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Old 10-15-2008, 07:48 AM
 
Location: Minnesota
959 posts, read 1,613,921 times
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I bought my home in December of 03 for $385,000 and between then and now, put in almost $100,000 of upgrades including finsihing the basement (professionaly). I currently have the house listed at $389,900. Would you consider this fair market value? I see that people expect houses to be cheaper than they were bought for in the last 5 years. But does that count on a house that has had so much work done including adding 1000 Sq Feet?

Kristine
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Old 10-15-2008, 07:53 AM
 
5,462 posts, read 5,938,841 times
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Totally depends on what other comparable houses in the area are selling for. If you overpaid in 2003 and overpaid for the improvements (or over improved for the area) you might end up getting less than you hope. If you got a bargain originally and focused on adding improvements that have a wide appeal to a large number of buyers at a reasonable cost, you can come out way ahead. Without knowing more details, it's impossible to say.
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Old 10-15-2008, 07:56 AM
 
Location: Minnesota
959 posts, read 1,613,921 times
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On my street there are (I think) 4 homes for sale. 2 are smaller than mine by 1000 sq feet and are priced at $369,000 and the other is like $449,000. The other is the same size as mine but is priced at $371,000. This house has been on the market for WELLLL over a year so I am not sure what the deal is with this house. They have gone through about 4 different agencies. So mine is kind of in the middle.

Kristine
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Old 10-15-2008, 09:17 AM
 
Location: Barrington
45,851 posts, read 34,057,457 times
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Quote:
Originally Posted by hammy5 View Post
On my street there are (I think) 4 homes for sale. 2 are smaller than mine by 1000 sq feet and are priced at $369,000 and the other is like $449,000. The other is the same size as mine but is priced at $371,000. This house has been on the market for WELLLL over a year so I am not sure what the deal is with this house. They have gone through about 4 different agencies. So mine is kind of in the middle.

Kristine
Have you seen the inside of this house? How does it compare to your place? If it is in similar shape/upgrades, the days on market tells you the market has already rejected it at $371K.

Do you have a handle on recent closed comps in the area? Is anything selling?

Rarely do improvements return what you paid for them. It sounds like you understand this and like so many right now, are going to make a gift of them to whomever buys the place. Yeah, this sucks.
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Old 10-15-2008, 09:21 AM
 
Location: Minnesota
959 posts, read 1,613,921 times
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Quote:
Originally Posted by middle-aged mom View Post
Have you seen the inside of this house? How does it compare to your place? If it is in similar shape, the days on market tells you the market has already rejected it at $371K.

Do you have a handle on recent closed comps in the area? Is anything selling?

Rarely do improvements return what you paid for them. It sounds like you understand this and like so many right now, are going to make a gift of them to whomever buys the place. Yeah, this sucks.

I have not seen it yet, I should get in there and see. They just dropped it to $371,000 this week. They were at $379,000 before that. I am assuming that they need a certain amount just to break even since it was built about 2 years after mine.

Nothing in my entire city is selling that is over $250,000.

I get that I will not get back what I put in. It was really hard to swallow but, what are you going to do? But I would at least like to get what I paid for it. Maybe that is a pipe dream.

Kristine
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Old 10-15-2008, 09:23 AM
 
Location: OK
2,747 posts, read 6,488,743 times
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My only advise to you is ..... have an appraisal done. Spending a few hundred dollars can save you thousands ......
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Old 10-15-2008, 11:52 AM
 
Location: Pennsylvania, USA
5,217 posts, read 4,263,199 times
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Quote:
Originally Posted by hammy5 View Post
I bought my home in December of 03 for $385,000 and between then and now, put in almost $100,000 of upgrades including finsihing the basement (professionaly). I currently have the house listed at $389,900. Would you consider this fair market value? I see that people expect houses to be cheaper than they were bought for in the last 5 years. But does that count on a house that has had so much work done including adding 1000 Sq Feet?

Kristine
There is no way to answer that unless we know what houses in your neighborhood are going for.

You need to take a house with as many beds/baths as yours with a finished basement .. close in property size etc. and see what it closed at to determine the fair market value. It's the only way. A Realtor can help you with that.

What you paid for it in 2003 is not relative to what it's worth today up or down. Most likely if you purchased during the boom you'll either be even (if you purchased at the beginning) or you'll loose money (if purchased at the height) but again. the only TRUE relevance to fair market value is what has closed in and around your home that is comparable to yours.
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Old 10-15-2008, 12:14 PM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,958 posts, read 19,180,549 times
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Quote:
Originally Posted by hammy5 View Post
Nothing in my entire city is selling that is over $250,000.
The classic definition of fair market value is, is what a willing seller who does not have to sell and a willing buyer who does not have to buy agree on.

If there is nothing selling over $250K, there may be no buyers looking. We have a similar situation here for properties over $400K.

To take it to the extreme, if there aren't any willing buyers, your home is worth nothing. Obviously that's not true, but you might have to lower the price to under $250K (I'm not suggesting you do) to be able to sell it.
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Old 10-16-2008, 06:37 AM
 
5,462 posts, read 5,938,841 times
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I was thinking the same thing about "no buyers above $250K". But it might not mean that the buyers aren't out there - it could be that sellers above $250K are all overpriced. So the OP in this thread might not have to reduce their price to under $250K to sell, just reduce it enough to look like a good value compared to all of the other houses in the over-$250K price range. So maybe not sub-$250K, but almost certainly significantly enough below comps to really get attention.
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Old 10-16-2008, 07:31 AM
 
945 posts, read 1,777,996 times
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Quote:
Originally Posted by KCfromNC View Post
I was thinking the same thing about "no buyers above $250K". But it might not mean that the buyers aren't out there - it could be that sellers above $250K are all overpriced. So the OP in this thread might not have to reduce their price to under $250K to sell, just reduce it enough to look like a good value compared to all of the other houses in the over-$250K price range. So maybe not sub-$250K, but almost certainly significantly enough below comps to really get attention.

Another one of your "ridiculous posts", KCformNC. As usual, if a home is not selling, it's because it's overpriced, in your mind. And hence, the reason for the ruin of the real estate market from this type of assumption of many. I'm sure this guy has his house priced ABSOLUTELY fair and probably lower than he should as he's trying to accomodate the market by the already big drops in percentages over the last 2 years. All it means is that his price range is a tough price range right now. So becasue there are no buyers in that range, he should give it away for less than 250,000? He also has a 1,000 sq. ft. addition that the others in his price range don't have! Never mind there are still buyers paying much more in other "price ranges". In our area, the price range that suffored most was between 500 and 600 thousand. They were selling under that and OVER that as well, just the inbetween was hardest hit. Did it mean anyone in that price range should lower to 300-400 thousand? ABSOLUTELY NOT.

HAMMY, hang in there and don't let this type of advise make you insecure! There is no question that all inventory is having a tough time selling right now but the worst thing any seller can do right now is to give into this type of mentality. I'm sure your bank has given your home a value well within your asking and you are right on with your competitors and comps, so it's not you. The right buyer will come along! How long have you been listed? Most homes are taking over 10 mo. to sell right now but the ones selling are not "slashing their prices" by what these posters are suggesting. They are just waiting for the right buyer!
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