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I have bought several pieces of mountain property in my life. I own a home in the mountains right now. I have worked with some really fine realtors who were able to show me some similar properties to the ones I narrowed my search to - and that helped a lot with pricing and my decisions about "present value."
Loves was explaining this very well, I thought. All mountain property varies to different degrees. You can have a 2 acre lot even in the same development and the fact that one of them has a spectacular view can make that one more "valuable." And then there is the topography - lots of grading to put in a driveway? Lots of drilling for a well? Or is there public water? Many trees to deal with - expensive to get an arborist in! House on a slope - what about erosion? How much for proper landscaping?
All those factors can make the "value" of two properties very different. They can both have a 2000 sq. ft house sitting on a 2 acre lot . . . but so many variables in each property.
In the end, any piece of property is worth what a willing and able buyer is offering at the moment. If a buyer truly wants to sell . . . then it's a matter of deciding - can I live with this offer?
I have never bought a piece of property that was purchased at considerably below "market value." If the property is $100,000 and I think it is worth $75,000 . . . my offer is $75,000. If the seller gets "insulted" - so what? It's all business. My estimation of "worth" is just that - my estimation.
I have noticed that prices around my mountain home have come down - but a lot of them need to come down further b/f they are realistic. At the same time, if I were to put my house on the market, I am told I would need to ask about $75,000 less for it than I would have asked in 2007, if that tells you anything.
Anyone wanting to buy mountain property right now should consider several things. Yes, prices may go down further, but unless a buyer really wants to sell . . . then listing prices will stay high. A lot of folks don't really NEED to sell their homes, so they think if they hang on, prices will go back up (they won't - not any time soon). Until people get this message, you are gonna see them miffed at offers that they feel are "beneath the property's real value." However, those that truly need to sell will be willing to just get out of the obligation. So my feeling is . . . nothing ventured, nothing gained. Make your offer and if the seller doesn't budge . . . there is always another property somewhere . . . go find it and make an offer, lol.
Thank you very much for your level-headed and helpful post. You have mentioned many things that I have noticed and discussed with my realtor...yes, I do have a buyers agent who has lived here all his life and is a terrific guy. We talked last evening while going to look at a property, and he admits that this is an especially difficult time to figure out "fair market value" and that it is just what you said...what a buyer is willing to pay and whether the seller is motivated or not.
I don't understand the post that keeps referring to a knowledgeable buyers agent "who knows historical values" in the area. What is the relevance of historical values??
I have looked at everything on the market that even remoteley resembles what I am looking for to try to get a feel for prices. I have seen things sell very close to asking, properties stay on the market for YEARS, and then I have seen other properties sell WAY below asking in a very short time. It is mind boggeling. I think you hit it when you said it all depends on seller motivation. I must say that I don't understand why anyone would bother putting their property up for sale in this market in this area at this time unless they really needed to, but I guess that is not the case.
As for the heated controversy on buyers agents, it seems to me that they are as good as their character. I believe that my agent is an ethical guy who will do his best to fulfill his legal obligation to look out for my best interest. But it is also true that a buyers agent doesn't make any money unless you buy a house even though they are paid from the proceeds of the sale by the seller. So it sort of goes against THEIR best interest encourage you to offer a lot less for a property because that cuts into their commission. It doesn't seem like a real good arrangement, does it?
Thank you very much for your level-headed and helpful post. You have mentioned many things that I have noticed and discussed with my realtor...yes, I do have a buyers agent who has lived here all his life and is a terrific guy. We talked last evening while going to look at a property, and he admits that this is an especially difficult time to figure out "fair market value" and that it is just what you said...what a buyer is willing to pay and whether the seller is motivated or not.
I don't understand the post that keeps referring to a knowledgeable buyers agent "who knows historical values" in the area. What is the relevance of historical values??
I have looked at everything on the market that even remoteley resembles what I am looking for to try to get a feel for prices. I have seen things sell very close to asking, properties stay on the market for YEARS, and then I have seen other properties sell WAY below asking in a very short time. It is mind boggeling. I think you hit it when you said it all depends on seller motivation. I must say that I don't understand why anyone would bother putting their property up for sale in this market in this area at this time unless they really needed to, but I guess that is not the case.
