‘Buyers Feel Free To Make Lowball Offers And Just Wait’
Holden Lewis writes for Bankrate.com. “House prices are falling in much of the country, and more than 4 million dwellings are on the market. That’s bad news for sellers, because buyers feel free to make lowball offers and then just wait. It’s a buyer’s market, but don’t despair.”
“You can increase your chances of selling your house in a reasonable time by following a few good guidelines. First, play the cards you’re dealt. A successful home sale begins before the house is listed, when you decide not to expect to make a killing.”
“‘All you can do in a falling market, if you have to sell, is have the best possible product out there at the price it should be,’ says Diane Saatchi, an agent with Corcoran Group on Long Island, N.Y. ‘Not what you wish you could get, not what the neighbor got two years ago, but at the price you should get now. That’s the reality.’”
“For many sellers, ‘the only disappointment is that their friend, six months or a year ago, got more than they’re getting,’ says Bill Christiano, a loan officer in Westchester, N.Y. ‘Ego gets in the way when they’re trying to sell. Or stubbornness, I should say.’”
“Offer incentives. Besides a low price, incentives for buyers include paying discount points to lower the mortgage rate, paying closing costs or providing flexibility about the move-in date.”
“And most important, price realistically. ‘Don’t get greedy,’ says Pam O’Connor, CEO of a network of 650 regional and independent brokers. ‘Just because it went up to some astronomical value and it went down from there, you have to be realistic that there has been moderation in the market.’”
“It takes research, often conducted by a real estate agent, to come up with a realistic asking price, and discipline to abide by it. ‘It’s not enough just to throw out a figure,’ says Mario Villena, vice president a Miami-based online real estate brokerage.”
“Using tools on sites such as HomeKeys, Zillow and Redfin, buyers can get an idea of your house’s market value. You and your agent can’t bamboozle buyers because they have so much information about comparable house values.”
“Villena suggests asking for just 3 percent to 5 percent more than you realistically expect to get. Setting an aggressive asking price attracts more prospective buyers to your door, discourages lowball offers and saves negotiating time. ‘You’ll know fairly quickly whether they’re willing to meet you or not,’ Villena says.”
“In a market where prices are falling, asking prices must fall, too, ‘which is a whole new concept for sellers right now,’ Saatchi says. For example, if the Smiths sold their house early this year for $700,000, you might have to ask just $695,000.”
“An agent has to have tact to break the news, Saatchi says: ‘When we tell our clients this, they think we are the devil.’”
For example, if the Smiths sold their house early this year for $700,000, you might have to ask just $695,000.”
That’s a .7 % drop in price. That’s devastating.
That is tough! You could buy a lot of Starbucks lattes with $5000.
The article earnestly advises “not to expect to make a killing”, “break through your ego and stubbornness”, find the “discipline to face that reality” then suggests…. a .7% reduction?
Does anybody read this stuff before it’s printed?
typical nonsense from a long island realtor - they’re still in denial, or think they can trick buyers into thinking a .7% decrease is a huge concession by planting this idea in the media. kinda O/T; A friend just went into contract on a house here for list price b/c the realtor told them there were 3 other offers at or above list. Is it possible/common for a realtor to lie about these other offers (i.e. maybe there were no other offers), or is that just not done?
Sounds like your friend took a big swig of the Kool-Aid, becoming one of the greatest fools. Maybe you can wake them up before they make the greatest financial mistake of their lives. Oh, and of course the realtor lied. That is one of the oldest tricks in the book.
yes, and it gets worse b/c they will be carrying 2 mortgages as their other home was damaged in a fire and isn’t ready to be sold just yet. I can’t bring myself to say anything…really, what can I say?
can you somehow get proof that there were/are other offers? talk about a shady business..
Please beg him to bail out and tell the sellers that they can comtemplate the “other” offers. He is not worthy of such a consideration, especially when “another” bidder was offering above list price. My bet is he is going to get afterwards a phone call informing him that the sellers “really” want his offer above all the other because, you know, he is such a great guy (gal). Then, if he likes the place, simply make a lower counter offer. There is now plenty (of falling knives) to catch on LI. Was an open house bonanza over the weekend.
LI renter,
Agree with the others. Talk your friend out of this purchase now, if possible. He/she will thank you for the rest of his/her life!
Otherwise, suggest your friend makes a new offer at 30% off list price. Otherwise walk.
It saddens me that so many people don’t do a stitch of research on their most expensive purchase. One that can affect them for decades, even deep into retirement (like paying $200K more than necessary — it will affect retirement savings).
Seriously, risk the friendship, because it’s not too late.
Good luck!
I would just email him this thread.
Anything is possible. Was the realtor the buyer’s agent? That is a definite no-no.
I’d have your friend ask for the names and amounts of the purported offerors. If they can’t provide them, I’d consider noticing a rescission based on fraud. Talk to a lawyer first, but, the person made an offer based on intentional misrepresentations made solely to get the person to make the offer? You can’t do that (legally).
Of course, your friend is not the wisest person to get played in such a fashion when the odds of that being true are close to nil. Why would anyone accept a lower, contingent offer?
