“Buyers Bidding Under And Asking For The World”
The Morning Call reports from Pennsylvania. “The sellers of the 1,900-square-foot townhouse in Alburtis had agreed to leave the refrigerator. But their buyer, Lisa Gerancher, wanted the washer and dryer as well.”
“Had the transaction occurred a year ago, Gerancher might not have said anything. ‘They were willing to negotiate because they were moving to West Virginia and had already bought a new house,’ Gerancher says.”
“In recent months, the tide has turned. These days, says (realtor) Catherine Amant of Coldwell Banker Heritage Real Estate in South Whitehall, ‘buyers are bidding under and asking for the world.’”
“Don’t want to overpay? Have an agent do a full comparative market analysis for you, (realtor) Christopher Zajacek in Bethlehem says. ‘You really want to look at the market and what it has done in the last 45 days.’ Because some prices are changing, the shorter the timeframe for that analysis the better, Zajacek says.”
“As buyers read and hear stories about the housing market slowing, ‘they think that everything has switched in their favor,’ says Scott Schultz, an agent in Center Valley. So they try and negotiate $30,000 off a $300,000 house. The market is not so bad that the sellers can’t hold firm and say, ‘Let’s be realistic here.’ ‘The market is slower but it’s not stagnant. Ridiculously low offers still are being refused.’”
“Amant always recommends to her sellers that they at least consider every offer, even if it is low. ‘A lot of buyers in this market think they can offer $180,000 on a $200,000 house,’ she says. ‘But I tell my sellers, rather than reject it out right, let’s counter. Instead of saying, ‘God, they only offered $180,000,’ say, ‘We’ll counter with the full price.’ I always recommend to my people to counter because that leaves the door open and that’s what negotiations are all about.”
“Home prices in the region fell in November for the first time in more than two years, according to statistics from the Lehigh Valley Association of Realtors. The average cost of an existing home in Lehigh and Northampton counties was $208,000, a drop of 2 percent from November 2005.”
“Buyers, on the other hand, have their pick of properties, allowing them to make offers that are below the listing price.”
“The number of homes sold has fallen six consecutive months. In November, the number of homes sold fell 22 percent, compared to the same month last year. And the glut of homes on the market is slowing the pace of sales. The number of pending sales — a measure of future buying activity, fell 25 percent. It was the lowest number of pending sales contracts since December 2003.”
Seller: 200K
Buyer: 180K
Seller: counter with full price, 200K
Buyer: See ya!
No kidding… Realtors must not be very hungry for sales these days with such great tactics.
That tactic is the same one used to control prices during the ride up. Back in late 2003, an agent that was supposed to be acting on my behalf as a “Buyer’s Agent” kept telling me that it was insulting to the Seller if I offered less than the asking price. Eventually, I fired her, and ended up getting a house at “less than the asking price.”
I agree. Poor advice to counter with full price, especially in this market, imo. Shows no desire to negotiate.
Why even respond with a see ya? Just let the counter expire. You should be working from a list of 10 houses minimum.
exactly! Don’t even give these morons the courtesy of a “no thanks”. Just move on down the list and leave the seller and his realtor sitting with their thumbs up their ass (like you found them).
Being somewhat insulted by the counter, I’d counter with an even lower offer, say $175,000…
After all the market is dropping daily!
My thoughts exactly, but only if I really wanted the house!! If I did not want to waste time I’d just walk down the street and go to the developer with tons of inventory and s/he would give me that price and throw in upgrades, cheap financing and a moving allowance!!!
Funny, when I grew up an insult was something like “your mama wears Army boots”, or “you’re fat”. Since when is a difference of opinion on the rapidly changing value of an inanimate object an “insult”. Have we now corrupted that word too?
No, ‘the seller will be insulted,’ is a ploy by the real estate people to get you to offer more, in hopes of bettering the chances of a deal.
You in turn are supposed to readily do whatever is necessary to avoid the dreaded insult to the seller.
Keep in mind the real estate people don’t want you ever communicating directly with the seller to see if they are truely insulted, or if they are nice people you can actually talk with. To do so is to give up account control, something the real estate professionals need to reinforce the vital necessity of their presence.
Lord forbid if you should insult the dealer, even worse if you should come face to face with those terribly sensitive forces.
