The other agents have all provided you with excellent advice. As a top team, helping over 40 families with their real estate needs in this market area this year alone, let me chime in with mine.
Our local MLS shows there are currently 101 active listings in Roswell in just the 500-600k price range. It also shows that in the last 60 days there are 11 recorded sales. The sales indicate 18.3 months of inventory average for the last 60 days. There are currently 5 properties under contract. Two of those went under contract in the last 30 days. The 2 pending sales in the last 30 days would indicate over 50 months (4.1 years) of current inventory in that price range and area and that the market is continuing to slow. Yet the properties that have sold are showing an average of 96% SP/LP ratio. Only 4% off the list price.
The most recent MLS statistics from August for our entire market area continue to show a decrease in total sales, and increases in time on market, total inventory on market, number of listings that expire without selling and number of listings that were withdrawn from the market before selling. All that being said, we are still experiencing a very solid 95% to 96% SP/LP average in our market area. This would indicate that the homes that are actually selling are priced in a marketable range.
I have handled quite a few transactions this past year where an original offer was at or below 10% of the current list price. In handling the Buyer side we normally ended up settling around 3-7% below list price. On a couple we did succeed in buying the home at 8-10% off the listing price. This was almost always because the current list price was farther out of line with the current sales prices and we were able to support our offer with recent comps.
Again, as the other agents have stated, it is hard to give an opinion without all the facts. Your proposed beginning offer of $510,000 is 15% below the current list price. It is more likely that that will be rejected outright or create a less than optimal negotiating environment. This could end in you paying more for the home if and when an agreement is finally reached.
Using an experienced, Accredited Buyerâ€™s Agent is probably your best course of action in this shifting market. Make sure they have recent sales activity in the area and know the current market conditions well. Their market knowledge, transaction management and negotiating skills will often save you more time and money than the fees they charge. And these fees are generally paid by the Seller anyway.
Andy, I hope you found this information useful and good luck in your first home investment. If there is ever anything our team can do to help just let us know. You can always find us at http://www.keyhomefinder.com .
Have you been able to look at any comparable properties that have sold recently? Is your Realtor suggesting a price/negotiating strategy for you? I think it's more about looking at your end price - and the homes value (via comps) that determine where you should start - going in too low can have them reject your offer altogether - If you can send a preapproval letter showing you are qualified to purchase, it may send the signal that you are qualified, but feel the home's value is closer to offering price.
I hesitate to give you a direct answer without more information - I would suggest that your Realtor should look at ALL the information available and discuss a strategy with you
If you are not using an ABR (Accredited Buyers Representative), and if you have not signed a Buyers Agency Agreement with your Realtor, then your interests are not protected by law in Georgia. For more information on Buyers Agency please take a look at my "For Buyers" page on my website at http://www.jane-oconnor.com. Feel free to contact me if you have any other questions or wish to follow up. Good Luck!
It's worth noting that not ALL areas of Metro Atlanta are depressed. In my experience, homes in the higher price ranges in Metro Atlanta are actually thriving, as the typical buyer in this price range is not affected by the mortgage meltdown.
10% as a general rule is a very high number to assume ANYWHERE in metro Atlanta. The actual numbers are closer to 3% to 5% for most of Metro Atlanta.
Remember, you don't hire a Realtor to find you a home, that's just a bonus if they do. You hire them to get the best deal on the home and to navigate and manage all the details leading up to the closing.
Once you have figured this out now you know what price you are willing to pay for it. Next (this is where an agent can help by doing a market analysis) determine what you feel the home is worth based on comps and offer that price or a bit below the price.
My first take (remember, without doing any kind of market analysis) is that would not be a good first offer. In Atlanta most homes close at 97% of the list price.
I suppose to really answer your question depends on whether or not the house is priced right to begin with.
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I have got to say you have gotten all your answers below which are all very accurate. For one thing the Atlanta Market has not been hit as bad as people think, sometimes the media blows things out of proportion. If you do not have an agent currently, please get one. They are there to protect you the buyer, to represent, negotiate and get you to closing. Your agent will pull comps for that specific neighborhood for you and advise you of what the beginning offer should be, of course the final decision is always yours but again as noted already putting in an unreasonably low offer will most likely get a rejection. I would also agree that 10% is way too much even in this market, 3% - 5% is more realistic but again this is not the same for all areas of Atlanta and that is why you need the expertise of an agent. You do realize that you do not pay for buyer representation under most circumstances, it is normal for the seller to pay the commission unless working with a For Sale By Owner, then it is negotiated.
If you need anything else please feel free to email me and you can also visit my website for more information