As for the heated controversy on buyers agents, it seems to me that they are as good as their character. I believe that my agent is an ethical guy who will do his best to fulfill his legal obligation to look out for my best interest. But it is also true that a buyers agent doesn't make any money unless you buy a house even though they are paid from the proceeds of the sale by the seller. So it sort of goes against THEIR best interest encourage you to offer a lot less for a property because that cuts into their commission. It doesn't seem like a real good arrangement, does it?
Yes, it is a confusing time to figure out what a good offer is. But just weigh things out and go for it if you find something you like!
Over 25 years ago, I had my broker's license, so I got an inside view on how things worked. One thing I quickly found out - the trustworthy, ethical agents are the ones who stay in business. Why? So much of a realtor's business is from word of mouth recommendations.
And that brings us to why it IS in an agent's best interest to help you reach your goals, rather than push you into paying more than you should.
If you have a good experience with a realtor, then you will recommend him/her and that is how an agent stays in business.
My experience has been - I do lots of research on my own. This house I own now - I went to the Register of Deeds, pulled up the plat, checked out the tax stamps to find out what the property had been purchased for in the past . . . and checked on surrounding properties at the same time - to compare what other lots were selling for. This is a good idea, as what I discovered was the listing agent had left out a crucial piece of info - the owner actually had 2 lots. When we checked further, we ascertained that he was selling them BOTH with the house.
Had I not checked this, I would have had a surprise at closing. I am in a resort, so that second lot would have meant paying additional HOA fees quarterly. But I found where the two lots had been treated as one lot - informally - by previous club management. So I contacted the club and got that all straightened out ahead and a statement added showing agreement that the two lots would be treated as one, wh/ also meant I was bound to never sell the other lot separately. I also found out that the 2nd lot didn't percolate . . . so that meant no one could build on it, anyway. But I also found out that public sewer was scheduled to be run into that area of the club . . . so if I wished at some point to tear down the small ski chalet I was buying and build a larger home on the lower lot . . . fine!
So I suggest to folks to do some legwork on their own. You never know what you will find out. And take things into consideration, such as sewer and water, landscaping/tree management. These items can add up to a LOT of money down the line.
And finally - I would never make an offer on property without it being at least 10% below asking price - even if I think it is fairly priced. That still leaves room for the seller to negotiate with you if they wish. If they flat turn you down . . . they just don't wanna sell.
I own a realty firm about 40 minutes south of Asheville in a town called Tryon and the market is really picking up...not just activity but actual contracts (Thank God!). It's great to now see more pendings and solds in the MLS! Granted a lot of that activity is for homes under $200,000 but some higher-end stuff is moving again as well....hope it continues.
Glad to hear it. In this tough market, it's good to see some movement.
[quote=ttrib;10811968]Thank you very much for your level-headed and helpful post. You have mentioned many things that I have noticed and discussed with my realtor...yes, I do have a buyers agent who has lived here all his life and is a terrific guy. We talked last evening while going to look at a property, and he admits that this is an especially difficult time to figure out "fair market value" and that it is just what you said...what a buyer is willing to pay and whether the seller is motivated or not.
I don't understand the post that keeps referring to a knowledgeable buyers agent "who knows historical values" in the area. What is the relevance of historical values??
I have looked at everything on the market that even remoteley resembles what I am looking for to try to get a feel for prices. I have seen things sell very close to asking, properties stay on the market for YEARS, and then I have seen other properties sell WAY below asking in a very short time. It is mind boggeling. I think you hit it when you said it all depends on seller motivation. I must say that I don't understand why anyone would bother putting their property up for sale in this market in this area at this time unless they really needed to, but I guess that is not the case.
