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5% of my home is 20 grand. When I go to sell my house I'm going to list it for what I believe its worth and not take a dollar less. Even with my ridiculously high Austin property taxes 20 grand will cover my mortgage insurance and taxes for about a year and a half. Luckily with the location of my home it should go fast. Perhaps this is why the owner is holding out for 100%
5% of my home is 20 grand. When I go to sell my house I'm going to list it for what I believe its worth and not take a dollar less. Even with my ridiculously high Austin property taxes 20 grand will cover my mortgage insurance and taxes for about a year and a half. Luckily with the location of my home it should go fast. Perhaps this is why the owner is holding out for 100%
What you think its worth is inconsequential to what the market says its worth. We all want to buy low and sell high
I never said I was going to pick a number out of thin air. What I believe it is worth is 400k but I got to that number by comps in the area. And if its a buyer that has a large cash down payment then its up to them not necessarily comps. If someone likes a the house and that trumps paying a premium that's all it takes. Real estate isn't as cut and dry as comps, comps are used to get a base but many things can differ from one home to another down the street. If you are in a financial position then buying low and selling high is a very viable option.
Another example, I was leasing a building from a lady who came to me one day asking if I wanted the first shot at buying it before it hit the market. The comps in the area told me I should pay around $700,000 for it so that what I offered. She told me that was a fair offer but she had owned the building many years and her price was $1,000,000 non negotiable. At $1,000,000 it didn't make sense for my use of the building so I past on it, (no hard feelings I would have done the same in her shoes) it took almost two years but she got a million dollars for it even though comps are still not saying its worth a million but to the new owner it obviously is and they are in the financial position to pay that price just like she was to hold out for that price. Real estate is not so cut and dry.
Another example, I was leasing a building from a lady who came to me one day asking if I wanted the first shot at buying it before it hit the market. The comps in the area told me I should pay around $700,000 for it so that what I offered. She told me that was a fair offer but she had owned the building many years and her price was $1,000,000 non negotiable. At $1,000,000 it didn't make sense for my use of the building so I past on it, (no hard feelings I would have done the same in her shoes) it took almost two years but she got a million dollars for it even though comps are still not saying its worth a million but to the new owner it obviously is and they are in the financial position to pay that price just like she was to hold out for that price. Real estate is not so cut and dry.
This is a good example which people should take to heart. A lot of people post on CD that a property is only worth what "the market" will pay, as if there's some magical entity out there procuring real estate. People pay more--or less--than theoretical market value all of the time. It is only through a number of sales that a theoretical "market value" can even be estimated.
Each piece of real estate is unique in some way. And, generally, the more unique a property, the more variation there can be in a sales price since more factors come into play. Plus, a determining factor in price is not just the characteristics of a property, but also the motivations of both buyer and seller.
It's cliche', but it's very true that it only takes one person to come along and buy a property at a given price. Of course, no one wants to knowingly pay more than a property is perceived to be worth...and no one wants to knowingly sell for less than a property is perceived to be worth, so these competing forces (at least the ones that result in sales) help form the basis of the concept of "market value". But just as an appraisal is not "the" value of a property (it is only an opinion of value--and an estimate, at that), "market value" is not a precise figure at which a property will necessarily sell. It's an approximate figure based upon the knowledge of a number of similar sales.
I always try to get "deals" on real estate--for myself and my clients. In order to get deals, however, there needs to be a number of people who are paying "more" than perceived market value. Otherwise, it wouldn't really be considered as much of a deal now would it?
Yep, real estate is not so cut and dry--especially when it comes to valuations. It's worth what someone is willing to pay.
This is a good example which people should take to heart. A lot of people post on CD that a property is only worth what "the market" will pay, as if there's some magical entity out there procuring real estate. People pay more--or less--than theoretical market value all of the time. It is only through a number of sales that a theoretical "market value" can even be estimated.
Each piece of real estate is unique in some way. And, generally, the more unique a property, the more variation there can be in a sales price since more factors come into play. Plus, a determining factor in price is not just the characteristics of a property, but also the motivations of both buyer and seller.
It's cliche', but it's very true that it only takes one person to come along and buy a property at a given price. Of course, no one wants to knowingly pay more than a property is perceived to be worth...and no one wants to knowingly sell for less than a property is perceived to be worth, so these competing forces (at least the ones that result in sales) help form the basis of the concept of "market value". But just as an appraisal is not "the" value of a property (it is only an opinion of value--and an estimate, at that), "market value" is not a precise figure at which a property will necessarily sell. It's an approximate figure based upon the knowledge of a number of similar sales.
I always try to get "deals" on real estate--for myself and my clients. In order to get deals, however, there needs to be a number of people who are paying "more" than perceived market value. Otherwise, it wouldn't really be considered as much of a deal now would it?
