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Sorry but I didn't real through all the posts but the tag line got me.
I showed a home today that was priced as a short sale for 620K. Comps are around 575K-780K. My buyers want to offer 270K!!!!!!! That's not a lowball, that's a joke!!!
I low ball everything. From houses to cars, hell even on ebay. You never know if it will work unless you try. We purchased our house for 575K, the price was 625K, which was reduced from 825K (how much it was built for), comps were in the 600-650s. Not a shortsale or foreclosure. Hubbys car was 52K, walked out of the dealership for 39K. I do the same for artwork, etc. Like I said, you never know if you don't try. Why spend the money if you don't have to? If they are insulted, they are too sensitive and should not be in negotiation.
A low ball offer is a offer tested by the buyers, to see if the Seller will bate. Use to happen all the time to us. I remember one time one home we had listed was for $250,000 the offer came in at $199,999 i would sure say that is a low ball offer. The seller would not budge, and the buyer knew this was a good asking price, by now, our seller was highly insulted, and did not even want this buyer to purchase his home, it was beautiful, with a large yard. Buyer came back at $235,999 THE SELLER countr offer back at $245,999 the buyer did not accept and by this time, we had a very irate seller on our hand. This buyer really should have accepted those terms, it was a gorgeous home, and priced right,, but they needed to move to another State. Turned out our Seller ended up getting $248.599 and offer accepted, this really depends on the sellers motive to sell quickly and why.
I don't understand the reliance on comps in this market. Hasn't anyone read the paper in the last three years? Where I live, there have been wild swings up and then doosey swings down, and then very often no sales in the past six months. And you have no idea what going to happen in twelve months. It's historic, unprecedented as far as I know. If you are on a block or townhouse complex and there have been no sales, and then one unit sells for some bizarre price--that is the comp? Absolutely everyone must now sell for that price? Who made that seller God? What if the buyer was an idiot and paid too much? What if the seller was on drugs and let it go for too little? I think this idea of comps is dumb. In this market, I'd say: what are you willing to pay? what are you willing to offer? (and maybe, what are rents and what is likely to happen next year, based on the economic outlook?)
I don't understand the reliance on comps in this market.
Hasn't anyone read the paper in the last three years? Where I live, there have been wild swings up and then doosey swings down, and then very often no sales in the past six months. And you have no idea what going to happen in twelve months. It's historic, unprecedented as far as I know. If you are on a block or townhouse complex and there have been no sales, and then one unit sells for some bizarre price--that is the comp? Absolutely everyone must now sell for that price? Who made that seller God? What if the buyer was an idiot and paid too much? What if the seller was on drugs and let it go for too little? I think this idea of comps is dumb. In this market, I'd say: what are you willing to pay? what are you willing to offer? (and maybe, what are rents and what is likely to happen next year, based on the economic outlook?)
One of the quickest ways to make comps irrelevant and take the concept off the table is to cease third party and taxpayer involvement in funding the purchases.
IOW, Buyers PAY CASH. Of course, it may be difficult to forsee a generation of buyers who don't care to see supporting data for valuations. But at least we would have the states, the banks, and Uncle Sam out of the game.
[b][color=red]One of the quickest ways to make comps irrelevant and take the concept off the table is to cease third party and taxpayer involvement in funding the purchases.]
I'm a little uneducated, because I have only bought one apprtment, (but have been looking for a house for some time)--but is there a third party who asks you to sell or buy at comps? For example, the appraiser and the lender? If so, they are really just causing problems, if the comps are not reasonable compared to rents or the intrinsic value of the house.
Every year I live in my 1-bedroom apartment, (which is paid for), I save more cash. Soon, I will have enough cash. (if the market doesn't fall again)
If a condo recently sold through auction for $56,000 and another foreclosure just went into contract for $72,000, what would be a "reasonable lowball" cash offer for two other similar REO condo's in the same complex? All the above condo's were listed for about $90,000.
I don't understand the reliance on comps in this market. Hasn't anyone read the paper in the last three years? Where I live, there have been wild swings up and then doosey swings down, and then very often no sales in the past six months. And you have no idea what going to happen in twelve months. It's historic, unprecedented as far as I know. If you are on a block or townhouse complex and there have been no sales, and then one unit sells for some bizarre price--that is the comp? Absolutely everyone must now sell for that price? Who made that seller God? What if the buyer was an idiot and paid too much? What if the seller was on drugs and let it go for too little? I think this idea of comps is dumb. In this market, I'd say: what are you willing to pay? what are you willing to offer? (and maybe, what are rents and what is likely to happen next year, based on the economic outlook?)
If comps aren't used what else can the selling price be based on? When the comps don't reflect conditions no one buys houses and then the seller has to lower the price. It's an objective measure. Objective is better than subjective. What are you willing to pay isn't really objective, what you are willing to pay also isn't necessarily what the house is worth. Determining prices based on economic conditions, rents etc, isn't objective either unless you quantify it and that is of course difficult but something I would do for my own reference not necessarily a justification to the seller.
I'm a little uneducated, because I have only bought one apprtment, (but have been looking for a house for some time)--but is there a third party who asks you to sell or buy at comps? For example, the appraiser and the lender? If so, they are really just causing problems, if the comps are not reasonable compared to rents or the intrinsic value of the house.
Every year I live in my 1-bedroom apartment, (which is paid for), I save more cash. Soon, I will have enough cash. (if the market doesn't fall again)
The 3rd party is the lender.
A property is worth what someone is willing to pay - 100% crystal clear, clear as a bell if you're a cash buyer.
But once you need monetary help to make a purchase, it becomes a little muddier because the lender's opinion matters as well.
A property is worth what someone is willing to pay - 100% crystal clear, clear as a bell if you're a cash buyer.
But once you need monetary help to make a purchase, it becomes a little muddier because the lender's opinion matters as well.
We were so confused when pricing the house we just sold. The realtor was suggesting one price, a friends who is a very busy mortage broker was suggesting slightly lower based on what she was seeing, both prices were well below the comparibles for sale and a even below the actual solds. We had the benefit of not needing to squeeze every penny out of this deal, so we priced at the lower suggested price.
We were still lowballed within the first week. I wish we had priced it a bit higher as it seems people were just taking the asking price and automatically taking 15% off for their offer. It worked out OK, as another couple was also interested and there was a bidding war.
But, still, even with trying to under price the comps, we were really surprised at the low offer and the long list of demands it included.
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