“That’s a .7 % drop in price. That’s devastating.”
I agree, it will be devastating for those that chase the market down with tiny little reductions. Sellers need to realize they’ll be further ahead if they make large cuts initially to undercut the competition.
it’s not just a $5,000 loss for these people, they probably thought that they’d sell it for more than asking. so not only have they not gotten appreciation, but they “lost” money. not only that, they probably think the $5,000 came out of their pocket.
It did come out of their pocket–through their HELOC.
I also think it’s part of the disconnect. We have people who have never had $10k in the bank buying $500k houses. There is a disconnect.. on one hand there is an illusion of large potential paper wealth. On the other hand $5k is a lot of money to them. I think that’s part of the problem. Like the handyman who works on my house just bought a house. He commented “they [the bank] would never dream of lending me money for a car, but a house — no problem”. The guy has terrible credit, has no credit card, needs cash to buy supplies.
For example, if the Smiths sold their house early this year for $700,000, you might have to ask just $695,000.”
I would try asking $697,500 for 6 months, then drop it to $695,000 only as a last resort.
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How about $699,999?
Throw in an old car also.
I’m not throwing in my 1999 Miata! Forget it! I’m not giving this house away! And they’d better agree to feed the squirrels!
How about some brownies?
Brownies are so 1991. This housing slump deserves Cup Cakes!
One could drop the price by $5000 for each 6 months it does not sell. After two or three years it will be the most expensive home on the market in it’s class!
I think some people would rather default on a “three quarters of a million dollar house” than to drop the price 100K to sell it.
They feel *rich* living in such an expensive house–even with 0% equity. Who are we to take that feeling away from them?
“An agent has to have tact to break the news, Saatchi says: ‘When we tell our clients this, they think we are the devil.’”
I don’t think you’re the devil. But you ARE going to hell.
posted ” Saatchi says: ‘When we tell our clients this, they think we are the devil.’”
You are the devil.
If the realtor is the devil; imagine how evil low-ballers are…..LOL
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1997 prices + 3.5% annual appreciation will be my offers.
Is that +3.5% above inflation, or total?
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total. this is your offer. let ‘em counter.
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CSCO once traded at $82. No one ever believed it would fall to $9. BUT - Corrections don’t happen overnight.
Actually it happened pretty quickly, at least 90% of the drop. I distinctly remember trading CSCO in the mid-teens in very early ‘01 and I don’t think it’s split since then.
I said $10 and darn near got fired by the PM at the meeting. He didn’t forget that comment for weeks, but seemed to by January when it was down at 9.
I expect to see a similar pattern for housing as we saw in the 1929 and 2000 stock mark crashes & in the Japanese housing market: A quick initial decline followed by a long and slow grinding down of prices.
Gekko — that is exactly, to the half percentage point, how I’ve planned to calculate my offers. Still too early for a high probability of acceptance, IMO, but cash is ready for the motivated seller.
Agreed.
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http://www.files.bz/files/11251/Financial%20Calculator.xls
http://www.files.bz/files/11251/RealEstateValuationMethods.xls
Still say you’re being way too generous.
Charity should be a part of every person’s life, IMO. Why kill when you can just maim?
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“I’m my own favorite charity.”
That 5k reduction is an insult. I sold a 2 year old house this past May.
I did the comps, and made sure my house was 10k lower than anything else in the development. Going lower was not an issue for me; my goal was to take whatever I could get and bail. I didn’t ask the realtor what to do after I saw the house wasn’t getting enough traffic at his price. I told him what to do; after all, it’s my financial future that was on the line. Zillow was not a particularly reliable source for pricing-they estimated 40k more than I sold for. I also paid all closing costs (10k). I was just grateful to get out. I had lost my job and wasn’t having any luck finding new work. I was down to 3-4 months of reserve. Now, I am a renter who is debt free and at peace. I checked on my old neighborhood recently; the sellers who had their houses on the market the same time I did but wouldn’t cut their price are still there. But now, they have even more competition, and they have knocked their price down to where I sold at 5 months ago. Glad I didn’t let greed get the best of me.
you’re one of the rare sellers who has a clear grasp of the psychology of all this - nice work getting out. bet your old neighbors who were probably mad that you ‘lowered’ the comps now wish they had done the same.
“…bet your old neighbors who were probably mad that you ‘lowered’ the comps now wish they had done the same.”
Or else they just curse your good fortune. It’s disturbing how dark people can be when they see someone getting a better shake than they do/will. Reminds me of the “crab theory” that was party of the training material for my 1987 Franklin Day Planner. The crab trying to climb out of the bucket won’t make it because the other crabs will drag it back in.
crab grab ass…LOL…nice analogy.
Congrats on being debt free and having peace of mind. Anecdotally, you’re the first seller that I’ve read of who’s shown a real grasp of the market, and how to price your house. Key probably was not being some sheep who relied on a realtor for advice. All best wishes.
Oh plenty of SELLERS have a grasp of the market, but there are lots more LISTERS who don’t. Price will ALWAYS get you from listing to selling.
