Home Buying in 33138>Question Details

The Boyz, Both Buyer and Seller in 94115

I am currently looking at several properties in Miami Shores, Florida 33138 for purchase. During my search I

Asked by The Boyz, 94115 Wed May 7, 2008

have found the majority of the listings to have an unrealistic list price. It seems they are in a time warp of days long gone for the housing market in South Florida. Properties that were purchased in the late 90's for 200K with minor renovations done over the past decade which were under 100k being offered in the mid 600K range. Not to mention DOM over 365 . Another property was purchased in 2004 for under 500K with what seems to be a 150K renovation currently with a list of 699K. This listing has been on the market since late 2006 starting with a whopping 1.1M price tag. Both of these listings comps suggest their selling price to be considerably less. Any suggestions of how to calculate a realistic offer reflecting todays market that will not be considered so off the wall but as reality to these sellers and their agents?

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Tobias Kaiser, Cips’ answer
You are correct in your observation that many sellers, especially a lot of the FSBOs (sorry folks, but it's true), have not woken up to reality yet.

A market is determined by the selling prices, so in every cma or comp calculation, look at the sold prices and also what has expired. You may not have access to that data if you are a lay-person, but a friendly a realtor will help you.

All the best,

Tobias Kaiser, MS, CIPS
Greater Fort Lauderdale Real Estate Broker + Consultant
Certified International Property Specialist
0 votes Thank Flag Link Wed May 7, 2008
Showing you comps is a wet dream. If someone paid $100 k for a house does not mean you have to pay $110 k a month later. I hope they dont higher realtors to sell gas.

Till about 2000 market was in a normal mode. So to get to fair price apply 3- 3.5% appreciation since then . You can find the sales in the region at that time. After these excesses, you may be correct to pay the 1999 -2000 prices without appreciation. That's how the asset pricing works. I have seen alleged reduction in prices up to 40-50% but when you do the homework - you find that the seller purchased the house for the asking price back in 2005- 2006. So he is saying to you that please take my problem and make it yours! Also - given the credit market conditions - even you do not need mortgage, put as many contingencies including purchase contingent upon obtaining mortgage at max X.X%. If a bank goes bellyup after you sign the contract , we could have severe financial problems in this country, which may require you to change your mind about the purchase. This is a business no one cared about being fair to the buyer in last 6 years so do not fall for croc tears. Be firm
3 votes Thank Flag Link Sat May 17, 2008
John you and Ms make a cute couple.
I must admit I also have read Ms's other posts. While once in a while there is a glimmer of truth for the most part you answer like most other real estate mogouls that have put themselves out there and made a few deals. You comment on regional statistics like the media saying all real estate is the same way ignoring the regional dynamics.
I applaud you if you have done enough research to feel comfortable handling all the details of a transaction.
The Boyz,
Unfortunately what you have to deal with sometimes is not always the agent but the owner's. As agents we may do a market analysis and give a number to the owner but, ultimately we are bound by law to carry out the wishes of our clients. If we tell them the home is worth 500K but they want to list for 600K because someone sold a home in the neighborhood for that regardless of the value. If I were you offer a realistic price. If they do not take it they might after a year or two on the market.
1 vote Thank Flag Link Sat May 17, 2008
The Boyz,
In the current real estate market a serious buyer should not place too much stock in the seller's "asking Price." Your understanding is not unique to the Miami market and is common through out the industry of today. Many sellers are in "denial."
There are several things we would recommend. First, identify the criteria for your ideal property with less attention to the asking pice. Obviously, you need to be in the ball park with the seller but do not buy into their false world. Next do your homework. Preview homes that appeal to you and identify those that you find acceptable. Once you have established a target group of properties that meet your expectations, it is critical to do some research to determine, period of ownership, amount paid when seller purchased it, and comps for recent sales. If there are no recent sales, this is when you have the opportunity to create your own market level. By knowing what the seller has invested and what the market will bear should provide the insight to begin negotiating.

You are looking for the sellers with a high level of motivation to sell. To accomplish this, it is important to present yourself as a serious and motivated buyer even though your will be far below their asking price. To accomplish this, it is important to write you offers with the following in mind:
1. you are a cash or pre approved buyer
2. you are looking for a quick closing-30 days or less
3. you should offer a significant deposit
4. don't clutter the contract with contingencies, keep it as clean as possible
Also of great importance is to imclude a cover letter with you offer that with out going into detail illustrates you as both a serious and informed buyer. One that has done their homework and is knowledgable of the local market. Also make it clear that you have identified a number of homes you are targeting within your price limitation. Since all of these homes are desirable you are prepared to move on the the next possibility without hesitation.
Do not be distracted by the asking price, find a good agent that can assist you with the research and is willing to help you through this process. It's a process that works if you keep it real and are willing to invest the time.

