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Old 02-09-2009, 06:22 AM
 
Location: The Beautiful Pocono Mountains
5,450 posts, read 8,736,632 times
Reputation: 3001

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Quote:
Originally Posted by mikieguns View Post
glad you were able to vent a little! your point is taken. although I think it would be better directed to someone else in a different situation (not me!). offering 8 to 10% off the asking price is quite reasonable. especially in this market, most sellers should be happy receiving any offers at all! but I agree with you in regard to buyers who want to "steal a good deal" and try to get 20 to 40% less market price. they should be looking at short sales / foreclosures like you mentioned.
You are right on the bolded point, but the point of sellers just being happy to get an offer??? I don't think you're right on that one.

If sellers are that desparate (sp?), then their homes are probably already short sale.

To sum it up, you are being very fair with your offer in my opinion.
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Old 02-09-2009, 07:53 AM
 
1,552 posts, read 4,622,051 times
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Quote:
Originally Posted by 0706772 View Post
How about a sellers point of view. Other than short sales or foreclosure why would I want to "give my house away", just so the buyer can get a "good deal". The land has vaule, the area you move into has value, you need to think about that part not just the house. The market may go down but it will come back. I've been in my home for 25 years and I can remember two times that the market took a down turn.
I do what to put my house on the market and I need so much to make my move. If the buyers don't like it go, buy a short sale or foreclosure and see what you get. Thanks I need that.
LOL - nice little rant at buyers.

Um, OK. Of course your land has value, of course your house has value, and of course the town has value. The question is: how much value?

There has never been a bigger housing bubble than what we just went through these past 8 years. It's unescapable that house values will go through a bigger fall than what you may have been used to in other down markets.

The days of funding your retirement to a beach house in North Carolina based on selling your NJ house to a bigger sucker are over. If you want to sell, you'll lower your price to a point where your house will sell. It's really that simple. If you don't, you can stay there.

It's not personal, it's business.
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Old 02-09-2009, 10:00 AM
 
353 posts, read 1,017,799 times
Reputation: 218
Quote:
Originally Posted by mikieguns View Post
I'm looking at a ranch home that is listing for around 325K in Central NJ. I did some research and I found out that the current owners paid 310 for the home a few years ago. I would like to land somewhere around that same amount. But in this market, I may even be able to get lower. Does anyone have any thoughts or advice? I was thinking about an opening offer of 290 or 295K, which is right around 10% off the asking price. But I hear that due to the buyers market we are in, many people are starting off even lower.

The reason why I am hesitant to go much lower is because of the market comparables. First off, the $325K asking price has already been lowered. Apparently they started off in the $380K range and that was like 10 months ago. But I believe the property has been on and off the market. It is currently a for sale by owner.

I've reviewed comps from recent sales. Looks like similar homes in the area have recently sold for anywhere from $327 - $340K. One is under contract for $360K. Most of the other asking prices are in the $340 - $360K range. so the house I am looking at is priced well, perhaps below the market comparables. Which is why I am hesitant to low ball the offer.

Any thoughts? much appreciated!
First, a home has the same value whether it was purchased 3 years ago or 30 years ago. Would the price change if the sellers lived there for 30 years and bought the home 30 years ago (big potential gain) vs 3 years ago (little or no gain), or if the house was inherited (100% of whatever they get for the house is profit). The answer is no... buyers should not look at this.

Lowering price: In a market where prices are declining, people either price their home for the market NOW, or they have to lower the price. You are bidding on a home as it is priced today, not 10 months ago.

My advice: Make an offer that is comfortable for you. Generally, the average listing discount is between 4-6%, meaning that a home listed for $100 would sell for $94-96K.

A house that is priced right has already taken the discount. You can offer $1 if you want, but if you want to be perceived as serious, I would not go more than 10% below asking. The worst they can say is no.

Even if a house is priced at $325 that should be $225 and you know it, the seller is not ready to listen to this or else the house would be priced in the mid $2s instead of the mid $3s.

Based on the numbers you provided here, the home seems to be priced right for the current market. Good luck.
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Old 02-09-2009, 10:11 AM
 
786 posts, read 2,656,513 times
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I'd low ball almost anything. Take you time. It's a buyer's market and it will only get worse as layoffs today hit the market later in the year. You may think such a home may never come up to market again, but you'd be wrong.

Don't get stuck with a house that devalues almost immediately. It's not car.
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Old 02-09-2009, 10:14 AM
 
Location: South Jersey
7,780 posts, read 21,802,903 times
Reputation: 2353
offer $290. That will give you plenty of room to come up.. Trust me. He ain't selling it.. My guess is you can buy for $300-310k
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Old 02-09-2009, 10:58 AM
 
353 posts, read 1,017,799 times
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There is more to the equation then the current price.... for example, mortgage rates are about 5% currently... and for every 1% increase in mortgage rates the buyer loses 9% in buying power. Rates will not be low forever, so with due respect to the "sky is falling" crowd this is a good time to buy.

Also... if you are going to live in the house for many years, look long term.
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Old 02-09-2009, 11:28 AM
 
Location: NJ
12,283 posts, read 35,600,748 times
Reputation: 5331
Quote:
Originally Posted by AndrewMensch View Post
There is more to the equation then the current price.... for example, mortgage rates are about 5% currently... and for every 1% increase in mortgage rates the buyer loses 9% in buying power. Rates will not be low forever, so with due respect to the "sky is falling" crowd this is a good time to buy.

Also... if you are going to live in the house for many years, look long term.
then prices will continue to fall, no?
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Old 02-09-2009, 11:40 AM
 
1,552 posts, read 4,622,051 times
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Quote:
Originally Posted by tahiti View Post
then prices will continue to fall, no?
Exactly. If (when) interest rates climb back up, it will only accelerate the decline of home prices -- people cannot buy what they cannot afford.

This is a lesson that, while seemingly simple on the surface, our citizenry seems to have a difficult time comprehending.

Assuming an equal monthly payment, it's always better to buy a house for a lower price with a higher interest rate instead of buying that house at a higher price with a lower interest rate. Why? If you buy at a lower price, one can always refinance their mortgage at a lower rate in the future. But you can't reduce the amount of principal you owe on the loan.
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Old 02-09-2009, 03:33 PM
 
Location: New Jersey
11,298 posts, read 16,590,633 times
Reputation: 13263
...and when the housing market turns around and it will, just watch how fast prices go back up.
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Old 02-09-2009, 03:54 PM
 
1,552 posts, read 4,622,051 times
Reputation: 509
Quote:
Originally Posted by MPBsr View Post
...and when the housing market turns around and it will, just watch how fast prices go back up.
No way. At best, when the housing market stops collapsing, things will remain flat (in real dollar terms) for years to come.
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