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How much would you offer on a home that's been on the market for almost 6 months in Cary and has been reduced steadily in $5,000 increments for a total deduction of $25,000 off the original price? The home was originally listed at $225,000 and is now $200,000. Also, the sellers list in their comments "bring all offers." I would love to know your opinions on this..thanks!!
Whatever the home is worth to you. Do you have an agent to help you out? I'd think an agent would be much more helpful to your situation than us dolts here.
I wouldn't go by how much the house has been reduced or how much they are asking. It is possible the house is still overpriced, or not. Look at very recent comps (over the past 2 months.) Is this a place you want for your home? You should be working with a very good buyer's agent but even if you are the economy is very shaky right now and it is hard for anyone to know what is going to happen with housing values. Good Luck.
Houses generally appreciate at 3% annually in a stable market
Find out what the house last sold for before the "Housing Bubble" began in the year 2001 and add 3% annual appreciation.
Here’s the formula that can easily be done on the Google search engine:
Price of house before 2001(1+.03)^years since the house last sold before 2001 as an exponent
For example, a house that sold in the year 1999 for 200,000 would work out how? Let’s plug in the numbers and find out.
200,000(1+.03)^9= 260,954.637
Contrary to what many real-estate agents may tell you this formula is fair to both the seller and the buyer. Please consider that this formula is not absolute as it won’t reflect any improvements made to the home or other such intangibles. This formula only serves to give the potential buyer a starting point for negotiations, nothing more.
The popular consensus is that you should offer within 2-3% of the asking price. Part of the logic is that the seller prices the house based on comparative market value and will hold the line. Another part of the logic is that you risk insulting the seller by making a low-ball offer.
I however disagree completely with the popular consensus.
This is a buyer''s market (good for you either having cash-on-hand or the credit-worthiness to find a loan) which gives you leverage. Even if the comp on the house proves the current asking price it makes little difference. House values are in steady decline across the national charts and we're no different. Obviously they've demonstrated an awareness to this fact by adjusting their price downward. If you think the house is worth roughly the current asking price I'd aim for around $160k and see what happens. No one (and all you Realtors out there take a deep breath before replying) is going to be insulted by a qualified offer in this market. These people aren't your friends, you have no loyalty to them and I don't think you really care if they think you're a nice person or a real-estate pirate.
Besides what's the worst thing that could happen; they're insulted and say "no"? Or they just say "no"? You could always increase the price to $175k and test their resolve.
It's funny how we're never worried about insulting the car salesman and look for reductions across the boards elsewhere in our lives. But when it comes to home buying we tip-toe around the haggling process.
I wonder, what about a house that's already price reduced to $99K? It appears to have had only one owner, I looked up the record. It might be nutty but my rent is so high and it would be cheaper to buy this house I noticed rather than rent one. It's in a nice area too, semi-rural north Durham.
Find out what the house last sold for before the "Housing Bubble" began in the year 2001 and add 3% annual appreciation.
Here’s the formula that can easily be done on the Google search engine:
Price of house before 2001(1+.03)^years since the house last sold before 2001 as an exponent
For example, a house that sold in the year 1999 for 200,000 would work out how? Let’s plug in the numbers and find out.
200,000(1+.03)^9= 260,954.637
Contrary to what many real-estate agents may tell you this formula is fair to both the seller and the buyer. Please consider that this formula is not absolute as it won’t reflect any improvements made to the home or other such intangibles. This formula only serves to give the potential buyer a starting point for negotiations, nothing more.
Good luck!
The value of anything is based on tried and true economic factors. Supply and demand, supply and demand.
This whole concept of what's fair makes no sense in a true free-market economy. Even if the house sold for $200k in 2001 the current market dictates its value not some formula. If the seller can't move the house for $200k (and I realize you picked the number randomly and not because you're suggesting its worth) and the market is only willing to pay $175k for the house that's a fair price in the current market.
An offer should be based on what the seller is willing to pay, not what a Realtor or market analyst decides.
And as far as Realtors are concerned, even the very best (and I've known some excellent Realtors) are still driven to make a deal. When they think they've found a reasonable match they'll do what they have to in order to facilitate a deal and earn the commission.
I wonder, what about a house that's already price reduced to $99K? It appears to have had only one owner, I looked up the record. It might be nutty but my rent is so high and it would be cheaper to buy this house I noticed rather than rent one. It's in a nice area too, semi-rural north Durham.
It's nice in theory, but just remember, the water heater is going to go out in a few months, come summer the air conditioner will crap out, first good rain and you notice several leaks, toilets overflow, etc. Not saying this will happen, but you need to factor in the cost of these things, as well as property taxes and insurance. All together, the costs may work out to be the same as renting.
I love owning a home, but often it would be nice for my problems to be someone else's. Not trying to talk you out of it, but just something to consider.
You don't state whether you even like the house or not, or relevant factors regarding the home and surrounding neighborhoods. I think liking the house is a material factor in considering making an offer. Are there factors outside price that make this home more personally desirable to you?
If you don't want the house, offer nothing.
If you want the house, consider making an offer based on the value you see more than on price action.
Your level of disregard for seller emotion and psychology should be inversely proportional to your level of desire to buy the particular home.
Last edited by MikeJaquish; 11-21-2008 at 06:09 AM..
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Houses generally appreciate at 3% annually in a stable market
Call Washington, quick!