You should be working from a list of 10 houses minimum.
So true. And for the next few years, that will be easy.
I think I would just laugh at a full price counter offer. I wouldn’t take the seller seriously.
However, you would see me at their first open house 90+ days after the deal fell through. I wouldn’t say a thing… just would walk around and smile.
Neil
“No, ‘the seller will be insulted,’ is a ploy by the real estate people to get you to offer more, in hopes of bettering the chances of a deal.”
Good point - I kinda knew it, but forgot to note it. The tricks the brokers use are despicable (especially the fake multiple bids)
I actually do have to agree with your original post, Got Rocks. What I see hear is a lot of emotion about the upcoming purchase from the buyers’ perspective. Betta ditch that when time comes to make the purchase. Not that the sellers aren’t in a position to break but if you’re dealing with that much emotion going into it you can still make plenty of mistakes.
see hear s/b see here
Always leave them your number. This ain’t about making nice-nice.
Seller: You offered $180k 3 months ago, still interested?
Buyer: Sure, but I’m bidding on multiple homes right now. I think I could go $165,000
Seller: Uhhhhhh……
I love it…..They call you up and you get to insult them a second time!
This happened to my parents in the late 70s. They got their now-appraised-at-$425K house for a song back then. Sellers waited about 6 months before revisiting my folks’ offer. Dad lowered it. Sellers caved.
Backstage — personally, I think that is exactly the right strategy for this market. The reply is polite and clear.
As for the Amants’ nutty “counter” to a 90%-of-asking price offer, in today’s market I would have leaped on that, whether or not it covered my mortgage. Or I might well end up like the Barretts in the Arizona thread.
Funny how offering 10% off the asking price is considered “ridiculous.” I’m in the Washington, DC area and finally in a position in life where i -could- buy a place for myself. My amateur opinion is that there’s still another 20% in a LOT of homes that need to come off before I even start dipping my toes in the water for the properties I like.
If i’m shopping for a car, you can darn well know that i’m starting my negotiations at well under 10% of the listing price.
Since November i’ve been following some places that I like and some that I just want to track out of curiousity. Some of them have dropped about 100k without any movement and have remained on the market for hundreds of days.
Right. I would assume most sellers have 10% of fluff ina price even in normal markets. Keep drawing those lines in the sand realtors!
Absolutely. Around here, that has generally been the unwritten rule. NOBODY pays full price, everything is bought at a “discount”.
You can best estimate the “fluff” by going to the on-line property records - that will give you year of last sale and sometimes price. Year of sale is all you really need to have a sense of the seller’s “negotiation window.” I know, I know, a lot of people have extracted equity, but I wouldn’t waste my time with a 2004 or beyond “last sale” house. In our area, the seller would have to ready, willing and able to bring big bucks to the table in order to dump the house.
I’d go look for a seller that’s sat tight for at least five years - he can give you a nice discount and still make some money - everybody’s happy. Good luck and be careful out there!
There is always 6% fluff in the form of the buyer/seller agents’ commission. They say the seller pays the commission, but in reality the buyer pays both, its priced into the home. Just because its in the seller’s column of the HUD-1 does not mean the seller is paying it. Always demand 6% off, and when they whine just say you know the home is priced to include commissions and you refuse to pay the parasites, especially if you’re not represented by an agent.
You need to tack on more now to compensate for the downside risk that comes with all homes in the current market.
Realtors will often discount their commissions when a deal is close but stuck. If a chain reaction of sales is hinging on $3000 between parties, I’ve seen one or both realtors up the difference.
ante up the difference (5am sorry)
LOL, I almost fell off my chair and spilled my coffee reading this. I’ve yet to see a realtwhore ever do anything that would impact negatively on their bottom line in any way shape or form. The agents will collude and breach their duties to their clients and disclose information about the positions the buyers/sellers have and then work/manipulate them to get their up/down positions out to make the deal happen so THEY can cash in on their commissions. They will never give up their own commissions, they are parasites and gatekeepers/toll collecting trolls that bring only negative value to the transaction. I will never use an agent again, FSBO is the only way to go.
