List price compared to purchase price (real estate, countertops, appliances)

[saganista]

Originally Posted by CaliTerp07

Or it was spot on. If my house had been listed at $10k more, we wouldn't have even looked at it...

Perhaps not. But the question from the seller's standpoint is whether it would have sold and at what price, not whether you in particular would have bought it.

Originally Posted by CaliTerp07

If it's too low, people bid above asking price, knowing it's too low.

In light of the above, would you have bid your current house up to $10K above what you paid for it? I'm thinking not. I'm also thinking that anytime buyers end up in control of the final price, the seller has taken a hit. It is to his advantage to segment the market until he finds the one buyer in all the world who is willing to pay the most for his property. Literally doing that can be rather time consuming. Tending toward it will help you as a seller realize the maximum profit from the final transaction.

[FCNova]

I think some sellers will figure out what their target price is and price a little higher, giving them some room to come down and still get their price or maybe they get lucky and get more. It can also backfire if you get no offers and it sits. I know real estate agents usually push for aggressive pricing so you can get an offer as quickly as possible, but is that in the best interest of the seller or RE agent who'd like to close quickly and move on to the next transaction?

[CaliTerp07]

Originally Posted by saganista

Perhaps not. But the question from the seller's standpoint is whether it would have sold and at what price, not whether you in particular would have bought it.

In light of the above, would you have bid your current house up to $10K above what you paid for it? I'm thinking not.

No, because we couldn't afford to. But if you get several offers, the standard protocol is to send out a request for best and final from all interested parties, to see what better offers come in. That's when you can segment out that market. If you had 5 full price offers come in, and not one is willing to pay above list, you probably are right around where you should be--else the person who really wants the house and thinks it's worth more will pay it.

[NC211]

I can't speak for more than the area I'm in personally, which is Brambleton/Broadlands. We purchased new construction at list price in November of last year. First of only two phases in the neighborhood. Since then, phase two has been released to the market, and prices have honestly jumped nearly 10%. This isn't an "asking price" jump, but actual sales that have occured over the past month for lots, that are smaller than ours and void of mountain views like ours, and housing models that aren't any different than what has been delivered in phase one already.

7 months ago, the magic number out in my neck of the woods (Loudoun) was $600,000. Lots over that amount, had a 63 month supply (now down to 51 months). Lots under that amount, 2 months supply. The magic number is moving up towards $625,000 now, with $640,000 well insight. However, considering 5 years ago you could barely get into that region for under $950,000 to $1,000,000, its not so much of a "bubble" forming, as it is a return to value. Granted, houses now are about 1,000 sf smaller (4,000) than what was being delivered in the go-go days, but....

[saganista]

Originally Posted by CaliTerp07

But if you get several offers, the standard protocol is to send out a request for best and final from all interested parties, to see what better offers come in. That's when you can segment out that market. If you had 5 full price offers come in, and not one is willing to pay above list, you probably are right around where you should be--else the person who really wants the house and thinks it's worth more will pay it.

What you are suggesting is that the bees buzz about and settle within a few hairs of a price point that from the seller's perspective was inherently too low to begin with.

What I'm suggesting is that the profit-seeking seller never wishes to see a price point that draws several roughly equivalent offers at all. He wants to see only the one offer that comes from the single most motivated buyer of all.

[gammann]

Originally Posted by CaliTerp07

Or it was spot on. If my house had been listed at $10k more, we wouldn't have even looked at it (it wouldn't have even shown up in my searches). If it's too low, people bid above asking price, knowing it's too low.

Eh, I would say people would only bid it up if they are forced to. Why would you offer more than list, unless you thought you had competition?

As far as your search was concerned, I was always looking above my range, to see the next set of houses that might drop into my range. What if someone priced a house too high, but it's real worth was in your range, you would not even know it was on the market. Or what if a house was $10k more than your range, but had been at that price for 60 days....think they might take an offer for $10k less than list....maybe, maybe not, could be worth a shot though.

[oneasterisk]

This is a good place to start looking: Real Estate Market Statistics for the Mid-Atlantic Region | RBI

[Oldhag1]

Originally Posted by oneasterisk

This is a good place to start looking: Real Estate Market Statistics for the Mid-Atlantic Region | RBI

Thanks

[Hesky]

Honestly, it depends 100% on what the real value is based on the comps. There is no golden rule for an initial offer. If the house is priced fairly based on the comps and there are other offers, expect to pay 100% of the list price.

That's what happened when I bought my house earlier this year. I had to compete with two other bids. I tried to offer more than 100%, but the seller wasn't interested, instead I payed the closing costs and 100% of the original listing price. The reason they didn't want more, is because they were worried appraisals are very tight these days. And indeed, my bank's appraisal ended up being exactly the listing price. The house was in the market no more than 1 week.

So in other words, because there aren't that many listings, if a house is priced fairly, there will be demand, and you will likely have to move fast, offer 100% of the list price, and possibly even pay closing costs.

[5150traveler]

I think it's a tight market, definately low inventory, but not where you don't expect a little negotiating room on both sides.
Just last week we offered about 5% below asking - we really wanted it, but felt our offer was in step with the comps. They countered just a little higher from our offer and we accepted. Most of what we looked at I felt was priced just a bit above what recent sales would justify. If I recall, most closings in the area went a little bit under asking too.
Really, all a "deal" is, is a situation in which both sides think they made out well.

The real bargan is the current mortgage rates - buy now and boast to your kids later.