Real Estate - Home Shopping Headaches: Market Trends, Timing, New Construction, HOA's, Warranties, Etc. (Seattle: real estate market)

[Jane Doe2]

The market is favoring buyers with good credit, stable income and moderate down-payments (10-15%) and sellers may be accepting the fact that the days of loose lending are over and finally dropping prices a little. But even with the (FM)2 bailout, predictions are that the market will continue to be soft through 2009. If this is a buyer's market, why am I losing sleep and getting headaches from my home search?

How resistant will Seattle sellers and builders continue to be over sharp price cuts (10-20% or more)? I don't want to buy in the boon docks if something closer to city center might become affordable in the next few months. I'm getting resistance on offers 10% below list even when properties have been collecting dust for 4+ months, even on new construction that will eat the builder's profits the longer they sit.

I'm stressing out over skimpy home warranties, alternately missing or extremely restrictive HOA's for conjoined properties, trashy homes at high prices and hungry agents and the unpleasantness that goes with smelling their desperation. It's hard to trust that I'm getting the best possible deal knowing that everyone involved with selling or lending in the Seattle area has been spoiled rotten with jacked up prices.

Is is really rude to offer a low price and should my buyers agent or I care about offending a seller? This is hard cold dollars and business here, not match.com. When a seller thinks they deserve 10% per year profit on their home and it isn't all that great and I know what they paid, I think a reality check isn't out of the question. When sellers, bank-owners and builders are all on the brink of disaster, they need to accept the fact that a deal that benefits me just a little bit more than them is part of the circle of life in real estate.

I also struggle to appreciate the mindset of the real estate community that drove the working middle class out of Seattle. I know money and greed are paramount everywhere, but Seattle is too educated, contentious and liberal to have let this happen. When it takes 250k to buy 800 sqft of cheap, old & dirty downtown, it's time to consider what type of city Seattle wants to be. I'm not convinced that a city full of millionaires is realistic and with lending practices getting conservative again, who's going to buy all those 600-800k condo's? I don't intend to offend anyone with this post, but rather get people to contribute there perspectives and insights related to shopping for a home in the Seattle area right now. Dang my head hurts.

[allforcats]

Hi. I'm sorry, but I'm confused. What is the post asking for?
Given the many subjects of the title and of the post, and the many points of view expressed in the post, I wonder if it might be possible to summarize what is being requested?

[Jennibc]

No, I don't think it is rude to offer 10% below the asking price and I don't think it's rude for the seller to turn you down either. While someone's house has been on the market for 4 months and you are offering 10% below, you need to consider the reason they are not taking your offer is that they may have already come down that far from the original list price and feel that another 10% is more than they should have to bear.

As far as you seeing what they paid and determining that they shouldn't expect a 10% increase every year, do you know how much they put into the house? There was a time in this city that you had to wait a year or two to get contractor in to even look at your house, so many remodels were underway. They may have upgraded their houses substantially so they may not be selling the same house they purchased.

[snowdogging]

King county has already fallen 11% which is unlikely included in the listing price. Your post is written like you have already lost. The art of negotiation is either get what you want or have the courage to walk away. Since most people are in agreement that the market is nowhere near the bottom you are in a win-win situation if you want to be.

[Ira500]

In my humble (ha!) opinion:
Just like the Seattle area has a bunch of microclimates, they also have a bunch of micro real estate markets. Places such as Duvall and Puyallup's median home prices have declined in double digits over the last year, but places like Greenlake, Phinney, North Capitol Hill, and Mercer Island have gone down less than 2% in the last year, and in those places homes are still sell fairly quickly.
Why are sellers reluctant to sell places for 10% or more off of their original asking price?
One reason is that the original asking price might be 10% lower than what it would have been a year ago. people want to sell homes for what they think they can get, and it's not so much a matter of greed, so it doesn't really matter that much what they paid for it...On the other hand, if you see a home and ask a real estate agent if they think it's a good price, the vast majority will say yes and that you should make an offer. It's like asking a barber if you need a haircut.
If you see a home you're interested, ask an agent to do a CMA ( Comparative Market Analysis) or do the reseach yourself, and thenlook up the home in Zillow, cyberhomes, and eppraisal, to give a general idea.So if you find a home and the asking price is 300 thousand, and the CMA and Zillow and Cyberhomes all say that the home is worth 375, would the seller consider an offer 10% less than asking price?
No, because it's very fairly priced.
Are sellers and their agents insulted by lowball offers? I don't know. I've had offers I've made on behalf of clients ignored, and then the agents wouldn't return emails or phone calls....Plus, it doesn't look like prices are about to start going up. Be patient, and do your research on the current market value of the home. Just because you know that the seller will make an enormous profit doesn't mean that they should sell it to you at a significant discount...it's more a matter of what the home is worth...If they've made 10% per year on it, so what if you can still buy it for significantly less than comparable properties?

[70Ford]

The impending Seattle housing market collapse.