They can keep refusing 10% off the asking price right up until foreclosure day, so far as I am concerned…
It is also important to bear in mind that used home sellers (and very often the Realtors who help them) are amateurs when it comes to pricing a home. In a rapidly declining market featuring Realtors who are actively engaged in hiding price information, they may have no clue about where the actual market value currently stands, although a good hint could be obtained (in principle) by looking at recent auction and REO sales results. For an example, in my hood (92127), I have noticed the low end of recent sales have ranged from $326-$336 / sq ft, with a couple of outliers on the low end priced ridiculously low ($244 and $303 / sq ft). But there are also those whose wishing price exceeds $500 / sq ft. Obviously a 10% discount off list means something entirely different in the latter case than if the home is initially priced to sell.
Right , in spite of the TV show ,”What Is My House Worth “, realtors are not to be trusted in pricing homes because on large scale they have proven to be anything but self-serving .
Realtors can show you any comps they want ,so you have to do your own homework . If they show a buyer comps from 5 months ago they could be misleading them . Anything other than a 1 week analysis is outdated IMO.
While I don’t think it is a good time to buy because we need to see how the speculators and foreclosures are going to affect the market , I guess one could write a lowball to account for the declining market risk . What this % risk of decline figure is would be up to debate .
excuse me - realtors have proven to be self-serving .
You bet.
Sometimes they will under-price a home to get a quick sale (and comission). Other times they will over-price to get the most out of the sale.
But when homes are grossly over-priced, it’s usually the work of the seller. The agent won’t do their best work, because it’s pretty much a lost cause.
I was taught to always start at 20% off asking price and go from there.
I found two comps for $1m+ homes on the same street in my zip cold sold in June and August 2006, and given that they were in a McMansion tract home development, they were likely of the same floor plan. Anyway, the August price was over $200K below the June price, suggesting rapid downard price momentum at the high end. If sellers are still imagining they will get a 10% increase over last summer’s comps while prices are dropping, it very quickly becomes clear why the average time to sell exceeds 6 mos…
coldcode
There goes my Freudian slip again — it is really freezing in SD today!
Global warming but local freezing.
Its so messed up that every part of coastal CA it costs 1mill+ for a decent house. Anything less is small/old/ghetto or all three.
Half the people I know live in homes ‘worth’ over 1 mill. Just regular people. They all paid like 300-400 for these things 5+ years ago. It used to be 5 years ago that price point was for doctors/lawyers/movie stars/CEO. Anyway its beat to death but I still can’t fathom this rapid asset inflation.
Home pricing, as you illustrate, is all over the place right now. There are a number of factors influencing asking prices. From the experience of the agent, to the original purchase price of the house, HELOC’s, homeowner greed, as well as other motivating factors like job transfer, divorce, etc. It is most certainly up to the buyer, working with the best realtor possible (if they use one), to identify the most appropriately priced homes, amid the sea of overpriced POS’s. For someone who has done their homework on the area, it is fairly easy. For those going into it blindly, they deserve what they get.
a few years ago, when inventory started to accumulate on the Dutch housing market, it was quite normal to start negotiating for the cheaper homes at 10% below asking, and for more expensive homes (over 450K euro or so) at 20-30% below asking price. Somes homes that I tracked eventually sold at more than 30% discount. At that time the average home price was not even falling, it proved to be just a minor bump in the road and most of the sellers probably still made money on their sale because of the prior price runups. Current prices are significantly higher again because of lower rates and more crazy lending; when our bubble finally tops I think asking 50% off will be a good start.
Right , what the seller is asking has no bearing on what should be offered in this day and age . What the recent comps and foreclosures sold for has more bearing ,but like I said ,I would want a risk of decline discount off the house . I guess it also depends on the area that your dealing in .
Regarding realtors , I’m sure there are good ones out there ,but in any business transaction I don’t give blind trust to anyone . In fact ,when I listed my property in 2005 I went out and double checked the realtors suggestion on asking price .As it turned out the realtors gave me outdated comps at the time . I never told these realtor people that I had been in the business and I played dumb .
As it turned out ,I had to write the counter offer because these clowns were to dumb and they were a high income real estate team . These realtors weren’t all bad however and they did some good thing in the course of that listing .The realtor that brought the buyer was a new agent who never performed on her paperwork timely ,and her offer was designed to reject because it had to many holes in it .