Feel free to contact us with additional questions.

Best of luck,
The "Eckler Team"
Century 21 Almar and Associates
Venice, Fl 34285
1 vote Thank Flag Link Wed May 7, 2008
I would recomend to shift your focus, rather than consider or focus on the houses that are significanly over price concentrate on the ones priced correctly. knowing the market and being prepared to make your choice is important, understanding flow of transaction and recieving a buyers consultation is crucial. We just had a house on the East side of Miami Shores in our inventory, it was listed for approx. 5-7 days prior to recieving offers. it was over 2,000 sq ft on a large lot and it was priced at the low 300' - we take listings only when owners co-operate with us and price correctly, this creates a situation that excluding contract faliures most of our listings go into contrat within the first 20 days on market. In a merket with a glutt of homes that are over priced when a property hits the market at a price level in which homes actually sell there is bound to be much interest i will only re-enforce again that working with an agent that :
Knows the market
Fully understand Short Sales
Versed and experienced in volume foreclosures
Can guide you and consult on contracts and flow of transaction
Does enough volume to know the different ways in which each individuale institutional seller and dominant agent in the market works
All are going to be your ingreedients for success
0 votes Thank Flag Link Wed Feb 23, 2011
Hey Boyz,

How are you doing now? Well that was May of 2008. Much has taken place since then. Our Prez is still trying to hold off the foreclosures and let the poor people live in their expensive houses they dont own.

All the real estate is local unless they take the same option arm ............
0 votes Thank Flag Link Tue Oct 12, 2010
Make an offer! Put yourself in the owner's shoes and decide what you would accept. Making an offer begins the financial conversation. If the owner does not counteroffer, then you know you're way too low.
Better yet, use a Realtor familiar with the area.
0 votes Thank Flag Link Tue Oct 13, 2009

Great post; and I've just read some of your others. You are an oracle for our times.

0 votes Thank Flag Link Sat May 17, 2008
The Boyz,
I forgot to add that when you compare closed sales - please make sure you take into consideration location and condition of property. Was the house on the NW side of Miami Shores, near the train tracks, on Grand Concourse or even East of The Boulevard.
A property selling East of the Boulevard that needs work, could be comparable in price to one that is in move in condition in Central Shores.
Hope that helps!
Web Reference: http://www.miamism.com
0 votes Thank Flag Link Wed May 7, 2008
I work, live and play in Miami Shores and can tell you that there are still a lot of overpriced listings here without a doubt. We turn down listings all the time because the sellers have false expectations but there are plenty of local agents that take the listings to add to their inventory, no matter the price.

It's important for you to take a look at closed sales to make a good assessment of the current market price, not how much they paid for their property.
There are currently 239 listings in Miami Shores and have only had 25 closings all year.

Take a look at this market report I prepared a couple of days ago:

Work with someone that knows the market and knows who is being realistic and who isn't. I can tell you that local agents will know the "scoop" on a lot of the properties - what offers have been and why some properties are not moving.

Good Luck with your strategy,
0 votes Thank Flag Link Wed May 7, 2008
Unfortunately some sellers are still living an unrealistic world. I see this problem everyday and it takes some time to make them realize the true value of their house. Some sellers go into foreclosure and they still think the house is worth more. Pricing is the key to why the home is not selling. For that reason, sellers must use only the sales that happened during the last 3 months. Good agents will not waste the time listing overpriced properties. If the property is not sold within the first 90 days, something is wrong. Some areas have not experience a sale in the last 6 months, so pricing a property in that particular area will be difficult. I recently had a listing expired that we brought 6 offers ranging from $680-$750K. Seller wanted $800K. A month after the listing expired, seller sold the house for $650K. This seller paid mortgage for 9 months, insurance, taxes and other expenses for the 9 months the house was listed and on top of that he accepted an amount $30,000 under our lowest offer. So to answer your question, hire a professional that works in the area, go over the CMA and make the offer according to the sales during the last 3 months. And I would even go as far as 10% under that price to be on the safe side. In a buyer's market you the buyer have the advantage. Appraisal companies are pricing 2-5% under the true appraisal value in order to be on the safe side. Don't be afraid to make an offer that is low compare to the asking price, it's all about timing. I wish you good luck on the purchase of your next home and if you have any questions, don't hesitate to contact me. Visit my website for more information.
Web Reference: http://www.forsaleagent.com
0 votes Thank Flag Link Wed May 7, 2008
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