Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I would like to get a few opinions on this. i am currently looking for a building lot in north tampa.
IN MY OPINION, 95% of what's on offer is insanely overpriced. the other 5% in my opinion, are also overpriced but at a level where negotiations could begin. what is stalling these negotiations are sellers looking over to the other 95% of sellers, who are still daydreaming about 2006, and comparing their valuations!
Example:
property X and property Y are on the same road under a 1/4 mile apart. both are lots of 5 acres. both are zoned identically, identical fema zone, similar orientation and dimension. neither has any commercial prospects i could go on. one has been on the market from before i started studying the market 15 months ago, the other has been around for about 14months.
property X began life on the market with a list of $550k which dropped to $400k about a year ago and down to $299k 5 months ago. the current owner paid $250k in october 2005. since the price reduction, my lowball of $175k is the only offer they've had a sniff at. (the way i see it, property prices in this area have dropped around 25% from their peak and are still falling. hence my offer of around 30% off their purchase price)
property Y listed 14 months ago for $595k. it's still on at $595k. the current owner paid $40k in 1992.
There are so many places like this in the area where i am looking! what i want to do is send and email/letter to all the insanely overpriced lots' owners and realtors with details of properties that they are competing with which are similar, half the price and have sat on the market for over a year.
As a buyer who is somewhat confused by these discrepancies, I would just like for them to give me a logical justification of their list prices. this would do a great deal to settle my nerves and help me to commit my hard earned cash.
There are so many places like this in the area where i am looking! what i want to do is send and email/letter to all the insanely overpriced lots' owners and realtors with details of properties that they are competing with which are similar, half the price and have sat on the market for over a year.
As a buyer who is somewhat confused by these discrepancies, I would just like for them to give me a logical justification of their list prices.
You're only looking at one part of the picture. Maybe they borrowed on the property and can't sell it for lower prices because there's additional liens on it.
This is common with many properties. Even if the original purchase price is cheap ... it may be only half the story. If they ran up a bunch of debt on the property ... they won't be able to sell for less, even if they want to.
property X began life on the market with a list of $550k which dropped to $400k about a year ago and down to $299k 5 months ago. the current owner paid $250k in october 2005. since the price reduction, my lowball of $175k is the only offer they've had a sniff at. (the way i see it, property prices in this area have dropped around 25% from their peak and are still falling. hence my offer of around 30% off their purchase price)
Ok but ... since they paid $250K in 2005 chances are they probably still owe close to that amount. And, if they took out a second then, they probably owe even more so ... in cases like this, lower market prices are irrelevant.
Why are you assuming that they could sell it to you for $175K when they probably borrowed at least $250K on the property three years ago? Chances are ... they probably can't sell low because they owe too much to the bank.
You need to look at how much is actually owed on these properties because, if there's a lot of debt ... lowballing is going to be a complete waste of time. They're not going to be able to sell low anyway ... even if they wanted to.
I personally would never bother to bid on a property that was purchased 2-3 years ago (unless it's a foreclosure) because, chances are, the seller owes too much and can't take a lower price anyway. It's a complete waste of my time.
Well the person that bought for $40K in 1992 probably owns it free and clear and doesn't care if it sells or not.
The other property you expect to take a $75K loss because you say this is what it is worth.
Generally I find people that say everyone is overpriced are generally looking above their budget or else they are out of touch with what is really going on. I can say this because even with many properties overpriced you should still be able to find some priced right if your numbers are in line. If you can't find any that you think are priced right well it may not be the sellers who are off.
I know vacant land near me has come down considerably in price so if you can't find the property you are looking for at the price you want maybe it doesn't exist. You can keep making your offers but if there are no comps to support what you offer,why would they take your offer.
Generally I find people that say everyone is overpriced are generally looking above their budget or else they are out of touch with what is really going on. I can say this because even with many properties overpriced you should still be able to find some priced right if your numbers are in line. If you can't find any that you think are priced right well it may not be the sellers who are off.
Excellent point ...
Just because it's a buyers market, a lot of people seem to think they should be able to pick up these properties for nothing. That's just not going to happen ...
Maybe the OP is the one who needs to get back to reality ...
If none of the properties in the area are selling, they're overpriced. Property is only worth what someone will pay for it, amounts owed are irrelevant to its actual value.
If none of the properties in the area are selling, they're overpriced. Property is only worth what someone will pay for it, amounts owed are irrelevant to its actual value.
Very true; but if the seller is only willing to take a certain amount of $$ they don't give a damn.
i have monitored 100 lots which fit my base criteria for the last 15 months. in that time of the 100 lots, 4 sold!
besides all i want is clarity from the seller! ie
dear mr seller,
this is what you are selling your lot for. are you aware that in the immediate vacinity there are 10 other lots for sale which match your lot description? 3 of those lots are listed at substantially lower prices and have remained unsold for more than a year.
your lot matches my criteria.
before presenting an offer to you i wonder if you would be so kind as to have a look at the details of these other lots i have enclosed. i would appreciate it if you could point out differences, which i might have overseen, to justify the price discrepancy. perhaps you could include any additional information ie potential oil well/gold mine etc
i would imagine that some sellers would get a much needed wake up call, many would just ignore the note, some might adjust their valuations and some would be grown up enough to respond with their justification.
on my original question, would there be any legal issues in sending this out to the realtors and the owners?
Very true; but if the seller is only willing to take a certain amount of $$ they don't give a damn.
Agree. It works both ways. If a buyer thinks everything is overpriced, then maybe they're looking over their range. Just because the prices on houses has declined, doesn't mean that sellers can/will drastically reduce because buyers want a bargain.
When I house hunt in June, I'm thinking my original plan of offering 90% should be adjusted downward. After reading the messages here, I probably should reconsider and save myself a few bucks
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