I gave the buyer alot of time to inspect the property and do anything they wanted to insure they wanted to buy the property . At some point a buyer wanted to give me 20k more to push out the current buyer . I told them that I couldn’t do it because these people had performed in good faith so far and I just couldnt do it to them . Sometimes going for more money just isn’t worth it . At the time I sold I didn’t have knowledge of the bubble or how the lending had gotten out of whack ,so I was just going on market comps .
I don’t think any recent comps are really useful. I think to determine future prices, we have to look to the past, and guesstimate where we’re going to end up on the other side of the curve.
Minus 50% will be a fantastic time to buy. But you can start at minus 40%.
So they try and negotiate $30,000 off a $300,000 house. The market is not so bad that the sellers can’t hold firm and say, ‘Let’s be realistic here.’ ‘The market is slower but it’s not stagnant. Ridiculously low offers still are being refused.’
Since when is offering 10% below asking price “ridiculous”? I remember a time when buyers were expected to offer 90% of asking price. What a game this whole thing is, has been, continues to and will likely always be.
Probably depends if the seller is serious or not. I very much doubt we will see serious price drops until enough distressed properties are forced onto the market, and then these may be the only properties trading for several years, as those who don’t have to sell hunker down for the long winter to follow.
…Which is why I think it is better to buy a new house that goes into the ground in 2007. Cheaper materials, cheaper land, cheaper labor and more moderate builder profit margin. Used house owners’ egos and mortgage balances, by and large, will not be able to acknowledge and compete with that.
“I remember a time when buyers were expected to offer 90% of asking price.”
Exactly what I was thinking. In pre-bubble days, 10% below asking was standard. So many of the brokers out there probaly weren’t around then. It’s a simple return to negotiation. What’s been happening the last few years was abnormal, negotiation on price is the norm. The concept of insulting the seller is a bunch of bull designed to intemidate buyers.
I love to insult sellers. I would be disappointed if I didn’t insult the seller. That would mean I am paying too much
If you must buy now, offer 70 percent or less, or you’ll be underwater two years from now … suffering a serious case of buyer’s remorse. That’s what happened to us in 1992, when we thought the market was at the bottom. Who cares what the sellers think. You’ll never see them again … unless they return to your neighborhood to buy a better house than you for less money, laughing all the way to the bank.
Keep in mind the sellers prices are all over the place. In rare cases full price might be a great deal. In others only 60% of ‘wish price’ is its real value.
Some people start with a price and stick to it for a year. Others star way high then trim off 50k a month. Every situation must be analyzed.
“Amant always recommends to her sellers that they at least consider every offer, even if it is low. ‘A lot of buyers in this market think they can offer $180,000 on a $200,000 house,’ she says. ‘But I tell my sellers, rather than reject it out right, let’s counter. Instead of saying, ‘God, they only offered $180,000,’ say, ‘We’ll counter with the full price.’ I always recommend to my people to counter because that leaves the door open and that’s what negotiations are all about.”
I would like to hit this Realtor drone with a granite counter.
How is showing that the price will not be negotiated down, by countering full price, somehow to be construed as “leaving the door open to negotiation”? What a moron.
haha, yeah, that’s idiotic.
Obviously they the seller and realtor still think the market is going up!
“Since when is offering 10% below asking price “ridiculous”?”
It could only be considered ridiculous if the recent comps were selling for 20-30% off, in which case the 10% would be too generous an offer. This agent is quite obviously a myopic newbie who is incapable of understanding the market. It is only a matter of time until he is back to uttering “want cheese on that?”
Buyers in bubble areas should begin negotiations with an offer of 2001 prices…at most early 2003 prices, which in my area of interest in NoVA means offering 50–60% off asking prices.
If Realtors think 10% off is ridiculous, then make it clear to them buyers will have nothing to do with them. Some realtors here have privately told me that in this market, an offer of 30% off listed asking price for some land lots is not unreasonable; they are deperate to score sales that they say they would be happy to write that 30% offer.
Has anyone here noticed the fact that while land prices have fallen by a lot, even 50% from the peak in 2005, house prices haven’t yet fallen by that much?
“Has anyone here noticed the fact that while land prices have fallen by a lot, even 50% from the peak in 2005, house prices haven’t yet fallen by that much?”
