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WHAT are they basing their offer on? Certainly not sold comps!
They are basing it on the natural appreciation of home sales before the housing bubble developed. Simply go back and look at comps pre-bubble and add about 4 % a year which was the natural housing trend for the past 100 years. I'm not a banker but this info has been listed everywhere and can be found on the shiller website.
I'm not asking for market prices to return to the 2005 timeframes. I'm not even looking to make money on the sale of my house. I just want to sell it for what I owe on it. I refuse to bring money to the table. If that means waiting to sell, then so be it, but I refuse to lose money on a home that I have put a lot of sweat equity into.
Pittsburgh is one of the areas that did NOT observe high appreciation in homes.
Can you provide me with a link to review the Case Shiller report this Tuesday?
Here's the Standard & Poors Case-Shiller Index link:
Everyone understands that people just want to sell, at very the least, for what they owe.
Unfortunately, in this economy, you might be better taking a lower offer and losing a few thousand dollars now than being stubborn and finding yourself losing several thousand dollars a year down the line.
Location: Pittsburgh--Home of the 6 time Super Bowl Champions!
11,310 posts, read 12,373,524 times
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Quote:
Originally Posted by London Girl
Unfortunately, in this economy, you might be better taking a lower offer and losing a few thousand dollars now than being stubborn and finding yourself losing several thousand dollars a year down the line.
I don't mind losing a few thousand dollars, but not $25-30,000.
Location: Pittsburgh--Home of the 6 time Super Bowl Champions!
11,310 posts, read 12,373,524 times
Reputation: 4938
Quote:
Originally Posted by London Girl
Do you actually HAVE to sell?
No, I don't...but I no longer want to live in the rust belt and I no longer want to put up with harsh winters.
Can you extend the property - put on an addition - if necessary?
It already has an addition on it.
It sounds as if you are not going to achieve the price you want (need).
I believe I will. My competition is priced way higher than mine by about $30,000. My house is priced correctly.
If this is the case, perhaps you would do better to take it off the market.
I did take it off the market from Dec-until last week when I relisted.
Have you visited open houses to see what your competition is?
Yes, and they are listed at higher prices than my house. My kitchen is completely updated--their's isn't. I have a bigger yard. I have a finished basement with wet bar/full bath. New roof.
Has your realtor given you any guidance with regard to any changes you can make to the property that might help you increase its saleability?
She thinks that it will sell and that I have to be patient.
I keep hearing this relationship of someone assuming a seller wants "at least what they owe" number. Huh? For example, most want and is fairmarket for much MORE than they owe, because they either have a great deal of down payment in it, or have owned it for a number of years and the mortgage is paid down considerably, or BOTH. So how has it gotten to sellers wanting what they owe? If a home is valued, IN TODAY'S market (NOT PEAK!!!), at 500k, and they only owe 200K on it because between their down and money towards principle over the years, does this mean a potential buyer should have the leverage of knowing "what they owe" and base their offer or price on that? I promise, as no secret disclosure upfront, the typical seller wants a LOT more than they owe, in this case!
I continue to be amazed how sellers are called delusional if this is what the latest justification is for buyers to base their offers on. What a seller owes has NOTHING to do with what the house is worth, period. Their are still millions of homes on the market that are being sold by traditional homeowners who have been in the home for a long time, taken care of it and updated it in some cases, and this is why, regardless of market conditions, what someone "owes" is irrelevant. You are, once again, making a blanket statement as if all homes on the market were bought at peak with no money in the game, and now want what they paid or "owe" based on that. This is ridiculous. The ones bought at peak know they will not get what they "owe", however, for the same to be true or expected in my example above, no way.
Again, as I know no one likes my "personal examples" as examples, since we owe 55% of the LTV of our home, does that suddenly "set the value" at that 55%? Of course not. The value has NOTHING to do with what we owe on our mortgage. ANd if this really were the case, then I should assume that if we owed 100%, that is what the value would then be? The 45% down was our choice and done for our own personal finances. It does not effect the purchase price of the home and it's current value. If that's how the RE game were to be played, in any market, there would NEVER be a way to figure out home values. Period. Just because someone still walks away with a big check at closing from the SALE of their home, doesn't mean they made a killing or got a run-up peak price. Stop expecting things will come to the point where all sellers need to come to terms of coming to the closing table with "money owed" and check in hand. Unless they have not owned it very long and bought at the high end of peak, they will, after paying what THEY OWE, walk away with the rest of their equity.
I keep hearing this relationship of someone assuming a seller wants "at least what they owe" number. Huh? For example, most want and isfair market for much MORE than they owe, because they either have a great deal of down payment in it, or have owned it for a number of years and the mortgage is paid down considerably, or BOTH.
Here's the rub.....sellers do not determine fair market value, regardless of when they bought or how much they owe, or not.
I just saw another repositioning of an area home, this morning. This lovely home, in a fabulous neighborhood, began its journey at $925K, 21 months ago. The latest repositioning is $599. This seller has lost about $15,500 of their once "perceived" home value, every month, since it first listed.
Had these sellers began at $750-775, there is absolutely no doubt that it would have sold in the summer of 2007, within 3% of the ask. Instead, the seller chose to chase a declining market. They became the stale donut.
There is no reason why this home had to be repositioned at this ridiculous price other than the seller's mistaken belief that they alone determined fair market value and they hired an agent who either did not understand the market or was willing to sustain the owner's fantasy and hang on, for the ride, to the bottom.
This place will sell, this spring. And when it does, it will leave a new ceiling in the neighborhood market place for sales going forward.
