Lost In Relo…, Home Buyer in Central Business Dis...

Are Sellers being reasonable?

Asked by Lost In Relocation, Central Business District, Newark, NJ Sun Dec 14, 2008

Well, having found our feet in Monmouth Country and a much better idea of where we want to live (and more importantly, where we don't want to live), we've really narrowed down our geographic search. But, my question to you Pros is, "are sellers being reasonable" - I know that not all sellers listen to their real estate agents and thus we see the property sitting on the market for a long time - do you think they're more reasonable now? What "give" if any are you seeing from the asking prices these days?

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Answers

15
Hi "Lost": Just heard a risqué joke whose punch line was "Some say yes and some say no." That's just the way it is. The wonderful thing about the previously owned (Never say "used," you'll get somebody offended in the comparison to a less well thought of enterprise) housing market is that it is a genuine commodity market. No one controls it and each offer is unique.

Generally, EVERYONE "knows" that the economy has tanked and that the prime cause was that the housing "bubble" of super fast appreciation, which ended early in 2006 or so. The sellers in the market today may have a good or bad idea of what their property is worth and a good or bad situation of their own with which to deal. So, just as with any other market at any other time, there are good deals and bad deals available right now.

My advice is simple: Work with a Realtor (If I didn't truly believe that we bring a benefit to the public, I wouldn't be in the business.) Realtors can show comparable properties available on the market and comparable recent sales, so you will then be able to weight how good a deal you are getting. Remember, a great home that you pay a premium for is most likely better than a shanty you get at a great price. You are either going to live there in comfort for a long time, endure the hovel or be back in the buying-selling market promptly.

There are no magic bullets and no magic times. Prices are better than they were two years ago and mortgage rates are lower than you can expect in almost any economic climate but this one. (If you can qualify for a mortgage loan and actually get one.)

If this is the time for you to buy, do it, with knowledge!
1 vote Thank Flag Link Mon Dec 15, 2008
I can understand your frustration in this market and I think it is shared by sellers, buyers and real estate professionals alike. At issue, I believe, is the perception of where & when the "bottom" of the market will find us.

I think those people (both buyers & sellers) who have a clear understanding of where the market is right now are certainly more realistic about values, but many buyers are looking to a future "imagined" bottom of the market when values may (or may not) be lower. Many of these buyers feel the pricing should be a whole lot lower. Likewise, many sellers have already discounted their prices -- but perhaps not quite enough -- and feel justified in holding firm to their price. In many cases this creates a 'stalemate' situation where no one wins.

Lately I find most buyers are looking for a deal (some will even say a "steal") and while it's understandable that they want to save money, it's not necessarily sufficient justification for sellers to make that happen. It all boils down to motivation: a seller who is in financial distress or sufficiently "fatigued" by the market may agree to a price that would not have been acceptable previously, now they may accept a price that's lower than what they believe to be fair... otherwise many decide its not worth selling and hold firm in hopes of a better offer. Similarly, if a buyer "needs right now" to find housing they may be inclined to pay more than they originally anticipated rather than wait.

I do know that you can't judge this market with any blanket assumptions about value and pricing. There are actually, right now, many homes on the market that are very well priced and demonstrating real value. For instance: I have a listing in Fair Haven that has reduced their price 30% (!) since originally entering the market, a home in Rumson that has reduced over 20%, a home in Red Bank reduced over 35%(!)... I believe that these and many other sellers are being more than reasonable especially given that forecasters such as the Otteau Valuation Group, a well-respected appraisal consulting firm in NJ, are saying that Monmouth County will probably have experienced an average 25% reduction in value from the height of the market (Aug 2005) until we reach "bottom." Many homes are already priced in such a way that they "should be" generating offers... but many are not.

Frustrating to say the least.

What does this mean to the current buyer who is ready, willing and able to make a purchase?
1) Work with a good agent who will be able to provide clear guidance on which homes are well-priced and are reflective of the current market.
2) Understand that with current mortgage rates the overall savings right now are extremely attractive... once rates increase, which they certainly will, you're very likely to lose more in interest payments than in any future price reduction you may be hoping for.
3) Get creative with your offer: many people think its all about price but there are many other effective negotiating strategies that help both buyer & seller feel like they're getting a better deal (e.g. mortgage buydowns can be very effective albeit confusing to explain...) Discuss these with your agents.

All in all, make an offer if you like a house. Sounds pretty simple but many buyers are not taking action despite finding homes they like. You may not get it for the price you want but at least you'll know and be able to move on to the next one.