Wait till the builders finish clearing out the old inventory. The big builders will negotiate cheaper land prices and keep their prices on new homes below the resell market. With all the inventory out there, they have to be agreesive with pricing to lure any potential buyers out there. It’s now become dog eat dog for the builders.
wow, that offer has gone plaid!
“The sellers of the 1,900-square-foot townhouse in Alburtis had agreed to leave the refrigerator. But their buyer, Lisa Gerancher, wanted the washer and dryer as well.”
I will only buy if the seller contractually agrees to come back and feed the squirrels.
Here is the “feed the squirrels” meme again. Is this the correct context?
Inquiring minds want to know.
A sweet house located at 54 Star Lake, Pensacola, Florida, 32507 looks like a low ball success story. I tried to dig up the previous PensacolaMLS listing on Google but couldn’t find it.
The house contains 4,400 sqf. of space with all the bells and whistles and is located on a 0.5 acre lot directly on protected water within walking distance of the Pensacola Country Club. The house was listed for almost a year at $1.4 million and sold this past November for an even $1 million. The house previously sold for $635,000 in October of 2000.
Great. Let’s buy two.
… so the previous owner made more than 50% nominal return on his original ‘investment’; even without being able to live there that is a nice return for a period of 6 years.
“I always recommend to my people to counter because that leaves the door open and that’s what negotiations are all about.”
And the buyers can just as easily walk down the block to the next “for sale” sign. That’s what negotiations are all about.
I’m just a recent lurker to this blog (and love it). I would like to buy eventually but obviously the prices in my area (DC) are a bit absurd. I’d like to hear some comments on my, perhaps overly simplified approach to trying to time the market.
Right now I live inside the beltway and rent a nice, 2BR cottage-style home with a nice big yard for my dog. My rent is $1475/mo. I’m really looking for something similar in size (and with a yard) whether its a small house or townhouse for about the same mortgage payment (give or take a couple hundred), after down payment.
I don’t quite know how to “time the bottom” of a market, but i’m really using my current lifestyle as the base and looking back to around 2003 - 2004ish prices as what I think is the right level to pay.
For example, one of the places ive been watching has been on the market for over a hundred days listed at 375k. In 2002 it was assessed at 287k, in 2005 it was assessed at 287k, in 2006 it was 353k!
If I could get this home for about 290-300k I think it would be a good deal. I’m open for some general “buying” strategies if anyone out there wants to share what they’re thinking. Thanks.
Geeah, you are “inside the beltway,” and these are the prevailing prices? You must live underneath the on-ramp to the inner loop in PG County or something.
Seriously though, are you using the term “assessed” as in, “tax assessment?” Those numbers are meaningless - most jurisdictions low ball the tax assessments to mollify the voters but make up for it by raising the rate of taxation. But I digress…
You have really answered your own question - wait until the montly cost of owning the house you want is more or less in line with its monthly rental value. If your hood is anything like mine, that is going to take a while - even with the recent declines, it is still roughly twice as much money every month to be an owner. Whoopedy-do for them - I rent.
In the last bust (1990’s) it became far cheaper to BUY a place than it was to rent - people were terrified to buy and the banks threw mortgages out the door like they were man hole covers. Finding the absolute bottom will be a matter of pure, dumb, luck. When rents and (conventional) mortgage, taxes and insurance costs are close to rental parity there is no harm at all of buying a yard for the dog.
I rent in Falls Church right now. Maybe the post was a bit too vague.
I’ve been a renter inside the beltway (all but one year) for the past 10 years.
Where I rent now is a middle-class neighborhood with mostly owners who have lived here for a long time. There are a couple houses in my neighborhood selling from 450-500k. My rent is 1475. It’s small, but a great location for me. I’m about a mile from a metro station and it’s a good neighborhood.
The places i’m looking at are mostly townhouses both in and just outside the beltway. Reston is about as far out as i’m willing to go.
Don’t worry 2003 prices will be here soon enough!!
It will also benefit you to begin thinking like one of Ben’s bloggers:
“There are a couple houses in my neighborhood selling from 450-500k.”
Unless those are recent closed sales, the realities is,
“There are a couple houses in my neighborhood wishing for 450-500k.”
