Sale Price vs FMT (for sale, real estate, renting)

[movtova]

Assuming this is still a buyer's market , is a sale price of 15% more than Fair Market total (FMT) a reasonable/acceptable amount? Is the county assessed value (FMT) really a useful indicator to the buyer when negotiating the price of a home?

[novahousehunter]

County tax assessments are not really relevant to sale price. Some areas seem to sell for way over, others way under.

Best to look at recently sold comparable homes (if you have an agent they will have this data, but you can also find a lot on redfin or franklymls if you search for recent sales).

[kutra11]

In a buyer's market, a buyer will hold on to any piece of evidence that will help them get a good deal. I was at the receiving as well as at the giving end in 2008 when I sold my house and bought a new one.

You have to see records of how comparable houses in that neighborhoold are selling. That's the true measure; not necessarily what the county says it is. Having said that, I have seen RE ads that tout "$100K below assesed value", "but it at assessed value", etc.

Good luck,
K

[Margery]

When you receive multiple offers on homes, commonplace now, it is not a buyer's market and has not been a buyer's market for over a year. Demand exceeds supply now, yet buyers are still coming in with low bids because someone told them "always bid low at least 10%, or 20%, etc." Don't base your offer on the tax assessment, base your offer on recent sales and current listings in the area. Remember the three most important items affecting the value of the home: #1 location, #2 location, and #3 location.

[JD984]

Originally Posted by Margery

When you receive multiple offers on homes, commonplace now, it is not a buyer's market and has not been a buyer's market for over a year. Demand exceeds supply now, yet buyers are still coming in with low bids because someone told them "always bid low at least 10%, or 20%, etc." Don't base your offer on the tax assessment, base your offer on recent sales and current listings in the area. Remember the three most important items affecting the value of the home: #1 location, #2 location, and #3 location.

It depends on the location, the price and the price relative to the location. On one hand, lower-priced SFHs in desirable neighborhoods are going under contract quickly, but you'll also find plenty of upper-bracket homes in expensive areas that have been on the markets for a long time, and are not going to move unless and until the sellers bring the prices down. In other words, you can have a buyer's market and a seller's market in the same area for different segments of the market.

But I agree that prospective buyers have to pay more attention to recent sales than the latest tax assessments.

[kutra11]

Originally Posted by Margery

When you receive multiple offers on homes, commonplace now, it is not a buyer's market and has not been a buyer's market for over a year. Demand exceeds supply now, yet buyers are still coming in with low bids because someone told them "always bid low at least 10%, or 20%, etc." Don't base your offer on the tax assessment, base your offer on recent sales and current listings in the area. Remember the three most important items affecting the value of the home: #1 location, #2 location, and #3 location.

Receiving multiple offers on a home does not mean it is not a buyer's market. Even during the 2006-2008 time period, if you would have brought a house on the market for an amount substantially below the fair market value, you would have gotten multiple offers.

If Mercedes starts selling its $60,000 cars at $30,000, there will be a rush of buyers, but that doesn't mean the dealer can declare that the recession is over. It would only be a myth perpetuated by the dealer to get people to buy more and more cars.

There is always a buyer at the right price irrespective of the market conditions because economic realities are different for different people. It is still a buyer's market out there and it will remain a buyer's market out there until the home sale prices begin to appreciate on a consistent basis.

Regards,
K

[JD984]

I don't disagree, but that's not to say that prospective buyers in certain residential RE market segments in NoVa aren't going to be in for a rude awakening if they think that, because it is generally perceived to be a "buyer's market," they can bid 10-15% below the asking price and expect to get their offer accepted. The sellers may have done a good job of assesing current market conditions before they put their house up for sale.

[kutra11]

Originally Posted by JEB77

I don't disagree, but that's not to say that prospective buyers in certain residential RE market segments in NoVa aren't going to be in for a rude awakening if they think that, because it is generally perceived to be a "buyer's market," they can bid 10-15% below the asking price and expect to get their offer accepted. The sellers may have done a good job of assesing current market conditions before they put their house up for sale.

JEB77:

My reply was in response to Margery's post. I will see if I can update it accordingly. I am tired of getting all these newsletters from Realtors who are claiming that the housing slump is over, the only way for the home prices is up, good ol' days are here again, etc... Though, I do agree with her that Location is everything.

But from 1999-2005, things like location, good school district, etc didn't matter when it came to selling a house ...it could have been right on 66 and you would have people trying to outbid one another to buy it. That is indicative of a seller's market; not the current situation. But now, buyers are extremely choosy and particular so I am glad some sanity has returned to this process.

Regards,
K

[Guamanians]

I agree with Kutra. I would not call this a sellers market because the sellers can't sell for the price they want. Many people are renting their homes because the resale market is down. Yes there may be some demand, but the potential buyers aren't going to pay more than they can afford, and thus the market has stabalized. Also, there are not nearly as many investors flipping homes anymore

[Guamanians]

Originally Posted by Margery

When you receive multiple offers on homes, commonplace now, it is not a buyer's market and has not been a buyer's market for over a year. Demand exceeds supply now, yet buyers are still coming in with low bids because someone told them "always bid low at least 10%, or 20%, etc." Don't base your offer on the tax assessment, base your offer on recent sales and current listings in the area. Remember the three most important items affecting the value of the home: #1 location, #2 location, and #3 location.

here is a new article on home prices across the country. It specifically mentions DC as well. In reading it, I get the impression that sellers are more realistic, and better informed now than 2 years ago. I used to joke that it was a buyers market, but the sellers didn't know it.

Real estate listings and lower home sale prices - MSN Money