Homebody, Home Buyer in Oakland, PA

A house listed at 150k and the market value for this home and other in the area are about 70k whats a good price to offer

Asked by Homebody, Oakland, PA Wed Aug 18, 2010

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12
Brett Pehrson’s answer
I'm not in Pennsylvania, but the rules are pretty much the same wherever you go. What's comparable? What's the price per square foot? Is the $150k home twice as big as everything else in the area? A good Realtor on your side will help you determine what a house is, or is not, worth. Even though an appraisal is really for the lender's purposes, keep in mind that it's another party who has to be able to justify your offering price as being reasonable based on facts and numbers. So, find a good buyer's agent who knows the area and have them pull up the comparable properties for you...and remember that whatever you buy it for will effect the values for all your new neighbors.
1 vote Thank Flag Link Wed Aug 18, 2010
I'm in agreement with the comments already posted. Contact a Realtor to pull the recently sold comparables. Try not to pay too much attention to the market value or the assessed value published on the Allegheny County Assessment website. They're usually much lower than what the house is worth. Once you know the true value of the home then you can move forward.
Web Reference: http://www.EATHOMPSON.com
0 votes Thank Flag Link Thu Aug 19, 2010
Why do you want to bother with a home that's listed at more than twice market value?
0 votes Thank Flag Link Thu Aug 19, 2010
Homebody:

It’s really simple:

(1) Find a good realtor to assist you.
(2) Make sure you have a good Realtor to assist you.
(3) Locate a good Realtor …

Once you have your representation:

(1) Have them run the comps on any house you are interested in buying.
(2) Write a good, clean offer close to or at market value.
(3) If you have a realistic seller on the other side who enters into meaningful and appropriate negotiations AND you really want the house, keep at it until you have a deal.

If your offer is not accepted and you cannot negotiate a deal, go find another home you like.

Rinse, lather, repeat.

As an aside, if the comparable homes in the area are selling for less than half of the listed price of a particular home, then someone is probably out of touch with reality. You more than likely will not have a lot of luck negotiating with them.

Lastly, if you do manage to negotiate a deal, if it is too high, the property won’t appraise and then you are back at square one.
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0 votes Thank Flag Link Thu Aug 19, 2010
In Allegheny County the average market value to "true value" in 86.5%. In other words, most market values that the county uses for tax purposes, are 86.5% of what the true market value would be. Having said that, your best course is to find a great local agent who can assist you with market comps and has good knowledge of the immediate area where this home is located. I wish you good luck and hope that you are able to buy this home for a price that you are happy with!
0 votes Thank Flag Link Thu Aug 19, 2010
Without knowing the particular house and its location it is impossible to provide a definitive answer to this question in the Pittsburgh Market. The problem is that the tax market values or assessment values that are published are both dated and inconsistent and tend to be a poor barometer of the market as it exists in reality. The best advice I can offer is to consult with an experienced and knowledgeable local agent who is willing to represent your interests.
0 votes Thank Flag Link Thu Aug 19, 2010
Well. . . .you have some great adivse, from some experienced Realtors. Make that decision, and get a Realtor to guide you through the process, from beginning to end. Placing an offer is just the beginning. Purchasing a home is a complex process. Take the help!
0 votes Thank Flag Link Thu Aug 19, 2010
Offer a price you will be happy paying. Comparables give us a shot at predecting the loan value not what it is worth to you.
0 votes Thank Flag Link Thu Aug 19, 2010
A "good price to offer" depends on many things. Your best bet is to work with an experienced agent that can help you come to a decision based on the current market, condition of the home, your financial status, recent sales of "like" properties, current listings of "like" properties, and more. There are many homes that sell for multiple times their "market and/or assessed" value based on many different factors. If you are not familiar with this, contact a local experienced Realtor and start working with him/her.
0 votes Thank Flag Link Thu Aug 19, 2010
Why are you looking at the prices of currently listed homes? Get a few real estate agents to do a market analysis of your home. They will look at homes similar to yours in the near area which have recently sold (up to six months) and give you a price range of what you could get for your home.

Then you would have real information on where to set your asking price.
0 votes Thank Flag Link Thu Aug 19, 2010
That's why it's good to work with a buyer's agent: If by "market value" you mean Assessed Value for Allegheny Taxes, then that is not really the "market value" of the home... it is the Assessed Value for Tax Purposes. The meaning of market value is: the price a product will sell for to the average buyer under the current market conditions.
If you were working with an agent, he/she could do a CMA (Comparitive Market Value) and tell you what a reasonable price for the home should be. And, should he/she be a good agent, he/she could probably save you a whole bunch of money and maybe even get you into the home with some updates that you otherwise wouldn't have... AND you wouldn't have to pay the agent's commission! Many buyers don't realize that the seller pays for a buyer's agent's commission, so they try to do it on their own to save a buck and in the end, usually pay more for the home. (I have a friend who did that and now he's talking about selling, and will likely take a loss b/c he overpaid for the home).
If you'd like a free consultation, give me a ring. I'm always happy to help!
0 votes Thank Flag Link Thu Aug 19, 2010
Hi Homebody. Thumbs Up to Brett, he's right. Use a local agent to give you the comps and make your offer based on those comps. Real estate has come a LONG WAY in the past 30 years. This information is at our fingertips and running comps for you should not take more than 15-30 minutes with a full report.

Make sure that when you make your offer, you include copies of these specific comps, nothing older than 6 months. Also keep in mind that if the $70K value is from a short sale or foreclosure, and the property you want to buy is owned by someone not in financial difficulties, you may have a hard time convincing them that their home is now worth $70K, down from a recent $150K. In my area, appraisers must take all sales into consideration, whether they're shorts, foreclosures or REOs.

GOOD LUCK on your purchase!

Scott Miller, Realty Associates, Boca Raton, FL
0 votes Thank Flag Link Thu Aug 19, 2010
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