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As my other threads in this forum indicate, we've been waiting on a short sale. We love this home but, as we all know, short sales are a gamble. My buyers agent got a call this weekend from a listing agent about a home we viewed in early Jan. The asking price is the same as the short sale (250k) but it's a resale, so less bologna to deal with. It's a fine home but it just didn't grab us. We might be able to make the same offer on this home (200k) since the sellers want to be done with it. They are receptive to such a low offer because they just aren't getting any interest. The bank, OTOH, could just tell us and our low offer to take a hike.
So, should we wait and see what the bank has to say with our offer on the short sale, or do we recind that offer (good faith deposit hasn't been cashed) and get into a fine home that we don't like as much? My buyers agent thinks I'm rushing it all too much, but frankly, I don't see homes within 20 miles of boston that are move-in-ready generally dipping to this price range. Of course, spring is coming. There will be a lot more homes for sale (and more buyers).
To some extent I would say it depends on why you don't like the first home as much. Is it because of features that will also affect resale value when it's your turn to sell?
Often these can be intangibles, such as a less open feel, lower ceilings, less light, master bedroom that's just a bit too small, less usable floor plan, less privacy in the yard, that kind of thing. It's easy to convince yourself you're being too picky, but ultimately things like that directly affect the value of a home, and how easy it is to re-sell it. Sounds like your agent thinks you should hold out, which definitely means something.
Of course on the other hand you risk losing the other home on the short sale. I'd try to really analyze what kind of investment the resale would be, objectively, without feeling like you're rushed into something. Just because a home drops in price doesn't always mean it's a great value, even though it could be.
Can the 1st home be changed to accomodate your wants and needs for a reasonable amount of $$$? Things like lighting, paint, flooring, etc....can change the whole look of a house.
Lot size, room size, closet space, location and commute time are things that you can't really change. You CAN knock out walls or add on to a house to expand rooms but at considerable expense.
Think about what is more important to you. If the short sale has more of what you want, hold out. Even if you don't get the house, more will be on the market soon. Be patient.
To some extent I would say it depends on why you don't like the first home as much. Is it because of features that will also affect resale value when it's your turn to sell?
The home has a grandma feel to it. The neighborhood is fine but it's a lower-middle class type feel (small homes though well kept). It does have a cool forest vibe though. I feel like I'm camping when at that house, so I like that. Either way, the town itself is known for being more affordable. Will that affect resale in the furture? Probably not for first-time home buyers like myself.
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Often these can be intangibles, such as a less open feel, lower ceilings, less light, master bedroom that's just a bit too small, less usable floor plan, less privacy in the yard, that kind of thing.
You hit the nail on the head. Those are the exact issues I'm contending with.
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It's easy to convince yourself you're being too picky, but ultimately things like that directly affect the value of a home, and how easy it is to re-sell it. Sounds like your agent thinks you should hold out, which definitely means something.
I have a kind and patient agent. The one thing about my 'dream home' is that it's on a busy street. That right there is a problem for future re-sale, and of course pollution. It's not too busy of street, but it has 35 mph speed limit. The lay out is awesome though. The people there currently have it looking like a mess but it could really be made into something spectacular. Plus, it has 0.6 acres and is 20 miles west of Boston, so that's pretty good.
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Of course on the other hand you risk losing the other home on the short sale. I'd try to really analyze what kind of investment the resale would be, objectively, without feeling like you're rushed into something. Just because a home drops in price doesn't always mean it's a great value, even though it could be.
I should take a step back this week at the very least, and see if the bank says anything. My biggest concern is being able to get into a home on one income. With the way the economy has been going, my dh and I have decided not to buy a home that would require two incomes. So, that puts us at a disadvantage in the amount of house we can get, but if the crap hits the fan, and we lose our jobs, we want to be sure we can pay our bills if we have to go wait tables or something.
Can the 1st home be changed to accomodate your wants and needs for a reasonable amount of $$$? Things like lighting, paint, flooring, etc....can change the whole look of a house.
Lot size, room size, closet space, location and commute time are things that you can't really change. You CAN knock out walls or add on to a house to expand rooms but at considerable expense.
Think about what is more important to you. If the short sale has more of what you want, hold out. Even if you don't get the house, more will be on the market soon. Be patient.
Thank you. Yes, I need to repeat that to myself 'be patient'. At the very least, the second home is in a very quiet neighborhood. It's like a remote village lol, so I wouldn't have to deal with the pollution concern like I would with the first home, though I may be going over the top a bit with that. I've been reading up on children raised near highways (the home isn't near a highway, but still, there are plenty of cars zipping by) and it can affect lung development, increase risk for asma, cause low birth weight and premature delivery for pregnant moms, etc. It's just such a beautiful home with a huge back yard.
There are so many things to take into account when buying a home. It's mind numbing.
As my other threads in this forum indicate, we've been waiting on a short sale. We love this home but, as we all know, short sales are a gamble. My buyers agent got a call this weekend from a listing agent about a home we viewed in early Jan. The asking price is the same as the short sale (250k) but it's a resale, so less bologna to deal with. It's a fine home but it just didn't grab us. We might be able to make the same offer on this home (200k) since the sellers want to be done with it. They are receptive to such a low offer because they just aren't getting any interest. The bank, OTOH, could just tell us and our low offer to take a hike.