Yes, and for the next several years people are going to tell you how “lucky” you were. I’ve heard the same thing about a house I sold this Spring, even from the agent (well, she told it to her husband, who passed it on to me) - who was surprised I didn’t want to list it for a higher price!
You were smart…..analyzed your situation and will live to fight another day. While the others will crash and burn…..
I’ve was in business a long time and made really great money and lost really great money. Knowing when to cut my losses was probably the best, most important, and certainly a very expense lesson. I only wish I learned it earlier than I did; but I guess that’s universal.
…and then pass the crackpipe…
“…and then pass the crackpipe…”
Precisely. Saatchi will learn the hard way that these chincy price reductions do nothing but guarantee an endless ride on the MLS.
Another greedy trend I have noticed over the last few years, is sellers trying to capitalize on future profits buyers might enjoy. For instance, attempting to sell a house for much more than it is worth because the zoning may change to commercial in the future. Or, baking in profits to the listing price of land because it is “going to be the next hot area.” To me, those are profits that a buyer should enjoy, if things happen to play out that way. The greed is just disgusting right now. I don’t know why ANYONE would be buying in this market. There are no deals to be had right now.
“is sellers trying to capitalize on future profits buyers might enjoy.”
That has totally happened in Vancouver, where condos in one of North America’s worst crack and heroin neighbourhoods have been sold at a large premium to today’s existing luxury condos in actual good nabes.
The marketer told people that the new development will instigate big change in the bad ‘hood, but the problem is that the project was priced as if those changes have already taken place. No premium for the risk. No thanks.
Vancouver market watchers *know* I am talking about the ‘W’ (link I have some cool parodies of the marketing slogan there too!)
I should mention that we’re talking in the range of $600-$800 a sf. No mortgage interest deduction in Canada. Rent for 2BRs that pre-sold for around $600K is about $1800-$2000 today - but that’s in good neighbourhoods, not in cracktown.
Anyone able to top that for bubblicious?
There was a house like that at the end of my street in Dallas. It was across the street from a hospital so the people trying to sell it priced it 200K higher than anything else in the neighborhood and tried to market it as a doctor’s office for for the land to knock down and build an office.
Needless to say, it’s still for sale.
“For instance, attempting to sell a house for much more than it is worth because the zoning may change to commercial in the future.”
Only the dumbest of the dumb would buy that way. Two of my buddies are commercial property brokers and virtually 100% of the time, the property must already be re-zoned to get the sale done. As a practical matter, sometimes there are “guarantees” that can bridge/buffer the actual re-zoning, but that is immaterial to the point.
Sellers charged higher land prices for years in Palmdale Ca. regarding talk of a airport they were thinking of building . After all these years ,still no airport. Appraisers can’t consider possible future value . Why do you think the realtors sold based on the running out of land BS ?
Wiz,
I know someone who bought desert (Mojave/Palmcaster) land back in the 50’s or 60s because it was “the next big thing.” It’s never really done much, because he bought at a peak when everybody was rushing to buy property there to ride it all the way to the top!
He regrets that decision to this day.
As a planner, the question I get the most, several times on a daily basis is: Can I get this rezoned to a higher density? Or, my agent told me I can build X units on this property. Is this true? Most often than not, the answer is NO.
Agents lie all the time. There’s a lot down the road from me, 10 acres, mostly under water. Existing zoning–which existed BEFORE current buyer had it–is “conservation.”
At best, with a big battle, you may be able to put 1 house on it, but you can’t disturb more then 4/10 acre total (if I remmeber the law correctly.)
Call the R-E agent (I do this for a yuk every now and then) and she’ll tell me I can put 10 houses on it.
Advantage, in the long-term, in any asset market, always goes to those who are patient.
Currently, the advantage in the housing market is with those who can afford to wait. It should be obvious that lot more buyers can afford to wait than sellers.
The Waiting Game has barely begun. Buyers who hold out and sellers who don’t are going to win.
Buying low requires lot of patience; selling high requires quite a bit of cunning, or good luck.
Jas Jain
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Exactly. Who can hold their breath longer? The answer is clear. Buyers don’t have to buy, but many sellers have to sell.
We are only in the 1st Quarter of a 4th Quarter game.
No, in the US you must use the baseball analogy — in the 1st inning. And easch inning could last a year!
Jas Jain
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My guess is that the top was June 2005. I think we will have cumulative price declines totaling 20-50% (depending on location and type of home) over 3-5 years followed by 2-3 years of price stagnation followed by a return to normal long-term historical nominal appreciation of 3.5%.
Again, my estimation is pretty much the same, though it is always subject to tweaking based on what I learn on Ben’s blog. Not sure why, but this reminds me a bit of a pinball machine that you can lift without ending the game. By faithfully following this blog, I believe almost any humble-enough idiot can stumble their way into a great move re their housing. Well worth the price of a handsome Paypal donation.
Chip,
Absolutely! IMO, by following the collective wisdom on this blog, prospective buyers will be buying in at or near the bottom. Such a great group of people here!
Top of the first - and only one out.
In my are, they have not even started the national anthem.
Ooohh, I like it! The fat lady sings - and THEN the game is on. Crash, then BURN.
