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It is in the Orcutt area (Santa Maria) - about 30 miles south of SLOB. I have lived here all my life and we rent in this area, but are finally looking to purchase. Do you know much about the area?
This is our first time buying a home. We live on the Central Coast of California. Currently, there is a home that we are considering and the asking price is $374,000. We don't think it is worth that much and want to offer $335,000 plus seller pays closing costs. We would probably go up to $350,000. The seller owes $340,000 on the house.
Question: How likely is it that they might accept an offer for less than they owe? What is considered a "reasonable" offer? The house next door to them sold for $343,000 last month. The house we are looking at has new appliances, but that is about the only difference.
Any advice/input?
Offer what you feel is comfortable to you and go from there. You'd be surprised at the motivation needs today from sellers. There is always counter offer negotiations. Good luck.
We just switched agents today because our other agent did not want to make the offer we wanted because he said there was no way that they were going to accept an offer for less than they owe. Our feeling is that it is up to the seller to make that decision - it is up to our agent to make the offer that we tell him to.
While he may be right, what a foolish thing for him to say. You are correct, it is the seller's decision. It always amuses me how agents decide they know what a seller or buyer will do. They may know what they themselves would do but they have NO clue what someone else will. Good move on your part to get yourself another agent, IMO.
It is in the Orcutt area (Santa Maria) - about 30 miles south of SLOB. I have lived here all my life and we rent in this area, but are finally looking to purchase. Do you know much about the area?
Not really very much. I do know Santa Maria, but not enough to get into a deep discussion about the local real estate market, sorry. You're undoubedly more educated about the area having grown up there.
However, I would be concerned in a general way about one thing. The central valley RE market has been very soft overall. I'm talking all the way from Bakersfield up to Sacramento. There's been developments with people walking away from their houses, auctions on inventory spec homes all over the place, and people buying these homes for fractions of what others paid just a year earlier for the same model.
I'd take a hard look at the trends in your current market before you decide to jump in. Get a good Realtor who's willing to provide you with the sold comps, days on market over the past year (increasing?), and to drive you through some of the neighborhoods.
If you see lots of for sale signs, increased number of houses with yards going to pot, and obviously vacant homes, that will tell you a lot. For example, the yards going to pot tend to mean that the residents are trying to save money by cutting down on watering and gardening services. It's their last ditch attempt to save money so they can meet their increased house payment without joining the forclosure ranks of the other vacant houses and short sale attempts on the market. Usually they're unsuccessful and they end up walking away a little later.
If you see a lot of that stuff in Santa Maria, I'd think twice about giving up my renter status at this time. I know the anticipation can be almost overwhelming with your first purchase. It's really nice to dream about walking in a door that you own. The problem is that you might regret it later if the neighborhood becomes a ghost town through a bunch of foreclosures or half the subdivision goes to auction and your neighbors buy their houses for 60% of what you paid.
Let me say that it's very rare to actually hit the the true bottom of the market, any market. However, IMO and others opinions, we're still far from that bottom so you've got time to get closer to the bottom. You may still catch it on the way down, or a little after the rebound has begun, but you'll still come out ahead over trying to "catch the falling knife" too early in the process. You want to grab along the handle, not the razor sharp knife blade as it falls.
Again, all of what I wrote is based on some of the happenings I've seen written about the central valley real estate market when I left California (Santa Clarita area, about 60 miles or so south of Bakersfield). Maybe it doesn't quite apply to Santa Maria since they have some of the oil jobs and that's been going well, but you're the one with the knowledge about that area.
Otherwise, good luck and get yourself a good Realtor to help you out, not a salesman. You don't need to be sold, you need sage advice by a responsible professional.
The inventory situation: there aren't a lot of homes for sale in the neighborhood that we want, but there are a lot of homes for sale in general. Also, pretty much all of the homes are just sitting on the market because the sellers haven't come to terms with the fact that their homes aren't worth what they were a few years ago.
The house has been on the market since the end of May. They started it at $484,000 (WAY TOO MUCH) and have reduced it to $374,000 (I'm not sure when they reduced it)
We just switched agents today because our other agent did not want to make the offer we wanted because he said there was no way that they were going to accept an offer for less than they owe. Our feeling is that it is up to the seller to make that decision - it is up to our agent to make the offer that we tell him to.
So, we are looking at a couple more properties tomorrow, but will likely want to go ahead and make an offer on the one I was talking about.
When we got prequalified for our mortgage, the agent said that houses are being sold for about 8% to 10% off of the asking price. 10% off would be $336,600 which is pretty close to what we want to offer. We feel that it wouldn't hurt to at least make the offer considering: 1) The house has been on the market since May 2) We are already prequalified for the loan - we just have to find the house 3) We don't have to sell our own home and can complete the sale at any time the seller wants and 4) the house next door sold for about the same price we want to offer just one month ago.
What do you think? Any tips in general on making an offer besides leaving emotion out of it?
Thanks
No 1 your agent was an idiot. He works for you and should have presented you offer. Then the seller could counter if he wanted. Make your offer at the price you feel its worth. If he is serious you will soon know
We just found out that we lost out on that house because an offer was made at about the same time we wanted to make an offer and now they are in the counter-offer stages and have told our agent that unless we pay close to asking price, they already have a deal worked out.
As far as houses on the market. I am not seeing a ton on the market where we want to be. It seems like the ones that are there are sitting on the market for quite a long while. It does seem like there are a lot of short sales relative to the amount of homes for sale. This is frustrating because it seems like each house that pops up that we like is a short sale and I have heard that those can take forever to even hear back from the bank regarding an offer. I really don't want to wait months to hear back after I make an offer.
Our approach right now is just to take our time and look at a lot of properties and just wait until the right one pops up at the right price.
Part of the problem in our area is that people are very slow to realize that they can't get the same price they could have gotten on their home a few years ago and are way overvaluing their property, refusing to budge on the price.
I agree with rmorton. The real estate agent was an idiot. My daughter just bought a house where the sellers had to bring a check to the table i.e. still owed on the mortgage - more than they received from the sale of the house.
Before that, she had an agent who did not respond to her interest in a house and because of it, he lost the sale, she lost the house because the seller since received another offer. Needless to say, she fired him.
Not until there are signatures on the contract they don't. If they are going back and forth then no, there is no 'deal worked out'. For all you know the agent is just saying that so there is nothing to distract the seller. Maybe your financing terms are better...or your closing date better...or you aren't looking for the seller to kick in for closing costs...maybe he'll just like the sound of your name better. What if they don't come to terms and someone else bops in there before you? IMO, it's always best to have your offer presented regardless of what you are told by the listing agent.
how badly do you want the house? Is there something unique about this house that you must have? Offer $335k and see what happens. If the house is quite unique in that area and you can't find any other comprable houses then it may be worth meeting them halfway from their asking price and your initial offer.
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