Good luck with your search!
Thomas McCormack
1 vote Thank Flag Link Mon Dec 15, 2008
@Lost in Relocation,

I say the same thing to buyers and sellers alike..."a home is worth what a buyer is willing to pay for it". Each home and its owner has a unique situation and story. To dig into the details is important for your ability to negotiate. I also recommend that buyers do their best to put themselves in the seller's shoes - it is a scary market for sellers today and many of them are going to be cautious with pricing (to leave room for negotiating and potential inspection concerns). It is not easy being a buyer OR a seller in today's rollercoaster environment. I believe most sellers understand the market and perhaps you will find the success you're hoping to achieve now, if you concentrate on finding the right home for you and work toward achieving the same common end-result - to buy that house. Sellers want to sell their home, or they wouldn't be on the market....some just need a little more experience and time to come to terms with their reality. Timing, strategy and approach matter. Hope this helps

Linda Gillespie
Sales Associate
Gloria Nilson, REALTORS®, Real Living®
110 Avenue of Two Rivers, Rumson, NJ 07760
609.847.2443 cell
http://www.LindaGillespie.com
NJAR Circle of Excellence Award 2003-2008, 2010
Accredited Staging Professional Realtor®
Elegant Home Specialist



Linda Gillespie
Sales Associate
Gloria Nilson, REALTORS®, Real Living®
110 Avenue of Two Rivers, Rumson, NJ 07760
609.847.2443 cell
http://www.LindaGillespie.com
NJAR Circle of Excellence Award 2003-2008, 2010
Accredited Staging Professional Realtor®
Elegant Home Specialist
0 votes Thank Flag Link Wed Oct 12, 2011
Some Sellers are more motivated than others...But as a Buyer you should understand that PRICE is not the only thing to negotiate. For example: For many Sellers, time is money, so the sooner you can close the lower they can go.

Also - Thomas Mc. made a great point...(e.g. mortgage buydowns can be very effective albeit confusing to explain...). It can be somewhat confusing, yet knowledge is power...if you'd like to run some numbers to understand why temporary buydowns are more financially impactful than standard price reductions...
please visit:
http://www.321advantage.com/buyers-calculate-your-rate
Web Reference: http://www.321advantage.com
0 votes Thank Flag Link Fri Aug 7, 2009
Interestingly enough Fair Haven stats are showing a recovery in terms of sales year to date vs last year. It completetely depends on the motivation of the seller. Some sellers need to move more than others. Wish there was a rule of thumb to share with you, but there is not. Please use an experienced agent with good negotiating skills - it will make a big difference to your purchase price.

Carolynn Ozar-Diakon
Broker - Owner
RESOURCES Real Estate
732-212-0440
carolynn@resourcesrealestate.com
0 votes Thank Flag Link Wed Aug 5, 2009
Some are and some arent, what we are seeing is the ones that are and take our professional advice ( a major part of why they hire us) and price it right ..from the beginning...are selling in less than 90 days assuming no major interior or exterior defects such as main road, high tension wires, etc,
The ones that are not reasonable and feel they know better or that they want to "start high" and come down later end up chasing the market.
In a declining market you have to be in front of falling prices meaning you should price the house right about where it should sell, even slightly under to effect a quick sale or even over asking as result of a bidding war...YES THEY STILL HAPPEN!!
If I can assist you in your search, I live in Fair Haven and sell homes in the area. Feel free to call at 732-859-7682 or email me at BillKilbride@msn.com
Best of Luck!! It is a good time to buy.
Web Reference: http://www.BillKilbride.com
0 votes Thank Flag Link Wed Jun 17, 2009
Lost -

The simple answer, (which is not so simple) is yes and no. I would say about 50% of sellers out there are being reasonable and "just now" realizing they will not get the $ for their homes that were being thrown around a few years ago.

No, also, because there are a lot of sellers may have purchased in the last three years and are trying to move and recoup some of what they spent.

Most important is to work with a knowledgeable Realtor that can help you target and area and then help you find the house that can be negotiated to a sale price. The "give" comes from the seller.. as everyone has a number in their head that they "need" to walk away with. I have listings where there is absolutely no room... and some where we have upwards of 60k in negotiating cap.

Keep a serious outlook, look at comps and be realistic. There are very good homes for sale at below value and if you are smart you can find one.

Call me if you are ready.

John Sacktig
Broker / Manager
Orange key Realty

Direct: 732-213-1409
0 votes Thank Flag Link Mon Dec 15, 2008
Seller's motivation is key to selling now or in any market. And of course, reasonable is a very subjective term.
However, to answer your question: I have put several properties under contract since September's financial mess began. In the above 500K-1M range, offers came in 100K under asking. Comps off the table, economic market conditions the driving force. In a rational market, comps work great. Don't be afraid to go in with a low offer. Prices have been falling (on average) double the rate they were earlier this year. A low offer is not an insult, but a buyer with interest. Sure beats no offers--now that's insulting!
As has been stated, the key is to have good agents who can explain this craziness to their sellers, who will work with the buyers agent to come to an agreed upon price, etc. An agent who understands where the market is, where it's been, where is predicted to go and why.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Mon Dec 15, 2008
I find that most homes are listed at a reasonable price. We would expect the seller's agent to do their "due diligence" by making an accurate assessment of the CMA (Comparative Market Analysis) of the neighborhodd of the subject property. It will be your "due diligence" to have your agent pull the comps to look at the average "sold" price of the neighborhood and those homes very similar to the one yo are interested in. You do not necessarily have to offer at the seller's list price if you find that it may be overpriced. Feel free to make an offer at a price you feel is reasonable based on the research. Also, depending on your specific location in Monmouth Co., overall, home prices are continuing to decline so both sellers and buyers need to keep that in mind.