No, in the US you must use the baseball analogy — in the 1st inning. And each inning could last a year!
Jas Jain
mortgage tidbits from my email box
From national mortgage news:
“For years, Friedman Billings Ramsey was the “holy roller” of mortgage REITs, preaching the benefits of using the structure when taking residential lending firms public. And for years, some firms bought the speech, went public, and paid out a lion share of their earnings in the form of dividends. Then a “correction” swept the subprime sector in mid-2005, a correction that is still occurring. Today, being a mortgage REIT doesn’t look like such a good idea. Of course, trends come and go. But what about FBR itself, the preacher? Last week the investment banking firm shut down its ABS unit. This was the division that gathered residential product for securitization into ABS. But guess what? FBR, a spokeswoman confirmed, also shut down its mortgage trading desk. A spokeswoman said about 12 people were let go. She said the company, however, has not closed the group that takes mortgage firms public. (There were rumors to that effect.)”
and from another great short prospect, imho: bnc mortgage
“Great BNC Programs:
100% LTV with 600 score - full doc or stated
100% CLTV with seller carry 2nds down to 500 score
55% DTI allowed up to 100% LTV with $1,500 disposable income
No trade lines required to 95% LTV
Use 95% of rental income to 95% LTV
Use high score to qualify up to 95% CLTV
Collections, Charge-offs, and judgments may be ignored
1% YSP still allowed with no pre-pay”
where the mortgage money is going TO is falling like a house of cards while the originators are trying to get the last pile of #%&* in the door before they close the door. laughable.
Is FRB still breathing? I thought its earnings were going to get crushed by the inverted yield curve. How did they make it this far?
The inverted yield curve has been nasty to FBR. Basicly they took down alot of losses and locked in financing on thier fixed rate mortgage portfolios. The with the ARM portfolio they are waiting for them to reset. It was always a stupid business model.
The sad thing about FBR and the residential mortgage REITs is that they dragged down the values of the commercial mortgage REITs with them. This has killed the market for new REIT IPO’s even for those with deserving business models not al all linked to residential mortgages.
“Villena suggests asking for just 3 percent to 5 percent more than you realistically expect to get. Setting an aggressive asking price attracts more prospective buyers to your door, discourages lowball offers and saves negotiating time. ‘You’ll know fairly quickly whether they’re willing to meet you or not,’ Villena says.”
Not.
Cash is king and when a correction is in play cash is REALLY king. Everyone should be looking to build up cash by selling hard assets. If you are asset rich but cash poor and cannot make montly payments then you are toast and will lose your assets for penants. Better to sell low on your terms rather than lose everything on the bank’s terms.
Exactly……
Along with some business associates, we are forming an investment trust. $20,000 a unit. Maximum units 200. The cash will be placed in CD’s at 5.5%. We will then just sit and wait for the monkeys to fall out of the trees. We figure on buying approx 15 properties over the next three years. OK……..now on with the show.
Did’nt you get the memo? Credit is the new King. Many home buyers have willingly subjugated themselves to him by the thousands.
“Better to sell low on your terms rather than lose everything on the bank’s terms.”
That’s the winning expression. If MSM were smart, they’d be running this as a banner under any housing discussion screen. Even the real estate industry would profit, because it would help break the logjam and get transactions moving. But it’s nonetheless pretty unlikely.
“Sell when you can, not when you have to.”
I cut through one of the many hoods in Sacramento on my way to work and see a ton of hood homes for sale. They want 230K to 280K for these dumps, that were priced at 80K a few years ago. I would not pay $5 bucks to live in one of these crap boxes. Oh I could see getting up the next day and getting the paper to look out across my lawn at the baby boomer homeless guy pushing a shopping cart of 40 ounce beer bottles the local gang bangers drank that night, before they broke into somone house or did a drive by. That is the way it is in Sacramento, all over the place, the hoods here have lots of names, Oak Park, Del Paso, North Highlands, South Sacramento, North Sacramento, the City of West Sacramento. I know young professionals who actually belived the hype the past few years and bought in these areas fearing of being priced out. They are fools and now are in mortgage prison in the hood. They are stuck now way to get out, nowhere to run, upside down in a mortgage for a hood house. The drums keep getting louder and louder. Oh that was just a bad wheel on the homeless baby boomer
shopping cart going by.
“in mortgage prison in the hood” - hey, good one!
I’m thinking of all the people who are going to be in mortgage prison in the condo hood all over Florida when six months ago they thought they were going to be living in paradise and paying for a swanky retirement.
I guess thats what it means to be locked into a mortgage, but look at the bright side, now you can get a 50 year mortgage when your 65 years old.
I see a feature film in the making “Mortgage in the Hood” I see flashes of “The Super” with the FB’s car on cinder blocks when he returns.
People who want to “invest” in neighborhoods that have nothing going for them, like many parts of Sacremento, should take a drive through the northeast and visit some cities, like Albany or Rochester, that have blocks and blocks of once-nice houses all boarded up with the occasional squatter or crack-house among them. Newark NJ has many parts like that, too.
And a lot of Sacremento is doomed the same way these cities were.