As for the heated controversy on buyers agents, it seems to me that they are as good as their character. I believe that my agent is an ethical guy who will do his best to fulfill his legal obligation to look out for my best interest. But it is also true that a buyers agent doesn't make any money unless you buy a house even though they are paid from the proceeds of the sale by the seller. So it sort of goes against THEIR best interest encourage you to offer a lot less for a property because that cuts into their commission. It doesn't seem like a real good arrangement, does it?[/QUOTE]
Excellent post! The only comment I have is that it is in the buyer agent's best interest to negotiate the best price possible. A good buyer agent 's business strongly depends on referral business from satisfied clients. Keep in mind that if a client overpays by $10,000, the typical extra compensation to the buyer agent is $150. Compare that to 1 good referral from a satisfied client.
Last edited by Belmarin; 09-18-2009 at 09:15 AM..
Reason: Needed to add reply
The only comment I have is that it is in the buyer agent's best interest to negotiate the best price possible. A good buyer agent 's business strongly depends on referral business from satisfied clients. Keep in mind that if a client overpays by $10,000, the typical extra compensation to the buyer agent is $150. Compare that to 1 good referral from a satisfied client.
I would never purchase a home in an area that I wasn't intimately familiar with without a buyer agent, especially if buying an older home. Many agents really do have specialized knowledge of a particular market, and one would be foolish not to take advantage of that, imo.
The buyer agent certainly does have incentive to make a sale go through, which can cloud the agent's objectivity, but there are plenty of checks and balances within the system (as you have pointed out) to help keep things honest.
And as with any service, there are good, honest folks who do a great job, and there are others who aren't.
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I don't understand the post that keeps referring to a knowledgeable buyers agent "who knows historical values" in the area. What is the relevance of historical values??
I have looked at everything on the market that even remoteley resembles what I am looking for to try to get a feel for prices. I have seen things sell very close to asking, properties stay on the market for YEARS, and then I have seen other properties sell WAY below asking in a very short time. It is mind boggeling. I think you hit it when you said it all depends on seller motivation. I must say that I don't understand why anyone would bother putting their property up for sale in this market in this area at this time unless they really needed to, but I guess that is not the case.
I thank Ani for her informative post too
My reference to "historical values" simply meant that a good, long term realtor will be very familiar with what properties have been worth over time and why they may be depreciating or appreciating in any given market. They will have been watching what was going on around them for years and what the trends seem to be toward values going up or down.
Say for instance you found a peice of property you really liked but thought was way overpriced (for whatever reason). A realtor who knows their area would be able to tell you what that particular areas attributes are that make a property more valuable (or less valuable) than the price reflects. She/he has a history with the area they live in that could give you a lot of behind the scenes info you can't get down at the courthouse records department.
They would know perhaps that an apple orchard had once stood on the site you are interested in and that now there may be some ground water contamination from pesticides - making the property less desirable for sure. That kind of thing.
As far as people putting their property up for sale without being extremely motivated to sell? Well, many people like to just test the waters and see what kind of interest they might get. When they don't like the offers they get they can afford to just pass them up because they really don't have to sell
My reference to "historical values" simply meant that a good, long term realtor will be very familiar with what properties have been worth over time and why they may be depreciating or appreciating in any given market. They will have been watching what was going on around them for years and what the trends seem to be toward values going up or down.
Say for instance you found a peice of property you really liked but thought was way overpriced (for whatever reason). A realtor who knows their area would be able to tell you what that particular areas attributes are that make a property more valuable (or less valuable) than the price reflects. She/he has a history with the area they live in that could give you a lot of behind the scenes info you can't get down at the courthouse records department.
They would know perhaps that an apple orchard had once stood on the site you are interested in and that now there may be some ground water contamination from pesticides - making the property less desirable for sure. That kind of thing.
As far as people putting their property up for sale without being extremely motivated to sell? Well, many people like to just test the waters and see what kind of interest they might get. When they don't like the offers they get they can afford to just pass them up because they really don't have to sell
If real estate agents can stop you from buying homes in future superfund cleanup sites, then who exactly was it that sold the homeowners the homes to begin with?
