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Rob, Home Buyer in Boston, MA

Did I make the right decision walking away from a house that has no closing in sight?

Asked by Rob, Boston, MA Tue Dec 23, 2008

I put an offer for a house in July. It is a fixer uppper. At the time I felt we got a fair deal. The Seller has been unable to close. The P&S has expired more than 2 weeks ago and have been going with a verbal agreement until I finally had enough. The house has not been given a Certificate of Occupancy from the city. It looks like it might not be able to be occupied for at least another couple of weeks. THere are also construction holdbacks until spring.

If I closed in july before the market tanked, i would not feel so bad, because i would have to accept that I am weathering the market. But without taking occupancy, I do not feel that my original offer is still a good offer. The seller is adamantly against renegotiating.

I would love to move into this neighborhood, but I do not think it is worth what it was in July 2008. What do you think?

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3
Hi Rob:

Thanks for posting your question, because we've been running into this a lot lately. I know there is the common belief that the market has "tanked" but it is all depending on location. I am assuming that you were purchasing a single family home in Newton, so I did a little market research.

From January 1, 2008 - July 15, 2008 there were 282 single family home sales in Newton at an average sales price of $870,858. From July 15, 2008 - Today (12.23.2008) there have been a 215 single family home sales at an average sales price of $944,732 [all data was taken from the Multiple Listing Service].

This is actually an increase in average sales price by $73,874, since mid-July. Also, the median sales price has increase by $30,000 ($750,000 to $780,000).

So, although the volume of home sales has decreased the average sales price has actually increase. If this is a neighborhood that you desire to live in and would be disappointed if you "missed out" then I would suggest going forward with your transaction. However, with 110 single families currently for sale in Newton, there are other opportunities available too.

If you want to learn more about the current market, please check out my blog. I try to post Newton, MA market statistics on Fridays but have missed the last few due to the Holiday season. I hope you found this useful and I wish you the best of luck with your home buying process.
4 votes Thank Flag Link Tue Dec 23, 2008
Hi Rob!

I feel your pain! I am saddened to say that I feel that same pain for many of today's homebuyers. While we are all of the mindset that we can get more house for the money......1.) since the prices are low and 2.) the mortgage rates are low.....some of those "too good to be true deals" really are too good to be true.

The advice I give to my buyer clients is this: If you WANT the house, wait it out. We can continue to look for something better in the meantime. There will be a day, however, when the property will become free and clear for purchase. When that day comes, if the timing is right FOR YOU, then you simply sign on the dotted line. While it is hard to keep emotions out of it, this is one case that you really have to!

One other thing to consider: We all know that market is declining. But the market will come back too. If your seemingly unattainable home is in a desirable neighborhood, it doesn't matter that you are paying a little more than TODAY's market value. You will get that back. PLUS, the mortgage rates have gone down so it should all balance out. I HOPE THIS MAKES SENSE!

Best of luck to you!

Judy
0 votes Thank Flag Link Mon Dec 29, 2008
Rob -
You sound highly educated and clear-minded about the process which is a great thing. I think you are making the right decision by holding off. Get the negotiating power back by telling the seller you are moving on. You are right, property values have dropped since July not to mention this is one of the slowest seasons in the real estate market, 2 things that will be an issue for the seller if they try and find a new buyer. Not to mention all the outstanding problems with the Certificate and construction. Tell the seller you are no longer interested in the property at this time and that you will be looking around for other opportunities and if he/she is wiling to lower the price to give you a call. Bottom line is the seller will run into these same issues with new byers so he/she is better off coming back to you with a better price and trying to hold the deal together. Your new stance should get a response. If it doesn't get a response feel confident that you made the best decision by not moving forward with an over priced property with problems.

Hope that helps! Good luck!
0 votes Thank Flag Link Wed Dec 24, 2008
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