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tambre & bcfarmlady: Since you didn't post every detail I could be off for what I am about to say but figure I will say it anyway.
WHAT you owe or WHAT your bottom line is for selling means ZERO to a buyer. I hope you do realize that. You need to be listed at a number close to recent sold houses in your area. If you are $10k under your bottom line you may still be overpriced dramatically. (not saying you are just saying you could be) When a buyer in the markets likes your house they are going to compare it to what sold and figure out the best way to justify why your house is worth even less. Then offer less than that. So if you are not at least CLOSE to those other homes then you have very little shot to sell. And if you are listed out of line with sold properties than odds are you will not be getting any offers or if you do they will be so low you will probably find them insulting and not counter. Which helps no one. Good luck though, tough market to sell in no doubt.
We have been on the market since mid september. We started at $205,000 to test the waters and are now down to $172,000. We will not be lowering anymore. We are getting an adequate amount of showings (3 today), so its a matter of finding the right person for our house.
Last year we sold our PA home for 125k less than the realtor said comparables were selling for...We had been taxed on 2 properties for a few years and only living in one. At 9k a year on RE taxes in PA and 7k in Florida, we had enough and sold our PA home. We are now very, very happy and we do not look back and what it may have sold for if we waited more.. Well our PA neighbor still has his investment home on the market located 5 homes down on the same road and it has been 4 years now. He refuses to lower the price of what he thinks his investment is worth. It has been vacant for 4 full years so it is obviously priced too high at 420k. He also has a home outside of Orlando and often goes there. His realtor frined and I tried to tell him to sell it at the best price he could get but he is stubborn. He is loosing money. RE, School, etc., trash pickup is manditory along with water and sewage. $8,500 every year goes down the drain in the 4 years it has been either unoccupied or not sold.
Now we are living in our Florida paradise. We've noticed prices rise and fall here almost like the temperature. We had our home built 3.5 years ago when the market was supposedly lower. We paid 425k for our home. Our FL home in 2007 was valued at 550k. It is now worth 150k less and we are on the water. ...We are not moving and frankly do not think about how much our home dropped in price. We are more happy now than we have ever been.
We just think it is a crying shame for those that had the rug pulled out from them... We just hope and pray that those people will survive in one piece and get back to a lifestyle they once knew and enjoyed.
Location: Halfway between Number 4 Privet Drive and Forks, WA
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My observation (and I could be wrong) is that sellers who won't/can't go any lower, won't. That means they'll pull their listings eventually if they have to and wait the market out, stay put, or if they have to move, may possibly rent their home out. Not everyone out there selling is in distress. Most of the distress sales are the foreclosures due to subprime. Then you have the folks who *must* sell competing with them. (relos, divorce, etc)...
With that being said,
I will disagree NastasNJ (to a certain extent) when you say:
Quote:
WHAT you owe or WHAT your bottom line is for selling means ZERO to a buyer. I hope you do realize that.
I understand what you are trying to say, but, in a certain way, it does mean something to buyers. Hypothetically, if sellers can't get at least what they owe, they will either withdraw their home from the market, rent it out, stay put, or foreclose. What unsuccessful sellers decide to do with their homes has a huge impact on the market, one way or another, in terms of inventory and pricing. So while it may not directly affect you as a buyer, it will directly affect you as a buyer.
(Also, another note: you can't use foreclosed (distress sale) comps in determining market value for a particular house unless at least 25% of homes in the neighborhood are distress sales.)
(Also, another note: you can't use foreclosed (distress sale) comps in determining market value for a particular house unless at least 25% of homes in the neighborhood are distress sales.)
So I guess Obama's study team needs to read Real Estate 101.
"Foreclosures hurt nearby properties by up to 9%"
While it's true even one foreclosure can be a blight on any subdivision/neighborhood, they're still not typically used as true comps for determing value. Not unless there's a certain percentage of foreclosures in the neighborhood.
I think it is a mis-representation to categorize the drop in prices as being attributable to foreclosures. What is causing the drop in prices is an imbalance of supply and demand. The demand is less than supply because there have been changes in mortgage standards that results in less people qualifying. Foreclosures are the symptom that the mortgage standards used in the last 5 years were faulty. You can tell from this post and many others that private owners are slow to adjust their price to the market. That doesn't happen with banks selling foreclosures, so foreclosures are correcting to the market level much faster.
If there is never another foreclosure, prices will continue to drop until they hit their historic norms relative to income because you now need good credit and real cash to buy a house - thus, limiting the supply. I read an article the other day that wages were flat from 2000 to 2006 - if wages were flat, housing prices should have been as well. So correcting to 2000 prices is not unrealistic and perhaps expected.
I laugh when I see people arguing over whether or not foreclosures should be included with comps to do appraisals. It is an academic argument - no one ever lived through a market like this or anticipated one when they were writing standards on pulling comps. The reality is that you are kidding yourself if you don't think you are competing with them.
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