program or agree with it?
that would be totally appealing to me. First of all, I would only bid on a home I know I can afford- but I also know most sellers do put their homes a bit (if not a lot) overpriced.
If I think hmmm$9K off the asking price, that doesn't change the mortgage monthly payment (yes, I do look at it monthly) too much. But, if I don't have to pay for 6 months, I can think about all of the new furniture, or the changes I can make to the house, or more savings I gather, with the mortgage money I am now saving. Or, I might change it to no mortgage for 4 months or 3, and pay 1/2 of closing.
What buyers like, most of them, is no money leaving their pocket
I know for the agent this might generate more showings for the listing but doesn't this feed into that buyer who is undisiplined and is unable to manage their money.I've heard you say basically-who cares as long as you get the sale,not your worry after it's sold.I'm thinking that this is exactly why the market is the way it is.This is similar to those who get those notices from their bank/credit union that says"skip a payment" during November and December-enjoy the holidays.Then after 5 years of skipping those 2 months they realize they're having to extend there pay off 10 months and pay more interest.It's all a mind set for those people and they are the ones who play right into it(it's like candy to a baby).Why put off the inevidentable;paying for the house you're living in on a monthly basis with property taxes(taxes-that's another problem for those that don't pay monthly).The right buyer should make an offer they can " easily "afford and after moving in ,start paying for that purchase.Plain and simple-be responsable. Heck,if things keep going the way they are-you'll be able to roll over your short fall from your sale into your new house purchase(only if the banks inflate the value).
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As a buyer....
) overpriced.
