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Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,547,021 times
Reputation: 677
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Quote:
Originally Posted by lukeb321
In S Florida (Miami/Broward/Palm Beach) - try 10-15% below. There is just way too much inventory. If they don't like it, move on. Some of my colleagues have paid 20-25% less than asking. Of course, some people down here refuse to believe their house has gone down in value over the last few years and have over priced their houses 20-25% to start.
There really isn't a "correct market" down here. One block with cookie cutter identical homes will have 4 homes for sale.
1st - 325k
2nd - 280k
3rd - Foreclosure - 250k
4th - Short sale - 220k
With comps ranging from 220 - 400k over the last 12 months.
How can anybody really know whats the value of that house?
The appraiser won't use that short sale and foreclosure as comps unless more than 25% of sales in the neighborhood are distressed sales. As a buyer, if you want the short sell or foreclosure price, you would purchase the short sell or the foreclosed home. A non distressed seller usually won't meet those prices, unless they're very, very, very desperate...
There is nothing "distressed" about any of the short sales or foreclosures I am seeing in my area. I think not using short sales and forecloures as comps in this housing market is a way to manipulate prices and keep prices higher in the neighborhood. This is the worst housing market EVER. And getting worse. With foreclosures and short sales going up by the second, many areas will have them at higher than 25% by the end of the year. How can we not use them as comps? Every other listing I get is a short sale or foreclosure! Many times the short sales and foreclosures I have seen are in BETTER shape than the "regular" listings!
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,547,021 times
Reputation: 677
Quote:
Originally Posted by saltzman143
There is nothing "distressed" about any of the short sales or foreclosures I am seeing in my area. I think not using short sales and forecloures as comps in this housing market is a way to manipulate prices and keep prices higher in the neighborhood. This is the worst housing market EVER. And getting worse. With foreclosures and short sales going up by the second, many areas will have them at higher than 25% by the end of the year. How can we not use them as comps? Every other listing I get is a short sale or foreclosure! Many times the short sales and foreclosures I have seen are in BETTER shape than the "regular" listings!
Quote:
What Does Distressed Sale Mean?
An urgent sale of assets because of negative conditions.
Because a distressed sale happens under unfavorable conditions, the seller generally receives a lower price.
If the majority of listings you get in an area are distressed properties, then yes, you can use them as comps. If less than 25% are not, then they're not accurate comps. Not to an appraiser and not to a bank. And probably not to a seller, either.
I'm in a vacation-home market with tons of short sales and foreclosures. I got a cash offer of 94% of asking....wasn't a drastic lowball, but a friend in real estate thought I should counter and maybe be able to get a few more thousand. In addition, the buyer psychologically wouldn't feel they got a "deal" if I accepted the first offer....they might even pull out, and later offer less. Well, guess what -- after my counter, the buyer walked, and offered on their second choice a few blocks away. <Sigh....that's what I get for not following my gut instinct...>
There's talk of a new offer coming in from a different buyer -- at 88% of asking....barely enough to pay off the mortgage...
This market sucks.
P.S. I don't think the old stereotype about foreclosures being dumps holds true anymore. In my area, some are only a few years old and are still in great shape....unfortunately, as they're my competition.
Last edited by Avalon08; 03-16-2009 at 09:31 PM..
Reason: Added a P.S.
My market, must be so different, as 1% to 2% would be great, if all buyers thought that way. The last several buyers, seem to all think, that everything and all sellers , are desperate, and I am seeing many with thinking, 10% to more, is not unrealistic. With all the short sells, and so many on the market, I wished we could turn for only 1 to 2% off.
In other words, how often do buyrs pay the asking price? We are getting ready to list our home and my DH thinks the price the realtor suggested is too high. I have a low number that I dont want to go below of course. So i am just wondering if buyers automatically assume they can take 1% off the ask price and still be in the ball park.
In the charlotte area, sellers are getting roughly 88-90% of asking price when you include concessions...(however that doesn't include price reductions...)
Example:
Seller lists home for $300K, no offers after 2 months. They reduce price to $270K. They receive an offer and accept at $255K.
A realtor and the MLS will post that the seller received "94.5%" of asking....
However, we know that is not the truth. The seller actually received "85% of asking".....(255/300K). Also, closing costs and other bonuses are not included which make published information even more misleading....realtors and people directly tied to this do not like to make these dirty little secrets known, even though its well known in their industry.
Point being, don't always believe "97-99%" because most likely they only tell a fraction of the story....
I've never offered nor paid asking price here in NY.
In selling, I check the comps and ask for a little over what I really (not some ridiculous laughable price) because I don't expect anybody to offer asking price. Nobody ever has.
Don't expect any full asking price offers. I've only seen one listing that I would have even considered offering full price and it was gone within 24 hours of hitting the MLS.
That said, I know my market and if the right house was listed at a price I consider a really good deal I would offer full price knowing that others will recognize this as well. Those of us buying have had the luxury of studying this market and know which areas command a premium and which ones are just overpriced.
If you want to move it, price it well. If you think the amount your agent wants to list it at is too high go with your gut. I am not saying to give it away, but base your price realistically. If you list it too high right off the bat, I won't even bother looking.
Right now, many, or most, buyers are determining that unseen homes in unseen neighborhoods are overpriced.
Kind of a knee jerk situation.
It seems that most people are shopping deals for bragging rights rather than buying a home. Mistaking discount for value is common.
The tough part on pricing is to price low enough to get an offer and have room to negotiate to a desired net proceeds check, and not to price so high that buyers are deterred from viewing.
It seems that most people are shopping deals for bragging rights rather than buying a home.
Yes, see my post above -- this is why I countered my buyer's first offer. If I just accepted it, he'd always feel he could've gotten it cheaper. It would've ruined the "thrill" for him. Or so I thought. I didn't realize buyers are just moving on to the next property, or maybe even putting offers in on multiple properties to see who bites on their lowball offers.
Quote:
The tough part on pricing is to price low enough to get an offer and have room to negotiate to a desired net proceeds check, and not to price so high that buyers are deterred from viewing.
Right. I've dropped my price twice ($30K). If I drop it again, there will be very little room to negotiate. Back in the day, this would've been acceptable because sale prices usually were within a few thou of asking. Not now. If I drop another $10K, buyers will still expect $40K off asking. They don't look at it as "it's already priced realistically". They all want a "deal", or should I say, "steal"....because they assume all sellers are desperate.
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