Valerie McNeal, CRS, CDPE, GRI, RE/MAX, Baltimore Metro Area
Web Reference: http://www.TheMACTeam1.com
0 votes Thank Flag Link Mon Dec 15, 2008
I find that most homes are listed at a reasonable price. We would expect the seller's agent to do their "due diligence" by making an accurate assessment of the CMA (Comparative Market Analysis) of the neighborhodd of the subject property. It will be your "due diligence" to have your agent pull the comps to look at the average "sold" price of the neighborhood and those homes very similar to the one yo are interested in. You do not necessarily have to offer at the seller's list price if you find that it may be overpriced. Feel free to make an offer at a price you feel is reasonable based on the research. Also, depending on your specific location in Monmouth Co., overall, home prices are continuing to decline so both sellers and buyers need to keep that in mind.

Valerie McNeal, CRS, CDPE, GRI, RE/MAX, Baltimore Metro Area
Web Reference: http://www.TheMACTeam1.com
0 votes Thank Flag Link Mon Dec 15, 2008
I hear sellers asking the same question about buyers. Yet, there still seems to be houses being bought and sold and new ones being built. Maybe the sky isn't falling?
Web Reference: http://Ask4Greg.com
0 votes Thank Flag Link Mon Dec 15, 2008
As JoAnna said, it depends on the type of home you're looking at when it comes to "give" in the list price. If a home owner needs to sell they're going to be a lot more realistic in pricing their home.

Get a good agent in Monmouth County who can give you the information on what's closed and how close to list price the sale price was. There is a great selection of Monmouth County agents here on Trulia, and many have submitted answers to your question.

Good luck, hope you're FOUND soon!!

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Mon Dec 15, 2008
Hi Lost in Relocation, first off I love your "handle" - I'm working on a deal or two where I feel "lost in relocation" myself. In any case, to the question at hand....

Your agent should provide you with a pricing analysis for any home under consideration - that analysis will provide a probable sale price range based on current market conditons. In addition to providing you the input you need to determine your pricing strategy, it supports your offer. I always say to the buyers I work with, an offer than we can substantiate with facts is hard to deny. Essentially it allows your agent to introduce your offer with "....let me tell you why we believe our offer is a fair one."

As you well know, the process is an emotional one - and in this tough declining market we are in, it is especially so for sellers. Armed with the facts of the market, your agent will be able to finesse most situations. If a seller does not respond to an offer that can be sustantiated, then that seller may not "get it" but in most situations I am finding that they are coming around.

Success depends on all parties in the transaction - realistic sellers and buyers, and also agents who are committed to working to bring the parties together.

With the right resources you'll find your way out of the maze that has you feeling lost at present. Align yourself with knowledgeable and dedicated professionals and you'll do just fine.

Best,
Jeannie Feenick
Search and connect at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sun Dec 14, 2008
Dear Lost,
I feel your frustration. However, every seller, area, and motivation is different, therefore difficult to be to general in answering this question. This market you may find if the seller is ready to move on, the home is priced right for the current market conditions, it is likely to find that a seller will be reasonable and fair in making a deal with a ready and able potential purchaser to sell their property.

Buyers also have to be fair in making their offers. It has been my experience lately that buyers will try to make low ball offers to test the seller as well. That technique never works well for either party in any market conditions. It is a buyers market right now but overall if a home is listed with an agent, they are on top of what the market range is for a particular home in a particular area, so they are usually prepared when the offers do come in.

Fair and reasonable on both sides usually makes for a WIN/WIN situation for both parties. Good Luck in your home buying. If there is anything I can do to help you, don't hesitate to send me an email or call me direct. HAPPY HOLIDAYS......
0 votes Thank Flag Link Sun Dec 14, 2008
Motivated sellers are ALWAYS more reasonable than people who list their home to test the market! The key is finding which sellers are really motivated and which are not.

As far as seller's being more reasonable now, as opposed to say 6 months ago, I believe that is judged more on a case by case basis. One would have to be living under a very large rock to not understand that market values have come down. Of course, some areas have been more affected than others.

As for "give from list prices", I would look at where homes are closing compared to list price for each specific town, as it differs widely depending on the price range and area where you are shopping. Luxury homes may be closing 10% less than asking price, where townhomes may be more like 3 or 4%. Are you focused on Tinton Falls? Price range?
Web Reference: http://www.JoTheRealtor.com
0 votes Thank Flag Link Sun Dec 14, 2008
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