Can’t be abandoned houses. They’re not making any more land.
REAL or FAKE (from Bakersfield Craigslist):
Listen to this, everyone…I have up to 11(eleven) homes for sale in Bakersfield and JUST WANT OUT!! What that means is that if you have minimum downpayment, in the neighborhood of $15,000, I will put you in the house of your choice with virtually NO PAPER WORK…NO LOAN APP, NO CREDIT CHECKS,NO EMPLOYMENT VERIFICATION,NO ASSETS, NO ANYTHING! The only document we will draw up is the purchase agreement on the sale price,which is exactly the balance which is owed to the bank, and then the GRANT DEED IS SIGNED OVER TO YOU. YOU MAKE THE CURRENT MORTGAGE PAYMENTS CURRENTLY ON THE PROPERTY AND WE WILL CARRY THE MORTGAGE. WHEN THE TIME COMES THAT YOU SECURE YOUR OWN FINANCING,WE PUT YOU ON TITLE!! You could have us carry your mortgage indefinetly,or wait some 8-12 months while you build credit with our lenders and then,if you so desire, WE COULD ACTUALLY DO THE FINANCING FOR YOU!! The sales price(s) of the home(s) are the balances of what owed the bank.NO UPS AND NO EXTRAS!!! Your deposit is your key to the house and home ownership. There is absolutely no easier way for ANYONE TO OWN A HOME!!
All the homes are approximately 2000sqft or larger and have 3b/r and at least 2 baths;central a/c and lots of space.Good areas!
Act now…next year at this time, prices will begin to rebound and you can be on the plus end of a lot of built in equity!!!!
INVESTORS ARE WELCOME!!!!{ ONE OF THE PROPERTIES HAS APPROX.$90K IN EQUITY RIGHT NOW}! Call Dennis or Erick @ 323.496.3460 ASAP!
1120 Radcliffe St at Acasia
http://bakersfield.craigslist.org/rfs/217423718.html
I dunno, but looks good. I’m going to modify it a bit and post it on our local craigslist.
Isn’t this the old “land contract,” or “contract for deed?”
So nice of them to donate that $90K of “right now” equity. “Hey, Ma! The man here says we get a free lunch!”
Wow. Note the 323 area code.
That sounds like high rent and a huge deposit. No wonder he does not need a credit check.
The way it’s written, sounds like they’re going to take your money and run. But I’m just a skeptic.
Test
REAL or FAKE (Bakersfield Craigslist):
Listen to this, everyone…I have up to 11(eleven) homes for sale in Bakersfield and JUST WANT OUT!! What that means is that if you have minimum downpayment, in the neighborhood of $15,000, I will put you in the house of your choice with virtually NO PAPER WORK…NO LOAN APP, NO CREDIT CHECKS,NO EMPLOYMENT VERIFICATION,NO ASSETS, NO ANYTHING! The only document we will draw up is the purchase agreement on the sale price,which is exactly the balance which is owed to the bank, and then the GRANT DEED IS SIGNED OVER TO YOU. YOU MAKE THE CURRENT MORTGAGE PAYMENTS CURRENTLY ON THE PROPERTY AND WE WILL CARRY THE MORTGAGE. WHEN THE TIME COMES THAT YOU SECURE YOUR OWN FINANCING,WE PUT YOU ON TITLE!! You could have us carry your mortgage indefinetly,or wait some 8-12 months while you build credit with our lenders and then,if you so desire, WE COULD ACTUALLY DO THE FINANCING FOR YOU!! The sales price(s) of the home(s) are the balances of what owed the bank.NO UPS AND NO EXTRAS!!! Your deposit is your key to the house and home ownership. There is absolutely no easier way for ANYONE TO OWN A HOME!!
All the homes are approximately 2000sqft or larger and have 3b/r and at least 2 baths;central a/c and lots of space.Good areas!
Act now…next year at this time, prices will begin to rebound and you can be on the plus end of a lot of built in equity!!!!
INVESTORS ARE WELCOME!!!!{ ONE OF THE PROPERTIES HAS APPROX.$90K IN EQUITY RIGHT NOW}! Call Dennis or Erick @ 323.496.3460 ASAP!
1120 Radcliffe St at Acasia
http://bakersfield.craigslist.org/rfs/217423718.html
If prices are going to rebound then why doesn’t he just keep them and make a killing. Crispy you should post on Craigslist in Bakersfield that anybody who does not low ball offer a house is a moron. Hopefully it will post right below “Call Dennis or Erick @ 323.496.3460 ASAP!”
Agree. If these clowns are trying to finding someone to take their chair. Someone who is obviously deaf - as the musis has stopped playing!
“purchase agreement on the sale price,which is exactly the balance which is owed to the bank”
I just calculated the probability that 11 houses would have market value exactly equal to the balance owed the bank, but if I wrote it out here, even in exponential notation, it would take several minutes to scroll through.
Sounds like a pump & dump to me.
Heh. Nice reference to Fermat
No cupcakes, no deal.
