Hi Donna, yes it's a lot of work to do that kind of tabulating, it's great that you can do it. I do graphs, but not of a particular property, I take the MLS data each month and graph inventory, prices, etc. As for the square footage, unless it is new construction or the information is in the public record, she is right, many listings don't contain the square footage. When I was new I used to ask the homeowner, but people tend to exaggerate, and no one likes finding out they've made an offer on a 2900 sq foot house that turns out to be 2400. Good luck in your search! At least when you find something you will know you've made a good decision! As I said, it's just as frustrating to us when seller's refuse to accept the data.

Tue Mar 25 2008, 13:22

Thank you, JR!

Donna: I am the one who is tabulating all of the comps from the stratus reports that my agent provides me for recent sales for the past 3 months (a lot of work, but my agent said that there was no way to do this, in Suffolk county),
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There is no way to do what in Suffolk County?
*To create a table for a CMA of recent sales (3 months) for the property of interest. Instead, my buyer's agent sends the Stratus reports to me, then I have to create my own tables for each property. I include in the my columns: property address; date sold; days on market; listing price; sales prices, % difference; bedroom/bath; parking (garage or driveway); condition, and remarks (including size & sqft). This person also says that there is no way to get square footage on any property, as this is not done for homes. So, I type all of this data into my table, determine differences between properties (e.g., new windows/roof/plumbing; electrical; updated kitchens and baths; any other additions, CAC, etc) and determine a price based on all of this data. Like I said, all of my offers have been well within the comps. They are on the low end for fixers, and on the high end for turn-key (I even offered 5K over the highest comp for one home in turn-key condition, then went up another 5K as a counter-counter offer. I was very concerned that the home would not appraise at a price any higher). I will keep looking, and keep using numbers.

As to the comment by Jeffery: Yes, I really want to buy. As I have made perfectly clear, all of my offers were solidly based on recent CMAs for the house of interest. I see no need to buy a house based on what the seller "needs" just as they don't (and shouldn't) care what I can afford. The house should be sold based on worth, nothing else. The market should drive the price, not wants and needs.

Thanks, again, everyone! This has been very helpful!

Tue Mar 25 2008, 13:13

I wish Jeffrey would be banned from the 'Real Estate Professional' tag - but sadly, he represents the views of far too many of the so-called professionals. Nothing like telling people to pay too much because it will go up eventually and they're just being greedy by wanting a cup of coffee everyday.

The entire argument starts with an irrelevant premise, 'as long as the price is correct'. Wow - we've just found out that if you try to charge approximately the right price for things, they sell at that price. I didn't know we had Adam Smith answering questions.

Unfortunately, the question was referring to thinking that the homes were NOT priced correctly. If you have the comps on your side, that means there really are sellers who are willing to sell at reasonable prices - patience will find them. Think of it this way - if you're looking at 500K house, the 5-10% savings would be worth 25-50K - well worth the effort of a few more weekends of looking.

Tue Mar 25 2008, 13:04

Donna, I will tell you up front that I am from a different state. However, concepts are similar. I can appreciate where you are coming from. When I am working as a buyers agent and even a listing agent I like to use comparisions to show the other side why we have arrived at our offer.

However, as another agent said if a property is priced right, then you are not going to be able to go in and steal it for 20% under asking price. I like to price the homes right from the beginning. It makes life way easier. Most of my homes sell 97% - 100% + of asking price even with a down market.

The other thing to consider is that you are getting a mortgage so you will need to have an appraisal done. If the house does not appraise for enough, then don't buy it. That is unless you are in love with it. I would have your buyers agent put some verbage in the offer regarding that.

Maybe you do have some unrealistic sellers out there, but sometimes I find that buyers hear it is a buyers market, it is a buyers market, it is a buyers market and they are not realistic either. I am not saying that you are being or not being realistic, but rely on your agent. She is thinking of your best interest. Also when looking at comparisions make sure you are comparing apples to apples.

I have had buyers before who try to use a comparison, but the houses really don't match. For example the one they want to buy has granite counter tops, high end laminate flooring, tile flooring, marble bathroom etc. but then they try to use a comparison of a house that has formica counter tops, vinyl flooring and no high end upgrades. That won't fly.

I hope you don't take this answer as being irratating, but I am just being honest with you! Best Wishes to you!

Tue Mar 25 2008, 12:57

Donna:
I appreciate all of the very good comments to stick with the data, and stay the course. I have made it clear that the seller may feel free to re-enter negotiations with me, if they change their minds, later. As a statistician, I crunch numbers for a living, so I will remain focused on a numbers-based (versus an emotion-based) approach in purchasing a home.
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Good plan, Donna. Then you also can tell whether or not a home is way overpriced. Perhaps if you know it ISN'T overpriced, and make a reasonable offer based on that, you'll get responses from homeowners.