So, should we wait and see what the bank has to say with our offer on the short sale, or do we recind that offer (good faith deposit hasn't been cashed) and get into a fine home that we don't like as much? My buyers agent thinks I'm rushing it all too much, but frankly, I don't see homes within 20 miles of boston that are move-in-ready generally dipping to this price range. Of course, spring is coming. There will be a lot more homes for sale (and more buyers).
I might have missed part of the rest of this story but my opinion, based on post above, is the question of why you think the "resale home" should be lowballed at 25% off the asking? Is the short sale coming down this much? Given that these homes are probably both priced aggressively as well as well below what they could have sold for in the "complaint driven, everything is priced too high" market, this sounds like another case of trying to get a home for next to nothing, as if they are still priced at peak and trying to make a killing, situation. If wrong, my sincere apologies. But what are you basing your offer on (25% less of asking)? This would help everyone in their advise. Also, the short sale price on one home is usually ALWAYS much less than the comparative resale market home. It sounds like you area trying to price this neighborhood at "short sale" prices. They are very different. My guess would be as much as this owner wants to "be done with it", as you put it, they priced it where they did because of that, so they were competitive to the short sale, not expecting to get another lowball offer to do so.
I might have missed part of the rest of this story but my opinion, based on post above, is the question of why you think the "resale home" should be lowballed at 25% off the asking? Is the short sale coming down this much?
I offered 200K on the short sale as well. I don't know if the bank will take the offer. The home has been on the market for over a year. They might just want to get rid of it, or maybe not.
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Given that these homes are probably both priced aggressively as well as well below what they could have sold for in the "complaint driven, everything is priced too high" market, this sounds like another case of trying to get a home for next to nothing, as if they are still priced at peak and trying to make a killing, situation. If wrong, my sincere apologies. But what are you basing your offer on (25% less of asking)?
I did telling my agent to convey to the sellers that I certainly don't want to offend them. This home, while nice, is not my first pick. Since the sellers contacted my agent, than it doesn't look like it's anyone's first pick right now. I'm willing to go up to 240-250 ish...for the right home. For the not-so-right home, it would have to be a very good deal for me. So, they can sell it to me for what I'm willing to pay, or not. Perhaps they'll get some action this coming spring.
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This would help everyone in their advise. Also, the short sale price on one home is usually ALWAYS much less than the comparative resale market home. It sounds like you area trying to price this neighborhood at "short sale" prices. They are very different. My guess would be as much as this owner wants to "be done with it", as you put it, they priced it where they did because of that, so they were competitive to the short sale, not expecting to get another lowball offer to do so.
The two homes are in very different neighborhoods, so they're not really comparable as far as pricing goes. Both will require work, though the first one will require way more. The note owed on the first is around 300. The family purchased it for 165K back in the late 90's. It has a leaky basement, the carpets need to be cleaned or removed, the ceilings need to be replaced, etc. I would put in another 50k to get this home up and running to my liking. I have been low-balling, without a doubt, but I have a bottom line. And this bottom line consists of what I have to offer, which is 250k. I'd buy a home that didn't need any work for 250 (I put an offer in at asking price a month ago but didn't get it) in a heart beat (providing the neighborhood is good for my family). But, I'm not going to put a bid in for 250 when I would need to invest another 50k and get stuck.
Again, keep in mind that the sellers of the second home are contacting me. I didn't make an offer, verbal or formal, because it is move in ready even though I would want make changes; it doesn't have a garage, an attic or full basement for storage. I would want to have something for storage, and this is going to cost $$$. I didn't want to insult them, so I didn't bother.
To add, as my buyers agent says "a home is worth as much as a buyer is willing to pay".
Yes but...
a smart agent/seller in short sale accepts any offer to get it to the bank no matter how low it is. Most resales I know aren't going to take an offer that is 75% of asking price. If they do, it was probably overpriced by that much. What is fair market value? Apples to oranges comparing short sales to resales.
a smart agent/seller in short sale accepts any offer to get it to the bank no matter how low it is. Most resales I know aren't going to take an offer that is 75% of asking price. If they do, it was probably overpriced by that much.
They originally had it up for over 300, than to 297, than 269, than 249,900. The note owed is around/over 300. That's probably why they had it up so high. Maybe they'll (the bank) invest some more money in the place to clean and spruce it up. I don't know why it's been on the market this long since it's a cute home though again, it does need work, which is only cosmetic as far as I can tell. The people that live their (previous owners) are supposed to be moving out, so that might help, since they keep the place a mess. I don't understand why messy homes deter buyers.
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What is fair market value? Apples to oranges comparing short sales to resales.
They really are two different birds.
Any way, I've decided to put an offer on the second home. The listing agent corresponded with my agent today. I had her tell the agent what the offer would be and to see if the sellers would be willing to consider it before we go through the bother of paper work. Plus, I really don't want to offend them or anyone. The agent said to bring the offer. They were going to reduce the listing price to 230k for the spring, so my offer won't be out in left field really. We'll see how it goes. I don't know if I should or will accept a counter. I'm thinking of going up to 210 if they want.
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