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Old 04-04-2013, 10:50 AM
 
Location: Minnesota
959 posts, read 1,735,824 times
Reputation: 754

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There is a short sale that I am interested in making an offer on. It is a fully furnished (although the furnishings are terrible) vacation home in a short term rental community. I have seen bank owned and short sale homes that are unfurnished go for around $145,000-$155,000. The listing agent listed this place at $135,000 which obviously to me, is way underpriced. I want to make an offer on the house and am not sure what to offer. At first we thought $150,000 - but then thought maybe $160,000 because right now the non-short saled homes that are furnished are going for $168,000-$170,000.

So does anyone have an opinion on what I should offer. My agent said either price and that neither are a gte. that I will get it. I don't want to overpay - but don't want to miss the boat if I am not in the ballpark.

Any thoughts?
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Old 04-04-2013, 11:04 AM
 
Location: Martinsville, NJ
6,163 posts, read 12,216,518 times
Reputation: 3979
Quote:
Originally Posted by hammy5 View Post
There is a short sale that I am interested in making an offer on. It is a fully furnished (although the furnishings are terrible) vacation home in a short term rental community. I have seen bank owned and short sale homes that are unfurnished go for around $145,000-$155,000. The listing agent listed this place at $135,000 which obviously to me, is way underpriced. I want to make an offer on the house and am not sure what to offer. At first we thought $150,000 - but then thought maybe $160,000 because right now the non-short saled homes that are furnished are going for $168,000-$170,000.

So does anyone have an opinion on what I should offer. My agent said either price and that neither are a gte. that I will get it. I don't want to overpay - but don't want to miss the boat if I am not in the ballpark.

Any thoughts?
The first step is to figure out what the house is worth, compared to other similar homes that have recently sold. Forget for the moment that it is a short sale, and ignore the list price. (On a short sale, the usual purpose of the list price is to attract as many potential buyers as possible and generate multiple offers.) Consider the market value of the property. You say you've seen furnished properties sell for a certain price, but you don't mention of those properties are substantially similar to this one. How does this house compare to recent sales in terms of location, size, number of rooms, age, condition, and amenities? I would suggest forgetting completely about the furnishings. Even if they were decent, that's a pittance compared to the price of the actual property.
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Old 04-04-2013, 11:11 AM
 
Location: Minnesota
959 posts, read 1,735,824 times
Reputation: 754
Quote:
Originally Posted by Bill Keegan View Post
The first step is to figure out what the house is worth, compared to other similar homes that have recently sold. Forget for the moment that it is a short sale, and ignore the list price. (On a short sale, the usual purpose of the list price is to attract as many potential buyers as possible and generate multiple offers.) Consider the market value of the property. You say you've seen furnished properties sell for a certain price, but you don't mention of those properties are substantially similar to this one. How does this house compare to recent sales in terms of location, size, number of rooms, age, condition, and amenities? I would suggest forgetting completely about the furnishings. Even if they were decent, that's a pittance compared to the price of the actual property.

The other properties are exactly the same as far as size and rooms - it is just that some are furnished and some are not. The ones that are not are going for $145,000-$155,000 and the furnished ones are going for $168,000-$170,000. So I am thinking of putting an offer in at $160,000 because the other ones that have sold for more have a better view and a better back yard.

Does that make sense?
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Old 04-04-2013, 11:17 AM
 
Location: Martinsville, NJ
6,163 posts, read 12,216,518 times
Reputation: 3979
Quote:
Originally Posted by hammy5 View Post
The other properties are exactly the same as far as size and rooms - it is just that some are furnished and some are not. The ones that are not are going for $145,000-$155,000 and the furnished ones are going for $168,000-$170,000. So I am thinking of putting an offer in at $160,000 because the other ones that have sold for more have a better view and a better back yard.

Does that make sense?
Based purely on the few lines of info shared here, that seems a reasonable number, especially if you & your agent agree that it's a fair market price. Do you happen to know what is actually owed on the property? And it sounds as if this may be an investment property for you, not a personal one. At that price, will the current rental rate make sense?

I don't work in a vacation market, so perhaps I view things slightly differently, but I am more than a little surprised that a few rooms of furniture will generate an additional 13 to 20 thousand dollars. That's 10% of the property value!!
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Old 04-04-2013, 11:26 AM
 
Location: Minnesota
959 posts, read 1,735,824 times
Reputation: 754
Quote:
Originally Posted by Bill Keegan View Post
Based purely on the few lines of info shared here, that seems a reasonable number, especially if you & your agent agree that it's a fair market price. Do you happen to know what is actually owed on the property? And it sounds as if this may be an investment property for you, not a personal one. At that price, will the current rental rate make sense?

I don't work in a vacation market, so perhaps I view things slightly differently, but I am more than a little surprised that a few rooms of furniture will generate an additional 13 to 20 thousand dollars. That's 10% of the property value!!

I don't know what is owed on then property - my agent has been trying to get a hold of the listing agent for 2 days now telling him that we are making an offer and wanted to get a bit more information and he will not call her back. It is frustrating! She also wants to see if there are other offers coming in, but she cannot find that out either unless the agent calls her back.

It is a crazy market, the vacation rental market where I am looking. I have been doing my homework for 2 years to make sure the numbers make sense and thankfully they do.

It is actually furstrating that the furnished ones go for so much more because 9 times out of 10 - the furniture needs to be tossed and you need to get all new stuff. I have been waiting for a vacant one to come along, but they are hard to find in the developement that we are looking in.

Thanks so much for your advice. I think $160,000 is the way to go. I am not sure what other people are coming in at. But I feel that is a fair price and that is what I am willing to pay. I am not trying to get a bargain basement deal so I am confident that my offer is realistic. If they don't choose it, then I just move on to the next one.
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Old 04-04-2013, 12:32 PM
 
Location: Martinsville, NJ
6,163 posts, read 12,216,518 times
Reputation: 3979
Quote:
Originally Posted by hammy5 View Post

Thanks so much for your advice. I think $160,000 is the way to go.
Not advice, really, as I don't even know what market you are in, let alone have enough info to offer actual advice. More like helping you think it through. You're welcome, and good luck.
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Old 04-04-2013, 11:50 PM
 
1,092 posts, read 3,235,945 times
Reputation: 1128
There should be a discount for the aggravation of a short sale. If not, then it is not worth it. Seriously. The value of the used furniture is probably $500. Maybe. You should know the comps, backwards and forwards. Otherwise, you can't know what is appropriate!
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Old 04-05-2013, 06:56 AM
 
65 posts, read 71,208 times
Reputation: 40
The best way forward is for you to work closely with the agent you have chosen.No one here can offer right advice because we lack most of the facts.

All the best.
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