Bb, Home Buyer in Sea Bright, NJ

in todays market, if a seller is asking 2350000, at what percent lower can a bid go in

Asked by Bb, Sea Bright, NJ Sun Feb 21, 2010

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15
Ah, this is so much simpler than the writer from Oregon known as "Dune" warns you about. You don't even have to have confidence in a hyper-local agent who actually knows every house that has sold.

Consider the following: There are only 12 or 13 beachfront single family homes in Monmouth Beach --- to make it even easier, they all have the same view and the lots are close to the same size. The comps are so straightforward that you don't have to be fearful of Realtors manipulating you as "Dune" would suggest. Don't worry about phantom offers...... Go see the house - evaluate the comps - buy the house if it meets your needs at the price you want to pay. Make a serious offer through a strong local agent who knows what they are doing. Go for it, Bb -- it's a rare location.
1 vote Thank Flag Link Sun Feb 21, 2010
Hi Bb,
My collegues are right - if it's priced right, it may go at 100% or higher than asking price. My last two listings went over asking because they were priced right.

There's another reason that locals know... this house is right on the beach side of Ocean Avenue. There are VERY few single family homes left on the ocean side of Ocean Avenue due to condo development. I used to live 4 doors down from this, the house where I lived now has condos on the spot, too.

If you are interested in working with an agent who knows the market and who can help you negotiate a superior deal, give me a call!
1 vote Thank Flag Link Sun Feb 21, 2010
BB,

Buyers ask this question over and over again to the point where it's almost comical now.
There is no set "percentage off" on a home. Most sellers these days, as well as their agents, are pricing homes at a reasonable price knowing full well the market value. Sometimes you will have an unrealistic seller, or an agent who will list at any price just to get the listing, but again nowadays that's rare.

Making a "low ball" offer , which I like to call a "fishing expedition", wastes everyone's time... yours, your realtors, and the sellers. That's not to say, making a slightly lower offer to allow for some negotiation room is a bad thing, but ultimately a "let's see how low can we go " offer only results in frustration for all involved.

The market in many areas is not as bad as what you hear or read, and in some cases the market has actually improved, with multiple offers and short time on the market, especially if it's a well maintained home.

If you are working with a Realtor, have him/her do a market analysis of comparable recent sales to get a good idea of what the home should sell for. They can also show you what the average list to sell price is in a particular area, which, combined with the closed sales statistics, will give you a better idea of a proper offer from the beginning. Of course if the house is seriously over priced, making an offer at market value is the right ting to do. That's what your Realtor and the comparatives will show you.
1 vote Thank Flag Link Sun Feb 21, 2010
Bb - Did you ever buy a property?

http://www.jskronski.remax-nj.com
0 votes Thank Flag Link Wed Jun 27, 2012
Susan

If you check the links it was/is AGENTS HIGHLY RESPECTED AGENTS who commented about, ask the question and related examples of/about "phantom" bids not "the writer from Oregon known as "Dune""

"the writer from Oregon known as "Dune""
Dunes
0 votes Thank Flag Link Mon Feb 22, 2010
You can go in and bid at 99% less. Will it be accepted? Probably not.

I would not bid according to numbers as such. I would bid according to what I felt it was worth especially if that was below what the comps suggest.

Look at the site below. It shows expected price changes in New Jersey. It looks like waiting may be a good idea.
http://www.housingpredictor.com/newjersey.html

Vast numbers of New Jersey residents fleeing the state as a result of rising job losses and one of the highest two tax bases in the country is projected to delay any come back in the housing market through the year.

That does NOT suggest house prices have any reason to go up does it? Does it suggest prices should drop? I would think so.
0 votes Thank Flag Link Mon Feb 22, 2010
First you have to be able to believe the information your Agent or the Sellers Agent is telling you is accurate if you are considering it of any value in your decision making process or in using an Agent for that purpose.

Please read....http://www.trulia.com/voices/Home_Buying/Proof_of_competing_…

and....http://www.phoenixrealestateguy.com/can-i-get-proof-of-a-com…

I think all consumers should check out those links.

Good luck
Dunes
0 votes Thank Flag Link Sun Feb 21, 2010
Hi Bb, this is not the strategy to use. $235,000 may be an amazing value that you should jump on, or it could be way overpriced. The way to evaluate value and guide the bidding process is with the support of a well constructed pricing analysis for the home of interest. When done well, it is a dynamite tool that will immediately flush out overpricing, identify great value, and guide the bidding by providing a recommended market value range based on the comps.

An offer that is based on the facts of the market is far more likely to succeed that one based on arbitrary % adjustments. And the reason is simple, the truth is hard to deny.

Good luck to you!!
Jeanne Feenick
Unwavering Commitment to Serivce
Find success at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sun Feb 21, 2010
There are no standards as to what percentage lower should one bid--do keep in mind that if the property is priced on target for today's market or slightly below, multiple offers may come into play. Your agent will best advise you.
0 votes Thank Flag Link Sun Feb 21, 2010
I agree with the other Realtors® . You must understand the market will dictate the price of the house , so if there are buyers for that house at asking price it will sell at that price. To find out fair market price you need to do an in depth comparative analysis of houses selling in the area. Sea Bright is a very poplular area for many reasons such as proximity to manhattan, good restaurants and entertainment nearby, Pier Village close by, the infamous beach clubs etc. For all those reasons the properties are holding their value. Your question is not uncommon but don't do yourself a disservice by thinking you need to get X percentage lower than offering price to get a good deal. Do your homework. If the price comes up at $2.35mil than that is the price, if your analysis comes up $200,000 lower than that is the price. Remember some sellers are motivated and price their properties correctly to sell as fast as possible leaving less room for negotiations.