A house across the street from me went up for sale in November 05. It was obsenely overpriced. I made two offers I thought were pretty generous over the last summer. Both were turned down without even a counter offer. The people that owned the house were upside down and would have had to bring money to the table. I thought they would eventually lose the home or have to come down, but no… the house just recently sold to a Texas couple that paid almost full asking price. They told me they thought it was reasonably priced compared to Texas.
Where is the house…..outer Mongolia? TX ain’t that high compared to most markets. Just curious if they are shooting straight with you.
Actually the housing market in Ulan Bator is getting kinda tight:
http://www.tripadvisor.com/ShowTopic-g293956-i9383-k492625-Looking_for_Accomodation_08_10_2006-Ulan_Bator.html
Sorry about the long url. I promise to learn that tiny thing soon.
Paul — if you don’t mind a yurt that is not in the center of town (we’re talking a mile or two away, max), I can help get you a great deal. For heat, you’d use “all-natural” materials. Yak butter is great, once you get used to it. Winter there is not as pleasant as it is in Syracuse or Ketchikan, but there’s no totally free lunch. If you refer to the place as “UB,” knowledgeable people will know you’re an insider.
“For many sellers, ‘the only disappointment is that their friend, six months or a year ago, got more than they’re getting,’
And that’s the crux of the matter.
When I was working in marketing new developments for builders, there was a bit of buyer psychology I referred to as the Sister-In-Law Factor. Meaning, a female homebuyer would not settle for a house with one amenity less than what her sister-in-law got.
So, I submit that sellers now are not only disappointed about possibly getting less than their neighbor, but you had better believe that the wife is going to go down with the ship rather than have to admit to her sister-in-law that she didn’t realize a 600% profit in two years.
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But the real problem is that they already bought that “Upgrade” House to keep up with the Joneses . Because they were so confident of their RE expertise they thought they’d have no problem selling the old place. Well, now, they have two mortgages and the ice is starting to melt right underneath their feet as the old house sits at the dream price. The water is getting higher and higher and is now covering their nose and mouth. They hope that the market comes back and their lungs can breathe that precious oxygen again but it never comes. How long can they hold their breath?
http://www.silverbearcafe.com/private/images/drowning.jpg
Hey Gordon, what happended to “greed is good?”
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I have no problem with people trying to make as much money as they can for themselves - as long as it’s legal. However, many of these idiots overleveraged themselves and placed stupid bets that they couldn’t afford to lose. It’s time to take responsibility for their actions and get ready to pay the bill. I have no more sympathy for them as I do a degenerate gambler.
“I have no problem with people trying to make as much money as they can for themselves - as long as it’s legal.”
I do. Just because certain transactions are legal, doesn’t mean they are scrupulous. Greedy people are evil.
Bear, you remind me of my brother. He lacks ambition, but he refuses to acknowledge that the majority of successful, wealthy people simply used their ambitiion, combined with hard work and often some risk-taking, to get ahead. Instead, they’re all “evil” and “greedy” and “crooks” (his words).
Bill. Perhaps you should know that I am self employed and make a decent living. My dislike for greedy people doesn’t translate into a lack of ambition, drive, hard work, or lack of respect for successful people. It sounds to me like you base success on an individuals wealth. I surmise you are probably just another greedhead I wouldn’t much care for.
Hope Bill ain’t a Christian. I heard Jesus don’t like the greedy.
Some of the hardest-working people I know are extremely selfless and NOT greedy.
Most greedy people I know are the slackers. They want it all now, and they want it easy. Their idea of getting ahead is by fooling people out of their money rather than providing a useful good or service at a fair price.
God forbid someone would be motivated by something other than money…
This is why RE is so popular. The vast majority of people in RE would never have a chance to make anywhere near this amount of money. But even a simpleton can “get into” RE and start playing like a “mogul”. Look at the average IQ of RE boosters out there (not the corporate professionals) and you will find them to be of modest intelligence at best.
Of course they are greedy and want it now, this is the best opportunity they’ve ever had in their life.
(No mortgage interest deduction in Canada.)
No increase in the national debt either. Sometimes I think I’m actually a Canadian who happened to be born in the wrong place.
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Canada lives off of the goodwill of the American people.
BS. It is the other way around. The US depends on Canadian natural resources. The US can’t even feed itself anymore. Without Canadian electric power, it’s “lights out” for the US. Canada doesn’t want or need the US military.
Careful what you say, there, lib. Japan depended on SE Asia for resources for a while. Then they decided to just go and take everything. Given the choice of either a severely lowered standard of living or just taking what we want, I doubt many Americans would vote against the latter. Cuz, what the hell, you couldn’t do squat to stop it, eh? South Pacific and China had the U.S. to come to the rescue. Who would give a rat’s ass if anything happened to Canada?
Who would give a rat’s ass if anything happened to Canada?
Funny. That’s what most Canadians ask themselves about the U.S.
Canada rocks! Our cities envy what their downtowns have going on. Montreal, Quebec is one of the best cities in the world!
I also love the people and their politics. I am a wanna-be Canuck.
Belive it or not the only time I ever got mugged in my life was while visiting Toranto, and I lived in New Jersey at the time!