Donna: I don't care to lose my 10% down-payment in order to take care of a seller's "needs."
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That's good. Seller's don't care about your "needs" or what you can afford either. They certainly wouldn't lower the price if you couldn't afford that much money. Why should you?


Donna: I am the one who is tabulating all of the comps from the stratus reports that my agent provides me for recent sales for the past 3 months (a lot of work, but my agent said that there was no way to do this, in Suffolk county),
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There is no way to do what in Suffolk County?

Tue Mar 25 2008, 12:57

Jeffrey, wow. Homes sell for 95%-98% of asking prices as long as the price is correct? If the price was correct, wouldn't they sell for 100%? Or is "correct" considered between 2% and 5% of the correct price? That would explain a lot about schools today. Also, what decides a correct price? If the comps don't support it, what does?

"That perception of overpaying for a home does not come into play when you look at the appreciation you will receive when you sell." This is nonsense. If you pay 500k for a house today, and in 2 years its worth 450k, your monthly payment is $300/month more using your $6/1k number. If in 15 years you decide to sell and its now worth 900k, wow, you've gained 80%, very nice, although if you had bought in 2 years, you would've gained 100%, and you paid $300 * 12 months * 15 years = $54,000 more for the privilege of those two years. A lot of comments are talking about buying now before prices spike again, but history has shown that prices bounce around at the bottom for a few years before recovering. So when appreciation is the same as inflation, its probably about time to buy.

Also, I know a lot of people like to point to interest rates and use this as why its a good reason to buy, but this is flawed. Interest rates are still low even with recent moves up and with the prime rate having been cut by 3% in the past 6 months, its likely they'll come down even more, so its true rates are good. But if you buy when rates have gone up, you can always refinance when they come down. No one will let you refinance you purchase price.

Zack

Tue Mar 25 2008, 12:31

Homes sell approx 95-98% of asking price as long as the price is correct and as long as the seller is willing to move on the price. You need to decide if you really want to buy. Also factor in the number of years you want to own. That perception of overpaying for a home does not come into play when you look at the appreciation you will receive when you sell. Especially if that difference may be less than you think.
Also, since you are getting a mortgage, it cost is approx. $6.00 per thousand per month. And if you are losing the home of your dream because of say $60.00 per month ($10,000) or one cup of coffee at DD's per day - cut out the caffeine - it has gotten to your head anyway.

Tue Mar 25 2008, 11:56

I appreciate all of the very good comments to stick with the data, and stay the course. I have made it clear that the seller may feel free to re-enter negotiations with me, if they change their minds, later. As a statistician, I crunch numbers for a living, so I will remain focused on a numbers-based (versus an emotion-based) approach in purchasing a home. I don't care to lose my 10% down-payment in order to take care of a seller's "needs." Regarding the average of 10% below listing for all of these areas: differences in percentages may reflect the fact that I am using a different price range. I have not even accounted for reductions in prices prior to close, which would drive the % much lower. I may need to consider another buyer's agent. I am the one who is tabulating all of the comps from the stratus reports that my agent provides me for recent sales for the past 3 months (a lot of work, but my agent said that there was no way to do this, in Suffolk county), then showing my agent my reasons (based on the comps) to stipulate my given offer. No, I have not gotten a better reason to offer higher, just "my gut tells me that x$ is a good price for this house," or "this is a good price, for this town." I feel like I am the only person who is using comps to determine the fair market value of the houses that I have seen! I'm glad to hear that other seller's agents use comps to determine a fair listing! thanks, again!

Tue Mar 25 2008, 10:33

what is your hurry?
you got $50,000 burning a hole in your pocket?
you need 30 years of debt?

take your time
be patient
this market hasn't popped yet
they're a little behind on things
Cali first
Chicago second
then the east coast gets it

wait a few years
its a big investment
one wrong move could affect you badly for 30 years
housing prices not going up anytime soon


anyways

good luck

Tue Mar 25 2008, 09:58

The barrier to entry for the real estate field is very low and with housing going crazy the past few years, this has led to a deluge of agents/brokers/sales licensed people in the market which add little value and detract from the reputation of good agents. So don't be afraid to look around for others.
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A truer statement has never been made! Thumbs up from me. Nobody would be happier to see that lowest common denominator leave the business to those of us who treat it like a business. They hurt us all.

