How much is too much? (agent, sales, housing, comparable)
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My husband and i are wanting to purchase a home. We found a house that needs alot of work, probably around $20K minimally, in a really nice neighborhood but we dont know if they are asking to much. We have a budget of about $225,000-$235,000.
They're asking price is $249,000 and we have found that the other houses in the neighboorhood are priced at an average of $250,000 but are in good condition. This one clearly needs alot of labor.
The house has only been on the market for 8 days with no bids, clearly because people cant see past the junk in the house, but we are afraid the neighborhood will be the selling point.
Can we assume that we can almost minus the cost of repairs from the average housing price to equal the price we should bid? Or do we assume this is the price they wont budge for because the neighboorhood is so nice?
Real estate has been doing well and we cant seem to get a clear idea from our agent if we should bid low or forget it? I dont know if he is just trying to keep it high for his side of the payment. Thats what all my friends caution me about.
Help, is my agent being vague on purpose?
Thanks
Hannie
What have the homes in the neighborhood been selling for? Asking price is nice but it's not necessarily market.
Having purchased a number of homes that need repair I feel confident in telling you that if you are estimating 20K you're probably low.
You should never assume anything about a seller, I'm constantly surprised by them. You need to make an offer more based on what you want to pay and less on what you think the seller is going to accept.
Reading between the lines I hear you looking at the house in poor condition because you think you may get it in your budget. Don't forget the repairs, they will cost also, so add them in.
Maybe you should consider making an offer on the homes in good condition, but offer where you can afford. An offer will take a day to turn around, the house in poor condition will probably still be around.
Your agent should provide you with the sold comps in the area, you should use those to justify your offer price. Be ready to walk rather than over pay.
What have the homes in the neighborhood been selling for? Asking price is nice but it's not necessarily market.
Having purchased a number of homes that need repair I feel confident in telling you that if you are estimating 20K you're probably low.
You should never assume anything about a seller, I'm constantly surprised by them. You need to make an offer more based on what you want to pay and less on what you think the seller is going to accept.
Reading between the lines I hear you looking at the house in poor condition because you think you may get it in your budget. Don't forget the repairs, they will cost also, so add them in.
Maybe you should consider making an offer on the homes in good condition, but offer where you can afford. An offer will take a day to turn around, the house in poor condition will probably still be around.
Your agent should provide you with the sold comps in the area, you should use those to justify your offer price. Be ready to walk rather than over pay.
Thanks for replying!
Well when they showed us the house initially they said a house down the road sold for $303,000. But looking on Zillow.com we havent found any houses anywhere in the neighborhood selling for that much. So im not sure if we are getting facts or not...
We do know that the previous owner just passed away and his out-of-state son is selling the house after he sells his collections in the house. Its listed as an estate sell. Does that tell you anything about what we should be thinking from their point?
We cant find any homes in the area that are new and below $300,000, unless we are shooting for a mobile home. The area is old but in high demand. And we cant afford to commute more than 35 mins away from where we both work (where the new houses are) plus we are thinking in a couple of years we have to move for work and we want to rent it out. Should we even be considering a home?
Also, there is so much junk in the house that they cant even do an inspection. I know i wouldnt buy the house without one, but we've been told to act quick by our agent if we want it because there is competative businesses looking for houses like this in the area?
Suggestions?
If I was working with people that had narrowed down their search to a neighborhood I would supply them with the listing sheets for all properties that had sold in that neighborhood for the past 6 months.
If your not getting that from your real estate agent, request it. If you're working with a good real estate person you shouldn't need Zillow.
Also ask about your agency relationship, are they working for your interests?
The fact that it's an estate sale does imply some sense of disinterest on the part of the seller, but I've seen the heirs of estates have unrealistic expectations.
Look at the comps, they will tell you the story. It doesn't take long to pull comps, and an hour should be ample time to review, but take the time you need to compare what you're looking to buy with what has sold. Don't let the real estate agent give you a sense of urgency to move before you've looked at the sales info.
BTW - An old area in high demand is a good thing in real estate.
I'm going to have our agent pull up a comps listing sheet for the area. Im glad to know they can provide us with something like that! Thats going to be great to look at...
I think maybe i havent been using our agent to his fullest potential. Thats also great to hear that an old area in high demand is good!
If i may ask you another question because you've been so insightful!....
How do we know when the comps in our neighborhood have been priced for upgraded renovations or because of location or so on. Our concern is that we have looked at so many old houses in the city but we cant get a feel for what makes the price of the home.
For instance, we've seen some pretty trashy homes go for more than this price, and we cant figure out what makes it sell. It just seems so vague when the agent doesn't break it down for us and say things like "well a newer kitchen would up the value by $$ much" or "seeing that this kitchen is really bad and the house down the street has a newer one, this price isn't comparable". Is that an opinion she wouldnt share with us normally as our agent?
Maybe im looking for an opinionated friend instead of an agent for that?
Oh i have so many questions.. you dont happen to know of an agent who works the cali central coast that you would refer?
When looking a comps all you see are the facts, the list price, the selling price, the sqfts, the address, the year built, number of beds and baths etc.
Sometimes the photos of the property will show you what the photographer felt was attractive about the property. But you will never know the motivation of the buyer. Why they chose that property over the others on the market at the time. Or why they paid what they paid.
Working with a real estate person that is active in an area can be insightful because they will have been in a number of the recently sold properties. but the real estate person opinion is just that it's their opinion. You need to form your own opinion your agent should be helpful in supplying the data.
I work in a coastal area and specialize in boatable waterfront properties, in my opinion the quality of the water is the most important component in the price of a property, most people buy based on the kitchen, and the neighbors. go figure.
All other things being equal look at the "bones" of the house. Choose a well built house in a good neighborhood, on a nice piece of land.
Kitchens and baths are typically the most expensive rooms to redo, so if those rooms have been updated or are acceptable then those properties will normally sell better.
dont rely on zillow - get your agent to do the work for you - while they cant tell you what to offer, they can provide you with the facts and you make a decision based on that
What city/state or even zipcode are you looking in? There may be local websites that can give you more info-- if we know where you are we can sniff around a bit.
Also, have you considered going through the house with an architect before making an offer? These are hard times for architects, so one might give you a break on a walk-through. They'd be able to give you a much more solid sense of what any remodel would cost and that would give you a better sense of what you're looking at money-wise.
The fact that your agent didn't automatically offer comps and is pressuring you worries me. Comps are how you make an informed decision and telling people to be quick without giving them facts isn't the best way to proceed.
What city/state or even zipcode are you looking in? There may be local websites that can give you more info-- if we know where you are we can sniff around a bit.
Also, have you considered going through the house with an architect before making an offer? These are hard times for architects, so one might give you a break on a walk-through. They'd be able to give you a much more solid sense of what any remodel would cost and that would give you a better sense of what you're looking at money-wise.
The fact that your agent didn't automatically offer comps and is pressuring you worries me. Comps are how you make an informed decision and telling people to be quick without giving them facts isn't the best way to proceed.
Good advice, I'm always concerned when someone attempts to close me before providing me with answers to my questions.
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