Home Buying in Burlington>Question Details

Jackson, Home Buyer in 01824

Question on a potential FSBO.

Asked by Jackson, 01824 Tue Mar 3, 2009

Over the summer of 08, there was a home in Burlington going for $459K. The owner never lowered his priced and then eventually took the house off the market after a couple of months. The house is not currently on the market, but we know the owner and he still wants to sell. Do you think that 400k would be a reasonable offer, considering that no real estate agent will be involved and the market has worsened since the house was last for sale?

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5
The question you should be asking is if $400K is way too high.
In most markets RE prices are in a state of collapse. If $459K
was the bubble price, the an offer in the $300K range should
be more than fair. Since this seller is obviously both a fool
and delusional, you should check into his situation. What are
the terms of his outstanding mortgage? How soon till his
mortgage resets and he can't keep up the payments? His
mortgage is a matter of public record, and these things are
easy to find out. Another approach would be to start out the
conversation by asking if he is willing to begin negotiating
a short sale. That just might shock him back into reality.
Remember, stock prices are back down to 1997 levels.
You should not be buying any real estate above the
1997 price.
0 votes Thank Flag Link Tue Mar 3, 2009
Jackson:

$400K may indeed be a welcome offer, but what if the home is only worth $350? It's very nice that you are concerned about the seller's emotional response to the offer, but we're talking about WAY too much money for that to be the driving offer. At the end of the day, you need to make an offer that you feel represents the VALUE of the house in the CURRENT market. Please do the research to make sure that you are making an informed decision - which means seeing at least 30 houses in the target area. Can't see 30 houses? Work with someone who has. It's OK to pay a little more than market if you LOVE the house, but make sure you know the market, and make sure its only a little. Conversely, if the home is worth $450K (and it could be...), than you won't be surprised when the seller tells you (probably not so nicely) to take a walk! Either way, knowing the value of the property will take the guesswork out of what your nest steps should be.

Matt
Web Reference: http://www.bjheisler.com
0 votes Thank Flag Link Tue Mar 3, 2009
Hi Jackson- My suggestion would be for you to look up in the public records (county registry of deed which records mortgages, etc.) what he might OWE on the property currently. If he is on the hook for $425K, he may not be to eager to sell it to you for $400K- regardless of there being no RE commission, etc.
If you want some help on how to figure that and where to look, or anything else, please feel free to contact me. Thanks and good luck,

Ken L.
0 votes Thank Flag Link Tue Mar 3, 2009
Hi Jackson,
It is hard to answer without seeing the house and using current comps to give you an idea of what a fair offer would be. If you are talking about 1 Sunnyfield Ave. , there are some discrepancies in the public record stats and what the seller is claiming. This doesn't mean that the seller is being deceiving, it could be that renovations have been made that aren't accounted for on the assesors field card.
I have found that most FSBO's are over priced to begin with. You really should find a buyer's agent that is willing to work with you to determine not only a fair price but any contigencies that need to be added to the offer based on the specific property. If they had it listed on MLS then they were offering out compensation to a buyer agent at some point. If I can be of any further help, don't hesitate to contact me. Best of Luck!
0 votes Thank Flag Link Tue Mar 3, 2009
Good Morning Jackson,

As I have said many times, a homes value is set by buyers and sellers. It is worth exactly what a buyer is willing to pay and a seller is willing to sell it for. In most real estate markets, properly priced homes have continued to sell. The fact that this home did not is indicative of one that was overpriced for the market.

Given that we are still in a declining market across the country, a $400K offer may in fact be a source of welcome relief for the seller if he needs to sell. I would encourage you to discuss your desire to purchase the property with the seller but please do yourself a favor, make any offer that you make contingent on the property appraising for at least the sale price. We are long past the days when buyers could buy an over priced home and wait a short time for the market to catch up.

Good luck with the purchase.

Frank Spencer
0 votes Thank Flag Link Tue Mar 3, 2009
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