Personally I am just waiting for real estate to crash even more. Don't listen to the rah rah cheerleader real estate agents it's the second great depression. What used to cost 1.2 million during the bubble years is going to cost 600k. The 5 bedroom mcmansions are only going to be 300k etc. THe starter homes are going all the way down to 75k-150k. Just rent an apartment and leave your money in gold coins. The gold is going to appreciate in value as real estate crashes, and the government prints money to do more bailouts and causes more inflation. Either way with gold your hedged for deflation or stagflation, since gold was the best performing asset during the great depression, and 1980's stagflation. There is over 1 quadrillion dollars worth of derivatives out there and world GDP is only 50 trillion, massive defaults are ahead. There are no greenshots we are all being lied to, so we mine as well take advantage of the opportunity to get a great forclosed home when the time is right. Just wait a few more years for the reality to hit the deluded sellers that are in lalalal land, it's a buyers market now. I'm eying Hawaii for the whole tropical paradise thing, or NC for the forests, or New Hampshire for no state income taxes =).
If real estate agents can stop you from buying homes in future superfund cleanup sites, then who exactly was it that sold the homeowners the homes to begin with?
Here's the thing...I've been as nice and non confrontational with you as possible but you STILL want to try to argue. I have agreed to disagree with your opinons (which I strongly do) so I am not going to respond to any more of your posts.
You are under the misinformed opinion that this site is a debate forum. IT IS NOT. This is an informational forum meant to help people looking for advice on moving to or living in certain areas. It is my goal to be helpful only. Since you like debating and arguing so much I'd like to suggest you visit the political forum.
Yes, it is a confusing time to figure out what a good offer is. But just weigh things out and go for it if you find something you like!
Over 25 years ago, I had my broker's license, so I got an inside view on how things worked. One thing I quickly found out - the trustworthy, ethical agents are the ones who stay in business. Why? So much of a realtor's business is from word of mouth recommendations.
And that brings us to why it IS in an agent's best interest to help you reach your goals, rather than push you into paying more than you should.
If you have a good experience with a realtor, then you will recommend him/her and that is how an agent stays in business.
My experience has been - I do lots of research on my own. This house I own now - I went to the Register of Deeds, pulled up the plat, checked out the tax stamps to find out what the property had been purchased for in the past . . . and checked on surrounding properties at the same time - to compare what other lots were selling for. This is a good idea, as what I discovered was the listing agent had left out a crucial piece of info - the owner actually had 2 lots. When we checked further, we ascertained that he was selling them BOTH with the house.
Had I not checked this, I would have had a surprise at closing. I am in a resort, so that second lot would have meant paying additional HOA fees quarterly. But I found where the two lots had been treated as one lot - informally - by previous club management. So I contacted the club and got that all straightened out ahead and a statement added showing agreement that the two lots would be treated as one, wh/ also meant I was bound to never sell the other lot separately. I also found out that the 2nd lot didn't percolate . . . so that meant no one could build on it, anyway. But I also found out that public sewer was scheduled to be run into that area of the club . . . so if I wished at some point to tear down the small ski chalet I was buying and build a larger home on the lower lot . . . fine!
So I suggest to folks to do some legwork on their own. You never know what you will find out. And take things into consideration, such as sewer and water, landscaping/tree management. These items can add up to a LOT of money down the line.
And finally - I would never make an offer on property without it being at least 10% below asking price - even if I think it is fairly priced. That still leaves room for the seller to negotiate with you if they wish. If they flat turn you down . . . they just don't wanna sell.
Thanks once again for sharing your knowledge and experience. You are absolutely correct that if you search, you can find out a lot on your own. It is good for you that you didn't rely on realtors to tell you that you were actually buying two separate lots that would have cost you twice the maintenance fees! I found that one of the two counties I am looking in has the GIS mapping on-line which is fantastic....sometimes you can find out what they paid for the property and when. Other times the information isn't there. But you can always find out what the tax value is, for whatever that is worth which seems to be very little. And if you have tons of patience, you just might be able to come up with something resembling a "comp"!!The other county I'm looking in, you have to go to the tax office and you have to know the name of the owner of a property to look it up. I feel like my job right now is "finding a house", so I don't mind the extra time, but if you don't know the owners name, you can't look it up. I have learned A LOT about real estate in this area and I suppose that it will take me falling in love with a piece of property to get me to actually make an offer. Renting is getting old, though.
I am looking for mountain views, privacy and prefereably southern exposure. I'm not that concerned about the house itself.
Thanks again!
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