Yep, real estate is not so cut and dry--especially when it comes to valuations. It's worth what someone is willing to pay.
Yes a property is worth what someone is willing to pay. Problem is that a lot of people base their offer on the existing homes sales. Why? Because not everyone has the money to come up with the extra cash between the asking price, offer price and what the bank loans based on the appraisal. Sure thre may be Joe big bucks who wants the house bad enough and willing to pay premium price. And there is the seller who just has to get x price and has the financial horsepower to wait for the big fish. But I bet most don't have the option to wait it out so they make a deal.
Look at the example of the lady wanting 1 mil for her place. Waited two years to get it . Some can wait there can't.
Yes a property is worth what someone is willing to pay. Problem is that a lot of people base their offer on the existing homes sales. Why? Because not everyone has the money to come up with the extra cash between the asking price, offer price and what the bank loans based on the appraisal. Sure thre may be Joe big bucks who wants the house bad enough and willing to pay premium price. And there is the seller who just has to get x price and has the financial horsepower to wait for the big fish. But I bet most don't have the option to wait it out so they make a deal.
Look at the example of the lady wanting 1 mil for her place. Waited two years to get it . Some can wait there can't.
Quite true. There are definitely contraints on people's willingness and ability to agree to a sales price. And time is one of the biggest constraints...because time is money, even in the literal sense.
An underlying point, however, is that no one on this forum can discern whether a list price is pretty much near market value, or whether 95% or 80% is closer to the case. Rarely, if ever, are enough facts presented to be able to make such a determination. People are always commenting that they thought 90% or so of list price was a fair offer, but there's no way that anyone can really provide confirmation, pro or con.
Just last night, I had a client execute a purchase agreement at 100% of list price. But the "list price" had been dropped five times over the last few months--for a total 40% price reduction. A "list price" is not some sanctified number that necessarily has any relation to value. It's just a starting point for negotiations. People need to dig much deeper than "list price" to determine what to offer.
In the case of my client, however, I feel that they got a very good deal. Luckily, the selling broker was not from the area and I simply don't think he did a very good job marketing the property. As a Buyer's Broker, I especially like to work with agents who are unfamiliar with the territory. If I had been the Seller's Agent, I'm sure I could have drummed up a buyer at a better price...but I only work for my buyers, so they're the ones who usually get the better end of the deal. I wouldn't have it any other way.
Posts like this one from Travelassie are heartwarming. I truly think in both ends of the spectrum is no one's business what the original purchase price is. Just worry what's the market value is when you go to buy a home and if the asking price is worth it to you go for it. If it isn't, next!
Thanks, just thought I'd throw a mention into the fray of our recent positive experience with the sale of our house. It'll be a year at the end of January that we sold the house, and we are still amazed that things happened the way they did.
The funny thing was that we didn't stage the house, or even clear out all of the 26+ years of accumulated "stuff" prior to the house going on the market. It was a large house ( approx 3000 sq feet) with a separate "in-law" apartment we had had built for my mother, who lived there for a year before she decided to head out for greener pastures. We still had old carpeting that cleaning only did so much for, we didn't replace anything in the kitchen except a refrigerator and a faucet (not countertops or cabinets), and we'd told our realtor we would offer a $3000 flooring allowance which could go towards replacing that carpeting and some very strange floor covering in the apartment. Fortunately the junk was limited to a couple rooms, ( including 1/2 the living room- our house pictures included the clean half of the living room), and I guess there were enough rooms that were cleared out ( NOT staged) that buyers got a good idea of what the house was like. And as it turned out, the offers came so fast, we didn't even end up offering that floor allowance.
It was an old house, built in 1958, rebuilt completely after Hurricane Andrew virtually destroyed it in 1992. So it was outdated if you consider HGTV standards, but we spent a lot of time painting, replacing appliances and fixtures, resurfacing the driveway and making sure everything worked well, and the place looked well.....just so inviting- the consensus of both our realtor and the buyer's realtor, and the folks who bought the house. It had also been well maintained over the years, with a one-year old roof and had a large yard on a corner. The other plus is that the house was in a very desirable neighborhood in a good school district, and traditionally houses in that area always tended to sell quickly, so that was in our favor too. We sold the house "as is", with the right to inspect. And ended up doing some minor work (including a minor septic tank repair) in response to the inspection report and bank appraiser's report.
I also have to say our realtor, who lives across the street from our house and had been our neighbor for years, was fantastic, worked so very hard, was available to us anytime we contacted her, was a fantastic go-between for us and the buyer's realtor, appraisers, the real estate attorney, and anyone else involved in this sale.. I believe she was largely responsible for the excellent outcome of this sale.
We were so happy with her that we ended up giving her a bonus over and above the commission ( after all, she had to share that commission with their real estate agency and the buyer's realtor). Just to let her know how much we appreciated all she did.
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