Why would any prospective buyer of a comparable home, in this neighborhood, in this depreciating market, pay more than $599?
Here's the rub.....sellers do not determine fair market value, regardless of when they bought or how much they owe, or not.
Yep. Very simple definition which some still don't understand.
I just saw another repositioning of an area home, this morning. This lovely home, in a fabulous neighborhood, began its journey at $925K, 21 months ago. The latest repositioning is $599. This seller has lost about $15,500 of their once "perceived" home value, every month, since it first listed.
Perception is much more clear once the 'blinders' are removed.
Had these sellers began at $750-775, there is absolutely no doubt that it would have sold in the summer of 2007, within 3% of the ask. Instead, the seller chose to chase a declining market. They became the stale donut.
Yes but if he had sold it then, the new owner would have taken a 20% or so hit - there goes his equity.
There is no reason why this home had to be repositioned at this ridiculous price other than the seller's mistaken belief that they alone determined fair market value and they hired an agent who either did not understand the market or was willing to sustain the owner's fantasy and hang on, for the ride, to the bottom.
Everybody else is yelling 'pull up pull up' but they'd rather corkscrew right into the ground. Then nobody wins.
This place will sell, this spring. And when it does, it will leave a new ceiling in the neighborhood market place for sales going forward.
Sad but true.
Why would any prospective buyer of a comparable home, in this neighborhood, in this depreciating market, pay more than $599?
The bar has been reset in this particular market...and this is going to be a common occurance across the RE marketplace.
I keep hearing this relationship of someone assuming a seller wants "at least what they owe" number. Huh? For example, most want and is fairmarket for much MORE than they owe, because they either have a great deal of down payment in it, or have owned it for a number of years and the mortgage is paid down considerably, or BOTH. So how has it gotten to sellers wanting what they owe? If a home is valued, IN TODAY'S market (NOT PEAK!!!), at 500k, and they only owe 200K on it because between their down and money towards principle over the years, does this mean a potential buyer should have the leverage of knowing "what they owe" and base their offer or price on that? I promise, as no secret disclosure upfront, the typical seller wants a LOT more than they owe, in this case!
I continue to be amazed how sellers are called delusional if this is what the latest justification is for buyers to base their offers on. What a seller owes has NOTHING to do with what the house is worth, period. Their are still millions of homes on the market that are being sold by traditional homeowners who have been in the home for a long time, taken care of it and updated it in some cases, and this is why, regardless of market conditions, what someone "owes" is irrelevant. You are, once again, making a blanket statement as if all homes on the market were bought at peak with no money in the game, and now want what they paid or "owe" based on that. This is ridiculous. The ones bought at peak know they will not get what they "owe", however, for the same to be true or expected in my example above, no way.
Again, as I know no one likes my "personal examples" as examples, since we owe 55% of the LTV of our home, does that suddenly "set the value" at that 55%? Of course not. The value has NOTHING to do with what we owe on our mortgage. ANd if this really were the case, then I should assume that if we owed 100%, that is what the value would then be? The 45% down was our choice and done for our own personal finances. It does not effect the purchase price of the home and it's current value. If that's how the RE game were to be played, in any market, there would NEVER be a way to figure out home values. Period. Just because someone still walks away with a big check at closing from the SALE of their home, doesn't mean they made a killing or got a run-up peak price. Stop expecting things will come to the point where all sellers need to come to terms of coming to the closing table with "money owed" and check in hand. Unless they have not owned it very long and bought at the high end of peak, they will, after paying what THEY OWE, walk away with the rest of their equity.
Come on FMV - don't treat people like idiots.
I think everyone on this forum is intelligent enough to understand that talk of sellers wanting to get "at least what they owe" is referring to those who bought high, borrowed high and now have a very slim margin between walking away "breaking even" or taking a loss.
Or those who may have originally put down more equity at the start but refinanced during the boom years and were allowed to take that equity out of their home because the value had risen.
Nobody is referring to sellers who put down a large downpayment being "expected" to sell for 50% of the market value because they have a 50% LTV ratio.
For what it's worth, my home here was purchased with an 80% downpayment.
So of course I wouldn't be selling for 20% of the market value because that would be my "bottom line".
However, if I were to sell in the future, and if recent comps showed that my home, let's say in 2 years time, is worth $30K less than I paid for it then I would list it just below comps and would take that hit on my equity. That's the way it goes when you participate in a market. You have to accept that prices can go down as well as up.
Unfortunately, many sellers who bought at peak (or pulled out money for cars, vacations etc) have very little, if any, equity in their home.
Many are underwater already. For those on the brink, selling for what they owe would be a miracle.
Sadly, many will walk away in debt - some more so than others.
From a buying perspective (and I was on the selling side last year, so I feel for all of you sellers...) it actually makes me even more hesitant to buy in a market "that did not appreciate as much" and is holding value. The market still appreciated at a greater rate than the "normal" appreciation (or at least in the area I am looking it did), just not as much as FL or CA.
PA in particular was also late to start on the appreciation band-wagon and in my opinion it will be late to come down. I am already seeing the signs in our area - the fall market was very quiet and now I only see lower priced properties moving this spring. Anything above $225,000 seems to be sitting and Feb. existing home sales were down in my area - bucking the nationwide stats.
Someone will eventually HAVE to sell and go substantially lower. Then the comps are lower and the chase down begins.
I will not buy in this market unless the home is listed below the most recent comp (and that comp has to be within the last 2 to 3 months). On the flip side, that is how I priced my home when I sold - 5% below the most recent comp and sold within a month. I wrote the check and consider myself lucky to have sold. Sometimes you win and sometimes you lose!
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