Credit to Robert Cote for coining “wishing prices,” quite a while back.
reality
I might be wrong, but when the war dies down, we stop deficit spending and actually start paying down the deficit then there should be way less government parasites living in DC. Dont they have the trim the budget eventually? Fed Govt cannot increase spending forever, so wait for the govt to have layoffs/hiring freezes, then you might find a better time to buy.
Meantime adopt the attitude you will rent forever. I’m doing it - it will help to lowball. Only buy if it is better situation than renting.
“…when the war dies down, we stop deficit spending and actually start paying down the deficit then there should be way less government parasites living in DC. Dont they have the trim the budget eventually?”
Crash — I am afraid that I’ll be on the other side of the grass long before any of those happen. I agree with you about the continued renting — it is difficult when you have just 50% of the vote, but decent math usually prevails, particularly when the differences/losses are striking. My coup d’purchase usually ends up being the forecast amount of loss should prices erode further.
Nah, Chip, you’ll still be here. Tax revenues are going to plummet this year. I figure all levels of government will be in severe budget crises by 2008.
At current lending rates… assuming you wanted your morgage payment to be similar to your current rental rate… you should probably be looking at around a $220k to $240k total morgage. If you cold put the difference up for the downpayment… you’d be in the ballpark.
However, I am ignoring any local taxes in the above.
I don’t have any answers, we are also trying to figure out when to begin seriously looking, I do think we are going to wait until foreclosure activity is stronger, bank owned properties don’t have all the owner sentiment etc and I think will be a better deal, I also would not even THINK of buying right now if we weren’t planning on being here for 10 years or more.
You can;t time the market. It’s unknown. However, the old rules still apply:
1. Get the house you want
2. Pay 2.5 to 3 times your yearly gross (or less)
3. Figure payments on fixed 30 year (or 15 year) loan
4. Don’t plan to move until at least 2012
Alternately, if you find a home you can purchase with PITI slightly above what you are paying for rent, grab it.
Well that’s a lot of good advice for Geeha. If Falls Church is what you’re after, I wouldn’t touch it with a barge pole just yet. The key here is patience, patience, patience.
The fundamentals got way out of whack. When they get back into line, then is the time to buy.
The key, certainly is patience. But you gotta ask patience for what? In any negotiation you need to set your boundaries, upper and lower. If it’s below your lower margin, great. If it’s above the upper margin, move along. More bargains will be on the way.
SKIP THE EMOTIONS! These are what got us into this mess, and they will screw up any well founded plan.
Pay 2.5 times your yearly gross, not 3x… the old rules have failed track the increasing bite taxes take out of your gross
Advice to would-be buyers: WAIT!
How long? SImple. Until the REO stack up, and they will. It might be as soon as Q3 but more likely Q4. ‘08 and you’ll have a selection list that you won’t be able to cover in 1 day doing drive-bys at 60MPH.
“you’ll have a selection list that you won’t be able to cover in 1 day doing drive-bys at 60MPH”
This is very easily dealt with using ziprealty.com. You simply select on a few zip codes you are interested in, enter minimum nos of beds, baths, and sq ft to narrow the search, then rank the homes on sq ft. You can then eyeball the prices to figure out who is planning to sell quickly and who was smoking crack when they thought up their wishing price. The spread in quality-adjusted wishing prices is almost unbelievable…
Here, here Stucco. I am dumbfounded myself by this phenomenon. Just came home from a walk - a neighboring block has three houses up for sale - nearly identical. One went under contract - the ask was 399K - the same damn house across the street (OK, maybe the floors are in better shape?) is still for sale - $659,000. I just shake my head and keep moving…
Does it have a Koi pond?
I remember 1997, I was looking for a place to rent. I ended up with a friend of mine (realtor) and the reo’s and huds were on every corner. I had no clue. I ended up buying a condo for 68k, payment 550 a month, and sold for 249 recently. (should have held on, they are now selling for 300k, but had a meth addict next door, couldn’t take the stress) So I am waiting for it to happen again. I guess last time I wasn’t paying attention so didn’t notice if it took this long, but now its like watching water boil….
