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Hi everyone, we will be starting our house hunting in the next few weeks and, while doing research, came upon the following...
Charlotte area sales stats (Monthly Reports) show Sales Price / List Price has been around 86% lately. During the peak (around '06), this number was 97%.
Now, my question for those that are still following.
I know areas in Charlotte vary greatly as far as desirability, but would it be safe to assume that our offers should line up with these numbers? I just want to make sure I'm not missing something here. We are new to the area and want to make sure we are approaching the house hunting with a clear mind.
Thanks for any input. I'll be asking my realtor the same question, but I figure it doesn't hurt to get some opinions.
It really just depends on where you specifically decide to make offers.
Your realtor can get all the sold comps for homes you like. Those numbers will help you to know pretty accurately what you will have to offer on a house to get it.
I agree with LovesMountains...if a home is priced right, then your offer should be closer to its list price. On the other hand, if it is overpriced, then that would not be the case. Have your realtor run the sold comps for the neighborhood (also look at actives and those under contract but not yet closed in terms of absorption rate and number of distressed on the market).
House prices in Charlotte on average over the last 2.5 years have been dropping 1%/month and don't show any signs of reversing this trend. The higher end and higher profile neighborhoods have suffered a much greater loss than this. If you want some very obvious proof of this, go uptown and look at what happened to the very expensive condos in the skyscrapers. One is filing lawsuits to get people to close on their contracts, some were abandoned in mid construction, and others had to convert to apartments. This was a market were people were paying to get into lotteries to make offers. In short it is a disaster. Single family homes are in a similar state.
With this in mind, and if you have decided you must own a piece of property here, then you should adopt a "take no prisoners" approach to offers on housing. That is unless you don't mind working a job to pay for someone else's bad mistakes in real estate. So since you are asking for advice, I will say two things. First, don't take any pricing advice from real estate agents or bankers, they are making money on the deal and any deal is a good deal, for them. Second, if your first offer is not insulting to the seller, then you offered too much.
Better yet, I would suggest renting here for a year instead of buying right off and becoming a casualty of the current housing mess. This will give you time to understand what is going on in Charlotte and also give you an idea of a place to live that is good for you.
Thanks for the response folks, especially the last one. It's a tough thing to talk about if you're a seller, but the reality is we don't know how much more the market will fall.
If anyone has any more advice/experience, please go ahead and post.
We recently purchased a home and I had the same question in mind - at the beginning of our search.
Later on, as we focused on an area and fewer neighborhoods, we got to know each house available and the value of each recently sold house (Zillow site was a great tool, so I did not have to bug our agent too much). Your agent will make a market evaluation but they are too generic in my opinion. I like to compare same type property with a couple of intangibles (which are important to me): backyard, street type, model, updates.
My advice is to find the two best available houses that you really like and compare them against similar sold ones in the last year (same area). Make an offer for #1 choice that seems fare to you (based on your research); prepare to plus another 1%-2% and walk away if they don't agree. If no agreement (give them time), you can try the same approach with #2 choice.
Reason to have a second choice (as backup) is to keep you "emotionally unattached" on only one house.
Worked for us, and we got lucky to get the first choice. But it took a couple of very long, nail biting days
Remember is a buyer's market. Good luck!
if your first offer is not insulting to the seller, then you offered too much.
This methodology, along with buyers trying to renegotiate the contract after ratification, are common practices in other countries. They are however, frowned upon in most regions of the U.S.
if your first offer is not insulting to the seller, then you offered too much.
Wow, you sound like the guy who made the first offer on our last house.
They also took the point of view that everyone automatically overpriced. They lost out on our house because when faced with multiple bids, there was no way we wanted to deal with a jerk through the rest of the process.
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They also took the point of view that everyone automatically overpriced. They lost out on our house because when faced with multiple bids, there was no way we wanted to deal with a jerk through the rest of the process.
Good for you as I applaud anyone who doesn't listen to the "common wisdom" and instead uses a little common sense. My point is that for anyone buying and selling a home your first priority are your interests and don't bother with "tea parties", emotions, common practice, etc etc etc suggested by those in the industry. These things are for people who don't think for themselves and are willing to bend over for those who are going to take full advantage of them. (real estate and finance industry) It's a business transaction, nothing more, nothing less.
My advice applies equally to both seller and buyer, but since the OP was asking from the perspective of being a buyer this was the advice I gave. If you did well as a seller, then I congratulate you. Sorry that you felt my advice was that of a jerk. it wasn't meant to be that way.
"Percent below list price" ISN'T something that you need to consider BEFORE you even start house hunting.
Once you find a house you want in the price range you can afford, then you can worry about what percent of the list price to offer.
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