No seriously though, aside from Japan where people are paid to sweep sidewalks, I thought Canada is the cleanest place on Earth.
Try Sweden for a change - very clean place, too. They even rake the graveyards out in the countryside.
I think I’ve heard of this “Canada” place before. Where exactly is it again?
posted ” Canada doesn’t want or need the US military. ”
But of course they do get it. Just like Mexico. Neither country spends a dime on the milltary. This lets them whine in thier crap filled pants about everything…. knowing if you mess with them you get the horn from the 5,000 lb bull.
Comment by libertas
Spoken like a true frog.
Canada lives off of the goodwill of the American people.
My cat’s breath smells like cat food.
Sorry, I though we were having a non sequitur contest.
My worm went in my mouth and then I ate it…can I have another one?
The US people are living off the goodwill of the entire world (as if anyone on this board needed reminding).
posted “The US people are living off the goodwill of the entire world ”
The world has no goodwill, the world lives by the grace of the USA.
Stay tuned - in a few short years, you’re going to get to find out just how wrong you are.
@ Larry L
No, that would make you English…;-)
How do you guys feel about this?
I am putting in several lowball offers on rent at a few properties that I like. I feel kind of bad lowballing them, as I know they are already throwing at least double the asking rent at the home, but I figure “that’s business”.
Anyway, I was wondering what would be attrative to the potential landlords. I can pay them first, last and security all up front, and can take possession in 60 days; which I figure is probably longer then they would like (but that’ what I have to give my current landlord). I figure the cash in hand; now, will be attractive to them. Also, do you think I should offer for longer term leases? Like 18 or 24 months? I am looking to stay in this property (whichever it turns out to be) until I am ready to buy; its big enough for my current needs; honestly, its really the home I would like to buy (too bad its 600-700K).
Anyway, just wondering what would be attractive to a landlord? Cash now; longer terms, something I am not thinking of??? Raising the rent is not going to happen, remember, I am going a bit under what these people are asking (I just offered 1900 for a property listed at 2100/mo)..
Thx!
My guess is that a lot of these guys are trying to stablize cash-flow at this point. To that end, cash up-front would be more attractive then a longer lease.
longer terms are not attractive to a Landlord for a new tenant. If you turn out to be an A**hole or perputually late with payments they’ll want you out after the 1st year. Try longer terms on renewal. They’re not going to want to wait two months either unless the market is so weak they are having trouble filling the unit. But giving them a check for 1st, last, and additional security might speak volumes alone. Many Landlords are only asking for 1 months rent as deposit if the market is weak. Also, as many have warned here, you want a “Real” Landlord, one who is in for the long haul and is not a trapped flipper so interview them carefully.
That’s not a lowball, but cash is always king. I would offer a years worth of rent for a 40% discount if I wanted to lowball.
Good theory, but I wouldn’t pay a year’s rent in advance to a landlord who was in financial distress - or at least distressed enough to take a 40% hit. I’ve seen FAR too many people come through the office who have lost their deposits and rent and received a foreclosure notice or eviction notice when their landlord ran off. They’re good people. They paid the rent. It’s the landlords who were bad eggs, but my point is this: why take the chance?
Your point makes sense, but here’s how I see it. By the way he posted he obviously knows the risk or he wouldn’t even be looking at these types of properties.
Well, I do know the risks, unfortunately, where I live there are not many other options. I want to rent a home in a newer development; its overrun by flippers/specuvestors, there are dozens, if not hundreds of homes for sale/rent at the same time (in a development of about 1000).
I am aware of the risk, which is why I don’t want to give up a year of rent up front; but I also want to secure a property at the lowest possible rent, which is why I am looking about 90 days before I move.
You know what I am finding? People don’t want to talk to me; they are still dreaming that their homes are going to sell/rent in 90 days (before I move in) and told me to come back when I am “getting closer”. 90 days seems pretty darn close to me!
I think they just look at it like “another 3 months of money out the window” and just want to get someone in there ASAP to stop the bleeding. I understand that; but most people have to give at least 30-60 days at their current rental before they can move, no?
So, what I am thinking then, offer 3 months to secure the property (first, last, security); that gets some cash flow to them today, which is probably what they are looking for. Then also lock in a 18 month lease, more for my benefit then theirs; I hate moving all the time.
I look forward to the day when I can buy one of these homes.
Don’t worry, I am not getting weak, I am just getting sick of renting. Not sick enough that I feel like paying anymore then a 10% premium to own though! Not the 100-200% they are asking in my hood!
offer to be a stager/squatter
the next phase for high end properties
Late in the day, but I just picked this off a mortgage broker’s blog, by a very seasoned poster, in advising a feloow broker how to evaluate appraisals from different appraisers:
“Keep in mind also, that in a declining market, the older the sale the more it would have sold for.”
Bingo. We are there.
5k off of $700k price which equates to .7% off the list price and that’s considered a low ball what planet are these people on. Bwwwwaaaaaahhhhhhaaaa. Too funny. A lowball would be more like $420k and screaming bloody murder if the seller wanted to meet you at $450k and you counter back at $425 cause he insulted your intelligence.