It’s a slooowwww process, but you did the right thing. Go take piano lessons or something for a year or so. The movie ends the same way every time, no matter what they say.
so true
Exactly right. DL, LAY etc can call the bottom as many times as they like and continue to claim they’re surprised, even though they’re not. The truth is, they would be shocked if their nonsense forecasts pursuaded anyone to jump off the fence. Inertia is almost unstoppable on the way down. This time we can remove the almost. Gonna crush the fundamentals on the way down….
who has the worst neighbors: homeowners or renters
Comment by AZ_BubblePopper,
you’ll have a selection list that you won’t be able to cover in 1 day doing drive-bys at 60MPH. VERY GOOD! FUNNY FUNNY FUNNY
This reminds me of a recent article in the Fresno Bee, saying that the recent correction in the housing market is over given steadily declining inventory and a much better-than=expected holiday season of home sales. Seems like the RE shrills are attempting anything to jump start the market. Sad part is, there are plenty of people who are on the sidelines and hearing this garbage will make them more eager to buy. I keep hoping for higher gas prices because this seems to always be the straw that breaks the camel’s back: people don’t seem to care if the price of bread or OJ doubles, or even if houses go up three fold in five years, but if you ratchet up the price of gas a few dimes, everyone suddenly feels much poorer and reduces spending. Gas at $5/gal would actually be good: get a few more of those ugly pick ups and RVs off the road.
Doubt if they will make enough people eager to buy sufficiently to beat the trend. After all, the downturn occured while they were saying there would be no downturn.
They overestimate their own ability to control the trend.
’ says Scott Schultz, an agent in Center Valley. So they try and negotiate $30,000 off a $300,000 house. The market is not so bad that the sellers can’t hold firm and say, ‘Let’s be realistic here.’ ‘The market is slower but it’s not stagnant. Ridiculously low offers still are being refused.’”
Yes, let us be REALISTIC HERE, was it realistic when the prices of homes were going up 30,000 YOY?
What the beauty in all of this is, simply put we have time to wait and the sellers in over their greedy heads do not.
This is good…this will cause even more animosity between buyers and sellers and make things worse. GOOD I say..let it get so bad that the floor drops out from these bastards.
Most buyers can wait.
Most sellers can’t.
Gee, I wonder how all this is going to end if houses don’t start selling again?
The agent that says the 10% lowball is an idiot. How do I know, pray tell? Because my agent was an idiot that persuaded me to turn down a lowball for the “fall selling season”. I assumed he meant the season and not the fall of the housing bubble but instead circumstances turned out that it was the latter. FMV (bubbulicious mind you) was 412k. I listed for 399k and I was willing to go down to about 390k. Lowballer was at 375k (with all appliances mind you) and firm. I declined. The Open houses were a complete disaster, virtually unattended and people finding every reason the could to not even making an offer. Yet the home was immaculate & in excellent condition. So the pined about the view and the taxes an other things I had no control over. I got pushed up against the wall of reality and slashed the price to 350k to get the next buyer. Thus if I had taken the 375k offer I would have not gone through another 2 months of heart ache and walked away with 20-25k more in my pocket.
Take the damn 10% lawball offers, if you don’t in a down market you will regret it both sooner and later. I am financially crippled because of my stupidity and being niave to think the realtwhore knew what he was doing. The next offer, if it comes, will be even lower and you will have made a couple more months in mortgage payments, thus making that 10% lowball look like an excellent offer and you like an idiot.
Oh, the 375k low ball offeror bought a spec home from a developer. The developer slashed the price from 420k to 375k plus threw in some extras, cheap financing etc.
My agent still got his commission less a tiny fraction less due to the difference of the list price of 399k to the sale price of 350k. Hence there is no incentive for them to insure you get the best price available because they still get almost the same pay despite incompetent performance.
Joe, I am sorry, really. There’s an old adage that rings true here - “The first offer is usually the best offer.”
That burns me. Someone wanting 10% off and the realtor telling the seller to counter with full asking price. I have been so turned off by this type of realtor and seller behavior. The more I have read here on this blog, the more determined I am to wait or do some extreeme lowballing. The sellers if they knew the housing situation as a whole would be telling the realtor off.
