Question Details

JKB, Home Buyer in 33019

As a buyer, how do we interpret the confusing world of unrealistic seller asking prices?

Asked by JKB, 33019 Tue Sep 23, 2008

We're currently house-hunting (we're happy with our realtor), and have been actively analyzing recent sales of houses in our areas of interest. Honestly, many of the asking prices for similar homes are just simply unrealistic (don't these people have real estate agents that help them price their homes appropriately?). It seems silly to offer 100-150K less than the asking price on a 500 K home, but we have found several instances where that is what comparables went for, and now it seems if that same house stays on the market for longer, they will be worth even less, since several forecasts suggest that the market will continue to decline another 10-25% in our area over the next year-which could translate into a loss of $100 K if we aren't aware of our market conditions.

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Have your Realtor call the Selling agent and point out the obvious. I am sure the comps were from when they bought and are upside down in the house BUT they have two options 1. Dont sell right now 2. Take the hit
Because if they don't do one of the two then they will be forced to go with the next few options which looks something like a short sale or even Foreclosure. If their agent has not advised them of this then it's possible that he/she is not a "great" Realtor.
0 votes Thank Flag Link Tue Sep 23, 2008
Some sellers seem to think that they can will prices up. They price it high and it just sits on the market. I am seeing this in my market also. I am triee to negoiate a home that me and my realtor both feel is priced significantly above the market. The seller simply won't budge even though the home has been on the market for a year and a half.

Oh well. We will find another.
0 votes Thank Flag Link Thu Sep 17, 2009
Try to limit your searching to foreclosed properties. This way there is no unrealistic people involved. The high priced houses can't sell for less, the owners don't have 150K to bring to closing. They will be a future foreclosure. Be patient.
0 votes Thank Flag Link Tue Sep 23, 2008
Cheng, that is completely ridiculous. Of course people are pricing unrealistically. Just look at houses that have sold in the areas you're looking to buy and compare those to asking prices. In this price range and the neighborhood we are looking for, they are anywhere from 50-250K less than asking. As an example in the past two months in our neighborhood, a house listed for 500 K sold for 457, but another house that was asking 650 K sold for 410 K.

As another measure, just look at the changes in selling prices from the last quarter to listing prices. Selling prices are down from 10-45% in the areas we're looking at, and listing prices are almost exactly the same. Obviously, there's a disconnect somewhere.
0 votes Thank Flag Link Tue Sep 23, 2008
Firstly, do not believe those forecasts since no one can tell the future, and most forecasts end up not true any way. If you believe you and your family deserve a home and can afford one, you should go ahead to search, say, visit, dozens of candidate homes in order to find the best one that you all love.

Secondly, all listing at MLS are priced correctly by licensed realtors who get no commission if they do not price right, even worse, they may end up lose their marketing expense and time and effort if they overprice their listing. So, you should not doubt the listing prices. When listing agents doing market analysis, they all based on current market sale, and they are the people got the first hand info.

Thirdly, it is really silly to try to offer 100-150k less than the asking price on a 500k home. Why? because no only it makes you, the buyer look inserious, but also make your agent looks unprofessional. And the fundermental thought of this is that if a house worth $500k with down payment 20%, there are still $400k mortgage, do you think buyer would want to come to money to closing table with money they save for down payment of next home? No!

Most people listing their homes are because they want to take advantage of the collapsed mortgage http://www.bankrate.com/brm/graphs/graph_trend.asp?product=1… and move up to bigger house http://riverheightsestates.blogspot.com/ but they want to play safe and sell before buy, that's why you see many listing. However, if they do not find a reasonable buyer, they would just stay where they are and take off market.

So, it is a great chance for everyone to move up to bigger home, but if you find your dream home out of many choices and make a stupid decision based on what those dishonest TV forecasts, and you may end up NEVER able to live in a home at the great location you and your family always dream about.

So, based on YOUR need and the value of the home to YOU and YOUR family, NOT other nonsense. Good Luck!
0 votes Thank Flag Link Tue Sep 23, 2008
Some of the homeowners may not be able to lower their prices. They may owe 100 - 150k more on their homes than they are worth.

Your comps could be coming from homeowners who had bought before the housing bubble.

This is a just one possibility.
0 votes Thank Flag Link Tue Sep 23, 2008
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