Dont let the house of your dreams slip through your hands because of a technicality because this market could bounce back . If the house is worth the price and it is in your price range and you love the house then it is priced correctly.

Regards,
Val Gabela
vgabela@dianeturton.com
0 votes Thank Flag Link Sun Feb 21, 2010
As the others note, there's no formula or set percentage. But here's the real reason:

There's no relationship between the asking price and the real value of a property. Just because a home is priced at $235,000, doesn't mean that's any reflection of its value. For "true value," we're talking about what the home is worth based on comps--what other similar homes have sold for recently.

In the case of your question, suppose there are 3 homes in the same area priced at $235,000. But the homes aren't all the same. One, based on comps, really is only worth $220,000. But maybe the owner is greedy. Or maybe the owner owes $220,000 on a mortgage but needs to sell and break even. Or maybe it's a FSBO who doesn't have access to recent comps. Whatever the issue, that first home is only worth $220,000.

The second home is worth $235,000. It's been properly priced. Possibly a Realtor ran the comps, showed them to the homeowner, and the homeowner decided to put it on the market for that price. Or maybe a FSBO did the research and came to the same conclusion.

The second home is really worth $300,000. But perhaps the owners are getting a divorce and just want to sell. Or maybe it's an estate sale, and the children of the deceased parent just want to sell. That happens.

So, in the case of the overpriced home, even a moderate reduction from the listing price would end up in you overpaying. In the second case, the home is fairly priced. Maybe you can get it for less, but odds are someone will come in right around the asking price. And in the third case, you'd probably want to offer as much as (if not more than) the asking price.

So, asking price is no indication of the value of the home, nor is it any guide to what you should offer.

And while you'll see some statistics saying that "homes in ______ are sold for 96% of the asking price," that may be correct but totally irrelevant. First, those are averages. You're dealing with a specific home. The specific home you're interested in may be overpriced by 4% . . . . or 10% . . . . or 20%. Or it may be underpriced. Tell you what. Get two pots of water. Put ice cubes in one so that the temperature is around 20 degrees. Put the other on the stove until it's boiling. Plunge one hand into each pot. How's it feel? What? Not so good. Why, the average temperature is a warm 120 degrees. That's the average.

Second, that 96% is totally misleading. It won't reflect any seller concessions, like 3% to help with closing costs. So that 96% actually may have resulted in a net to the seller of 93% of list.

Third, 96% of what? Suppose the house you're looking at started off at $280,000. Then it was reduced to $250,000. Then to $235,000. Sure, the selling price MIGHT be 96% of $235,000. But that's certainly not 96% of the original listing price. Or, from your perspective, maybe the house is only worth $199,000. It doesn't sell at $235,000. It's reduced to $215,000. Then it's reduced to $208,000. And it sells for $199,000. That's about 96%. But it'll take far more than a 4% price reduction at this point--at $235,000--to represent a competitive value.

So: Determine what the property is really worth in today's market. Then pay no more than that amount. You probably should offer less. That's how you do it.

Hope that helps.
0 votes Thank Flag Link Sun Feb 21, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
OOPs...also just to let you know, if you are buying in Monmouth Beach, it appears that the average list to sell ratio is 96% of list.
0 votes Thank Flag Link Sun Feb 21, 2010
Ps

Bb I don't know market conditions for Monmouth Beach, but I would assume location or proximity to the beach may play into value, too.

I am sure a Jersey "shore" agent will come along who can help to direct and guide you..

Besi of luck..............
Debbie Rose
Prudential NJ Properties
0 votes Thank Flag Link Sun Feb 21, 2010
BB - there is no formula or calculation for deciding how much to offer on a home.

If the home is priced well, it may sell close to asking price, or at least within 3-4%. If it is overpriced to begin with, then it may take a good reduction before it sells.....and that final number could well be 10% or more lower.

You are free to offer any number you want, but if you really want to buy the home, then you must be educated as to values in the area. The fact that you're asking this question in the first place, shows you are not yet well infomred - that's how an agent can help you.

All the agents who will be answering this question will be telling you the same thing........have a realtor do a market analysis for you, so that you can educate youself on the current market conditions in the area. Only then will you know what is reasonable or not.

No one can tell you to offer 5, 10, or 15% below list price...............not without knowing the house, condition, and location.

Best wishes..............
0 votes Thank Flag Link Sun Feb 21, 2010
Unfortunately, there is no conventional response to the asking price of any home in any area of the United States that I know of. Your response should be based on what you (with some help from your agent) believe the house is worth. Within any market, there will be overpriced homes, well priced homes and, perhaps, homes that have been under priced by motivated sellers. Your response will depend on which of these possibilities is the case.

You should be able to figure out if the home is correctly priced by looking at other homes that sold recently in the same area. Your agent can help you determine how the price of the home you on which you are bidding compares to recently sold homes. This is a bit of a tricky process since you will probably find no homes that are exactly the same as the one that interests you.

I hope this helps.

Ron Rovtar
Prudential Real Estate of the Rockies
Boulder, CO
303.473.1926
0 votes Thank Flag Link Sun Feb 21, 2010
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