Tue Mar 25 2008, 09:34

Gail,
I can't give you enough thumbs up for the comment. I tried to give you two but it wouldn't let me. :-)

Donna,
Also, you don't want to realtor that just blindly agrees with you also. It doesn't help to have a yes man/woman. If your realtor comes back with solid comps and reasons why you need to be offering more, (I prefer to stay 5-10% with asking is not a reason) you definitely want to keep that person and recommend them to others. The barrier to entry for the real estate field is very low and with housing going crazy the past few years, this has led to a deluge of agents/brokers/sales licensed people in the market which add little value and detract from the reputation of good agents. So don't be afraid to look around for others.

Zack

Tue Mar 25 2008, 09:30

I think the other Long Island agents here will agree with me that we have the same trouble at our listing presentations. The last one I did, the seller owed 350,000, the comps showed (and I agreed with them) his house might sell for 325,000. He listed with someone else for 425,000. It's worse in a higher range: I've had comps showing a home will sell for 525,000 and the seller INSISTED his house was special/unique/really nice/private/better etc than the rest and was worth 850,000. Even after I showed him what DID sell for 850,000 he refused to come to his senses. As long as there are incompetent agents to list the unrealistic buyers, there will be overpriced listings. This is why, in my MLS at least, we have 1,600 homes for sale. It's not for lack of buyers--like you, they are out there.

Tue Mar 25 2008, 09:21

Donna,
Having had a similar experience in Westchester county, my advice is to wait for them to come to their senses. If you have solid comps and can read market trends, then you can come up with a reasonable price. The places you've listed are quite far from the city and the majority of employment so to suggest these exist in a bubble and will not be affected is very unlikely. As for your broker, if you're feeling pressure, or don't think you're on the same page with where the market is at, ask them to prove her point to you. If you're satisfied that they can provide sound reasons why the market is better than you believe, good, if you're not, tell them thank you for your time and you'll be seeking other representation. You should definitely ask the broker to lay out in factual reasons, (comps, market trends, sales increases, etc) why these houses deserve better offers. If you're just getting vague things like "I don't feel this is overpriced." or "You can't really compare there, its no close enough." then you need to find another realtor. The case-schiller index came out today and the NY metro area has seen a 1% decline in the last month alone. While you can't take this number blindly and just apply it, it does tell you something about the greater market trends.

Zack

Tue Mar 25 2008, 09:14

I price all of my listings based on 3 months of comparatives sales. Houses that are actually sold above those numbers (if it happens, which I doubt) will NOT appraise and buyers will be refused mortgages.

Homeowners need to decide if they are committed to selling or committed to a number. I only work with homeowners who are committed to selling. I am in Long Island and this IS a buyer's market.

You are approaching your purchase from an educated and sensible direction.

Tue Mar 25 2008, 09:04

Donna, all areas, including the areas you are searching in have depreciated over the last 6 months, more so in the last 3 months. Alot of what is happening in the market place right now appears, to me, to be related to paranoia with all the bad financial information be reported. Your agent, in your interests, may well be advising you using a purely addressed financial model that may not necessarily be valid.

I have found the most sound approach in purchasing to be "emotion" based along with financial characteristics. It truly depends on how long you wish to remain in the home you are planning to purchase. Like any other investment, it will change upwardly given time in almost all cases, as long as it is in a good area with good schools. Purchasing rather then renting, depending on your own financial model would usually be advocated leveraging income, tax benefits and your overall investment strategy.

Tue Mar 25 2008, 07:40

Hi Donna,
Thanks for the additional info. If your offers are based on solid data and comps, I suggest you continue the same efforts, and you will find a property. It's possible that even one of these 5 sellers may come back to you and be willing to talk further. Ask your agent to keep the door open and make it easy for the seller agent/seller to come back to the table. The sellers, at this time, believe that another buyer is out ther who will pay them higher. If time proves that theory wrong, some of those sellers will adjust their expectations and some will simply go off the market. While it is frustrating, stay calm and stay on track.

The amount that a seller "needs" does not determine value. These little words speak volumes about a seller focused on what they "want" vs. looking at reality.

In order to buy the new car that I want, I "need" to get $22,000 for my car. The fact that my car is only worth $9,000 will prohibit me from ever finding someone to meet my need. Markets dont' perform to meet the "need" of a particular buyer or seller. Some sellers (and buyers) don't grasp that.

S If you are using solid comps that are valid comparisons, stay the course, stay calm, and leave the door open for any seller to reconsider. Meanwhile, proceed on your search for new opptys. Good Luck!

Deborah Madey - Broker
Peninsula Realty Group - New Jersey

Tue Mar 25 2008, 06:00