If the $200K houses are not selling, that tells me that they are overpriced also. That is why it is so important to know what similar houses are selling for (not what the asking price is). My advice is to offer them 30% below the $200K price and see what there counter offer is. If you follow the news, you know we are in a recession. A recession that is predicted to be long and hard, if this is true home prices will fall even more. Also even when the recession is over, people's credit ratings will probably have taken a beating also, so it will be difficult for them to qualify for a loan. On another blog here a real estate agent predicted that the price of homes will fall to 1999 levels before the market bottoms out. On average, I agree with this prediction. We a suffering from a triple whammy: 1) Busting real estate bubble, 2) A bad recession 3) People soured on real estate or cannot get a loan.
Here's one techique to know what is a good price (where's the bottom). For my home, comparable homes built in 2001 were sold for around $350k. This was a year or two before the market started to explode. I feel comfortable that homes will not dip below that amount. You should see what your home would've sold for in 2001/2002 and if it's almost down that low, you will be safe. 2003-2004 prices would be cutting it close and 2005-2006 prices would be unrealistic to consider buying.
Now, as for how low you can go... It's more important to say how HIGH can YOU afford to go. When purchasing out home, we decided on what rental values were, what we needed in a house and what we were willing to pay per month regardless of market value. The following should help you make this decision.
What would that property rent for and what are the taxes? There is a simple calculation you should make to ensure that even if prices go lower, you will not be one of statistics that can't afford their homes.
Take the amount of the home, assume you will get a home loan for 100% of the value and for every $100k, multiple by $600 and that will be your approximate monthly cost + taxes. If the market rent is higher than that, then you have a good deal. If not, why bother BUYING, when renting would be more financially responsible. Don't buy into the "but you will build equity" speech. That's how people got into this mess. Would you rather spend $2000 in a home loan SLOWLY building equity (assuming prices remain stable) or $1,500 / mt on rent where you SAVE $500 (CASH equity) per month?
Example for what you are looking at. $250k value (let's assume that won't budge).
2.5 * $600 = $1500/mt
Taxes (assuming around 3%, which is high) = $7,400/mt = $600/mt
Insurance = $480/yr = $40/mt
Total Cost of ownership = $2,140 (Not including maintenance / repairs)
I don't include utilities since you pay that regardless of renting or owning.
So if the market rent for that home is MORE than $2,140, then go for it since you can always rent it for more than you're paying for it. If not, then you need to consider if it is worth the premium of OWNING vs. letting someone else be responsible for major repairs (roof, driveway, boiler, HVAC, etc.).
While you do get a "tax credit" for the loan interest and taxes, considering that you would be paying $24k/yr, since you're married, it would be only $13k in benefits since the standard deduction is ~$11k. The exception is if you have a lot of itemized deductions. From what I know, Florida has no income tax to deduct, so you would be limited to sales tax and very specific expenses for itemization. You also have to consider the tax bracket you are in. I will just ASSUME (since I have nothing to go by other than the price range of the home you are looking at) that your household income is around $60k/yr. At that rate, you are in the ~15% tax bracket. At MOST, you would save $320 in tax benefits. That would be only if you already have $11k in OTHER itemized deductions.
I frown upon using that tax credit to justify a purchase because if you decide to rent it out, you no longer get those tax benefits and you will end up paying more than what you're getting for rent.
I hope I was clear enough and this helps you make a decision. Whatever you do, I wish you and your wife have a happy life together no matter where you call home.
Rule number 1-- never love a house, it's not even alive, and there will be others that you will like. Wait another year, save another 20%. There'a about 120,000 houses/condos for sale in this area, and more coming. Make your offers extermely low. If no takers, on to the next one. Good Luck
Note: the cma is with distress sales
Isn't thats what you told everyone 5, 4, 3, 2, 1 year ago. Going by CMA is like asking for hottie from your highschool for a date 20 years later and expecting him/her to remain hot.
CMA is a wet dream for losers (sellers and realtors).
Only way to determine the price of property in Miami is to go back to 1999 - 2000 price level. Like it or not - that is the PRICE TODAY not what was in 2005-2007. Many got conned in believing in this CMA and ruined their lives, not many are going to get conned now.
Su realtor tiene q tener el sentido comun para saber cuando hay ofertas
hablando con el listing agent debe tratar de negociar lo mejor para usted
sisu realtor piensa en como sacar mas comision no lo puede hacer
esa es la parte del exito
I am little confused. Is the market so strong that the buyer has to beg the seller to sell the property? i thought the banks are in such a deep trouble that they are going out of business and asking the taxpayers to bail them out.
I have not seen a single REO property which does not have a realtor assigned by the bank.
Why that licensed realtor would not be interested in marketing the property and getting his / her commission quickly instead of spliting with another realtor?/
Please help me out to understand.
