What to offer in this market - 95% - 90% ? (Atlanta, Lawrenceville: apartment, mortgages)

[LarryLarry]

What is the general thought right now on how much to offer on a single family resale home in the Lawrenceville/Duluth/Grayson general area. We are looking in the $275k-$350k range if that helps.

I know there are other factors related to individual houses and certain subdivisions, but I'm wondering how much of a buyer's market it really is...

[SaraSatin]

I don't think there is a standard. If it's in an area where the houses are selling, and you see that the house is priced fairly and doesn't need a whole lot of work for the money then making an offer closer to asking price would be ok. If it needs a lot of work, is priced higher than others in the neighborhood, or happens to be sitting empty for awhile then you can make a lower offer and probably end up settling at a very good price. If you have a buyer's agent they can help you figure out what the comps in the area have sold for and tell you how long it's been on the market.

[LarryLarry]

Thanks Sara. I appreciate your thoughts. However, they are of the traditional wisdom type. They still apply of course, but I'm kind of wondering how much, if any 'extra' the price can be reduced because of the current market.

[sj73]

It's hard to answer your question, but I do believe that certain areas of Lawrenceville is tougher for negotiations than other parts. Even though the market is a buyer's market, there are still areas of metro Atlanta that aren't affected, like East Cobb and are selling houses just as quickly.

I think that in Lawrenceville, you have the Collins Hill area and the areas near historic downtown Lawrenceville and further east to Snellville (off 124) where you find higher costs that aren't having trouble selling a home. A friend of mine lives off Sweetgum Road (located about five miles from downtown Lawrenceville) sold their home at asking price in two weeks. They weren't even prepared and are now living in an apartment until their new homes is finished. A relative lives near Duluth and their home has been on the market for 6 months with three price reductions.

So, I think that it depends on where you are looking. If the demand is high in a certain location (bid as close to the asking price as possible), you would either get a counter-offer or they would turn you down for another buyer who offered more. Timing is still a factor in this market.

[goozer]

It really all depeneds how the property is priced to begin with. Ideally, your realtor can guide you by giving you his/her opinion on whether the property is priced high, fair, etc. Of course, you should not feel constrained by your realtor's opinion. If your realtor tells you a property is fairly priced at $250k, you have to make the ultimate determination of what is a fair price to YOU.

I do think that there are a lot of people who list their properties at prices that are way too high and the property owners themselves are hoping to get 90% of their list price (which still might be too high). But on the flip side, if you find a house that is truly listed at a fair price, you risk losing it if you offer 90% and someone else, recognizing that the house is indeed priced fairly, offers more.

[LarryLarry]

Darn, I knew I'd have to resort to math and common sense ;-)

Thanks all, it is helpful to hear from people that aren't directly affected/involved with the purchase.

We are coming out to the Lawrenceville area this Sat 10/6 for our 3rd visit. This time we are bringing the checkbook - hence all the questions...

[Twinkletoes]

I read somewhere that the average for the Atlanta area was 97% of asking price.

Of course, that's just an average. The real question is, how much is the home worth to you?

[Steven2149]

Asking for 10% off of list price is really just a lowball offer. Most people take into consideration the market situation when setting an initial list price, if their agent is doing their homework. Market value is market value, not 10 percent off of market value. A home should sell at market value. Not to wear out the word, but in a nutshell, I'm just saying that if a home is priced right, it should sell within a few percent of that price. I for one, would ignore an offer that was trying to buy a 300k home for 270k. That is very close to an insulting amount.

[goozer]

I think another factor to consider in buying a house is how long has it been on the market. If the house has languished on the market for six months, a seller may not be happy with an offer that is 10% below his list price (especially if he has already reduced the price once or twice), but on the other hand, at least that offer would open a dialogue that might result in a potential sale. If the seller feels 10% below list is too low, he could counter at 5% below list, buyer than could accept that or counter offer again.

I think you are most likely to offend a seller with a low ball offer when that seller has just recently listed the house. I think all sellers think they are putting a fair price on their house when the list it initially, but sometimes the market lets you know that the initial price was too high (thus the reduced prices that occur when houses sit on the market for weeks without an offer).

I think for "low ball" offers to truly work, there has to either (1) be something wrong with the house, or (2) the seller is distressed and needs to sell to the first person to come to the table. The fact is that nice houses in nice neighborhoods that are fairly priced and desirable to you are going to also be desirable to other people for the exact same reason. If you find a really great house that others might be equally interested in, you must use caution in making a low ball offer.

[brook2ga]

Friends of mine just bought in Duluth and offered 90-95% and it was accepted. I think it depends on the seller's situation. There's a lot of vacant homes on the market, and I'm betting the sellers are pretty motivated, especially if they're carrying two mortgages.