On another note, I looked into foreclosures. There was a house in the neighborhood I was interested in. I found that anyone that has a second mortgage and/or HELOC are possible in for some interesting tax scenerios depending on the situation if a short sale is attempted. Ouch. The house goeth to the bank and the tax man cometh. Makes me want to change the coined term house ponzai scheme to really a tax ponzai scheme. Wait until the local governments don’t get their anticipated cut. Never have I been so happy to not be tied to a mortgage. Bought in Nov 04, Sold in March 06 for a fair market price and moved to a rental 2 blocks away, just by accident. Job was unstable and I didn’t want to take a chance but wanted my son in the same elementary school. Everyone thought I was crazy to make a move before my situation changed for the better or worse. 9 months later and all of the competing overpriced homes are still for sale in my old neighborhood, 2 blocks away. From where I am now, I have the house across the street starting to go into forclosure and the house next to me for sale, both put on the market in the past week. There are 3 bank owned properties on this street. This is out of twenty houses. 5/20 = 25% Bet you guess I am living in CA, FL or NV. Nada. Try Olathe, Kansas (Kansas City) Yearly price increases here have been steady and reasonable, not like CA, FL or NV. I can not even imagine the reality of CA FL AND NV right now. Anyone care to share their neighborhood stats?
Housing tax were written on opposite day in Congress.
If you gain a profit - is tax free!
If you sell at a loss(debt forgiven) its taxable like it was profit!
Thank you big government bizarro world.
LOL ,,,,The bank is going to take the amount that they forgive the FB or the amount they lose off their taxes ,so the gain goes to the party that was forgiven debt . If the person that borrowed took out a equity loan and spent the money and than were later foreclosed on ,you could say they already benefited from their gain that they ended up paying taxes on
. If you got a FB in at 100% financing and the lender ends up losing 100k that FB has to pay on the loss even when the FB didn’t get the benefit of any money . Mistakes can be costly .
There are some buyers that still paying full price but the majority of them are not. Asking 10% off from the selling price is not far from ridiculous. Soon it will be norm.
http://www.oahure.com/CMA.php?&ListStatus4=SOLD&ClosedDateMin=2007-01-01&ClosedDateMax=2007-12-31&MyOrderBy=3&MyPropertyType=1
The seller is selling the right to buy this house?
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&Item=140073903236&Category=
Yep. I’m from Pittsburgh and Wilkinsburg is one of its suburbs. You could not pay me to live there. It use to be a very nice area when it was predominately a Greek immigrant neighborhood, but now its mostly just a ‘hood so I have no idea why anyone would pay for the right to buy the home (an option basically).
It looks like fee advoidance to me. Instead of selling the house for 30K and paying ebay fees on that ($100 for a standard 10 day listing), he sells the ‘right’ to buy it and pays fees on the auction price for that right (currently $30.95).
I think the seller gets to have it both ways. He saves some fees and it is an assignment of contract — if he doesn’t dump it, he probably can weasel out of the closing.
In all these press relea…. i mean articles that quote enthusiastic Realtors, they would cite how long that person had been in the field. I’d love to see the % that are 3 years and under.
At least the quotes in articles are a nice memento for them to frame as they go back to school for their next job.
It disturbs me to see people in here take a fiendish delight at “insulting the sellers.” Knife-twisting is neither necessary nor desirable in this or any market. Making an offer you know won’t be accepted just to torque the seller’s nuts is infantile, in my book. I intend to bide my time, until it is crystal clear to everyone - sellers, buyers, and realtors - that if they can find a rare creditworthy buyer, they better price their house to sell if they want to close the deal. I plan on treating all parties involved in the transaction with dignity, courtesy, and to a point, sympathy. That said, I will be firm in communicating my understanding of market realities, i.e. I cannot afford to overpay for a house, and I’ll have plenty to choose from.
I’m sure the seller will be listening to your moral approach to all this as he’s lubing you up with vaseline.
No one can afford to overpay for a house but that’s what’s been keeping everyone in the REIC employed the last couple of years. So being that its become the norm even your “enlightened” approach will be viewed as an insult.
I was a nice guy until I got raped by the REIC, now I know how the game is played and I will extract out of the next GF all the wealth that was taken from me. You must lowball & you must hammer them to pay for everything, otherwise you will be left holding the bag in terms of higher loan costs, higher ownership costs & taking a bath when you try to sell the place. Its the state of nature and you have to look out for #1 and that includes not trusting anyone else in the transaction and playing the game the REIC has set up a monopoly on to include not giving a damn about insulting the other parties involved. Nice guys finish last in REIC and put a lexus in the Brokers’ driveways while you struggle with the consequences of the transaction.