For Example I have a propertie with 309 days in the market 4000Sqft 5b 3car garage 2 storys asking price 409K, the bank reduced the price to 338k I send a Offer for 260K Cash I received a Counter offer for 332k; My client try to counteroffer inmediatly 270k I say wait one week ; Yo know what happend !!!! the bank put the property Asking price in 308K in one week 7 days I say To my client wait more; But I dont have the last word; Other person can buy this porpertie but this is my way, Im waiting for one week; this is my way You need to be very smart and Patient to get a good price for the client thast the way to make money
In this market, most sellable houses in Miami (REO) are not for sale but house without roof is for sale for over a milion dollars.
Go to county records, look up the owner (Bank) and send him a letter by certified mail with copy to your senator, Congress person and Governor Crist. Mail a copy to the realtor.
You may get the house.
THE AVERAGE TIME ITS BETWEEN 12 DAYS TO A MAX 1MONTH YOU NEED TO TELL TO THE CLOSING AGENT YOU ARE TO TRY TO CLOSE VERY FAST; BEFORE CLOSING DATE; WHEN I RECEIVED THE OFFER SIGNED FOR THE ASSET MANAGER I ALWAYS TRY SURVEY, APPRAISAL, HOME INSPECTION IN ONE DAY YOU HAVE THE ALL DATA IN THE NEXT THREE DAYS, THE REST ITS WAITING FOR THE LENDER BUT NOT MORE THANT 2 WEEKS; I HAVE PROBLEM WITH UTILITIES FOR HOME INSPECTION BUT YOU NEED TO WORK HARD IN ORDER TO BE SUCCESSFUL. SOME REALTORS SAY I DO MIRACLES
AND THE BEST PART MY CLIENTS START WITH EQUITY THE PRICE ITS ALWAYS 80% OF THE APPRAISAL "AVERAGE"
Jaime, the broker did not require an earnest money deposit because of the way they operate (weeks before returning calls, etc.) Many of the Bank owned homes around here won't require it because they know they won't respond in time. They do however require proof of funds, pre-qualifications, and a signed contract.
I didn't persue telling the bank about their agent/broker because I am a Realtor myself and I'm sure you know we have a "law" that we can't say negative things about specific agents/brokerages. I also looked at it as a gift from them since I saved another $45k. =) I considered sending a card saying thank you for saving me $45k w/ a fruit basket, but I reconsidered.... =P
Another thing is the requirement that the selling agent must return an acknowledgement that the bank received the offer or to present the offer in person has not been honored by more than a few agents around here. By law they must abide by those requests unless they have a specific written and signed agreement where the sellers require all offers to be negotiated by the agent. When you do submit that offer, have your agent put that clause in the contract as well as a seperate acknowledgement page requiring the bank officer to sign and return within 48 hours. Technically all offers must be presented within 24 hours (1 business day in NJ, varies by state). If either of those terms are not met, you have legal basis against that brokerage. It would be up to you to decide if it is worth persuing. Honestly, I would love for people to stand up for their rights so less of the newly licensed (joined because of the boom) and highly unscrupulous agents would be relieved of their licenses by the state. Many of these same agents are the ones that convinced buyers that they can make money because the market is going up. There are many guilty parties in this mess, but now the conservative savers can take advantage of the moment.
""""The selling agent chose the other offer because it was her client (both sides of the commission). There would be no other reason for it since we were the stronger candidate with a higher offer. You will experience this from certain agents who are getting desperate to squeeze every last dollar from every sale since the boom they helped create burst on them too. To be honest, I don't even think the bank was shown our offer since they didn't recognize the fact that we (the auction winners) were the highest offer they received during the regular MLS sales process. Also, not all excellent deal foreclosures are run down.""""
Did you check what bank it's the Owner????? Did you check if your offer was received in the Bank???
I have the same experience before with my own clients. My offer disappear never arrive
they are changing by the week.
Second problem, banks are being flooded with calls and offers on 'your' type properties.
They don't really have the staff to handle the huge loads.
Bottom line, falling in love with a shortsale home can be a rocky road.
Douglas Montgomery, Broker-Owner HomeNY Corp.
1. Hire an agent to represent you! An agent who doesn't show up in this market is not worth keeping!
2. How will you know the market has bottomed out? When the prices start to go up!
3. Make an infomred offer 10% +- below list and see what haapens.
4. Have a home inspection contingency and make sure the house is checked out top to bottom. Hire a professional inspectort that is either NASI or ASHI certified
Good luck it's a GREAT time to buy!
Charita King 562-276-8681
Buy foreclosures it is not ease; I have experience with reo in IndyMac, Countrywide, Wamu, Fannymae, Freddymac, each it's diferent, but normally only 4 firms in real estate in south florida has the listings, you need a real estate sales with experience or better who like to work hard.
Sorry my little English I can help you if you are in Dade, Broward or Palm Beach
Find an agent you can trust that will help you write an offer on the property. I know a couple of great agents in Broward County that I can refer you to if you like. Just let me know.
Check out my website for more information, free reports about buying real estate and for a free pre-approval.