Edgy, but I agree with you at this point in the game. If it doesn’t work this year, it probably will next year, assuming the buyer is not overly pickly about the property — more interested in actual value paid for rather than the perfect house.
If the deal is right you can make a perfect house. It would work now if folks got it out of their mind that .7% off list was a lowball offer buyers and sellers alike. If I was a buyer for a house in this market I would select a general area and a square footage and lot size. Either get it off the internet or find an agent who would give me a list of all that fit my criteria and start faxing offers and have the agent get back too me when some responded in the affirmative. Now imagine if everyone got in that mindset. Areas that I’m reading about like Az, Fl, Nv, with all that inventory. Oh yeah, in a heartbeat. Somebody who needs to move is going to jump at the offer especially if foreclosure is looming.
Yep……..that’s the gospel of buying.
Real Estate is not about selling.
It’s about buying………
If you buy right, you’ll always sell ok
.7 percent is about the same as a cashier giving over a few pennies if the bill comes out to $10.02 or something. It’s a nothing.
Maybe they should have a “give a thousand, take a thousand” cup at the settlement company.
Brilliant, Jim A!
It’s absolutely fair–and reasonable–to roll back any gains from the last few years when making an offer on a house. Most of those gains were ill-gotten anyway…prices driven up because people lied on their mortgage applications. And, for someone who bought before bubbling (10 years or so), any “gain” they had during those years is purely imaginary.
If they went and spent their imaginary gain, that’s not your problem!
It’s “absolutely fair” to offer any price you damn well please. The seller can take it or leave it. That’s the way markets work.
Exactly! More people need this attitude.
You have to be careful offering “A year’s rent if they give you a 40% (or any number) discount.” A lot of these FB’s are in trouble now, with many more in the pipeline, and they will simply let the property go into foreclosure after taking your ‘discounted’ rent. End result is, they have a ‘discounted’ one years rent BUT, in a few months, you will find a Sheriff’s Notice tacked to the front door which means you are only a few months away from being evicted. A judge will not give a sh*t about your one year lease. You’re out.
Notice to default to foreclosure three months, maybe longer if they declare bankruptcy and then a thirty day notice to evict and maybe wait for the Sheriff an additional month. Total elapsed time five months. So offer five months worth of rent and half deposit. However, check to see if the house has entered foreclosure though and then see if you can rent for .20 on the dollar. The FB should be pretty deperate by then. The worst is that you get to live in a house for three months for an 80% discount.
ATTENTION ALL BLOGGERS WHO ARE RENTERS DO NOT FORGET TO HAGGLE ON THE MONTHLY RENTAL AMOUNT. THE RENTAL MARKET IS UP FOR NEGOIATION JUST LIKE THE HOUSING MARKET.
Sorry, I think the rental market is about to go through the roof here in LA. There is not much we can do about it.
why? they aren’t making any more land?
posted “why? they aren’t making any more land? ”
No more land but, they are making more (higher) property taxes. Another bi-product of this reckless lending and property valuations.
I am not too sure of that, la_renter. The housing prices would suggest exactly what you are saying. But we just went to renew our lease, in a nice area in the hills of Chatsworth, and they dropped the increase by 50% before I even sat down. Right now, I am “reviewing” their offer and will get back to them.
I just negotiated my renewal lease and they didn’t bat an eye. I should have tried for lower…
David,
You make a good point, and I think we need to get this in our heads as well.
In our neighborhood (San Diego), I’ve seen rents go up by 40%, and they are renting within one or two weeks! I think too many bubble sitters are doing the “sell to rent” thing. With their pockets full of cash, they don’t understand how rents should reflect local wages. FBs are asking for rents which cover their expenses (or close to it). We do not need to pay their mortgages.
I think all prospective renters should offer to pay 6-12 months in advance (make sure they will not be going into foreclosure), with multi-year leases. By doing this, they should receive a discount (20% off???).
It’s one thing if purchase prices are too high, but rentals provide an affordable alternative. If rents go too high, better watch that CPI (and they better not change their calculations to weigh purchases more than rentals).
Let’s keep rental rates down as well as purchase prices!!!
NO, NONONONONONOOOO!
Cash up front for 6-12 mos rent just puts rent higher.
I went to a house here in SD that is a crap hole, but useful for my purpose. It rented 6 mos ago for $1000 and they had to evict. I offered to rent it for the 1k/mo and do the cleaning, hauling, and landscape clean-up. They had raised it $125 to 1125. I said “bite me” - it is still for rent.
The real estate market is sooooo far from being a buyer’s market. All these media reports are nothing - the only thing that matters is that sellers in the LA area are still asking for the sky. Wake me up when prices REALLY start falling.
True that.
Offer incentives
No, don’t offer incentives. Just drop the damn price. The supply of fools who will be won over by “incentives” is rapidly disappearing.
Well, what’s eight hundred thousand dollars, when you’re getting a free weekend at Disneyland?
you have to have suzanne research it !
takes research, often conducted by a real estate agent, to come up with a realistic asking price. after the fall RE agents will be in the dust bin of history
Funny how fast that commercial came and went, I wonder if the general public reacted to it the same way we did ?