Home Buying in 11780>Question Details

Donna, Home Buyer in Saint James, NY

I have made 5 offers on houses, all using comps; all refused.

Asked by Donna, Saint James, NY Tue Mar 25, 2008

The sellers all refused to acknowledge that their homes were not valued at the recent (3 month) home sales within their immediate vicinity. The offers all ranged from 10-20% below the asking price, which reflected that the houses were grossly overpriced. My buyer's broker seems uncomfortable using the comps as the basis for the offers. She seems to want to keep all offers within 5-10% of asking prices. She has stated that Long Island (Port Jefferson, Stony Brook, Setauket, St James, Mt Sinai, Miller Place) is not a buyer's market, as these locations exist in a bubble, and have not been affected by the subprime crisis. I'm frustrated and confused. I want to purchase a home, but not at any cost. What is the current status on offers (what percentage of listing? are other agents using comps when presenting offers?) I am in the best position to buy -- excellent credit, 10% down, renting. Thanks!

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Hi Donna,
Thanks for the additional info. If your offers are based on solid data and comps, I suggest you continue the same efforts, and you will find a property. It's possible that even one of these 5 sellers may come back to you and be willing to talk further. Ask your agent to keep the door open and make it easy for the seller agent/seller to come back to the table. The sellers, at this time, believe that another buyer is out ther who will pay them higher. If time proves that theory wrong, some of those sellers will adjust their expectations and some will simply go off the market. While it is frustrating, stay calm and stay on track.

The amount that a seller "needs" does not determine value. These little words speak volumes about a seller focused on what they "want" vs. looking at reality.

In order to buy the new car that I want, I "need" to get $22,000 for my car. The fact that my car is only worth $9,000 will prohibit me from ever finding someone to meet my need. Markets dont' perform to meet the "need" of a particular buyer or seller. Some sellers (and buyers) don't grasp that.

S If you are using solid comps that are valid comparisons, stay the course, stay calm, and leave the door open for any seller to reconsider. Meanwhile, proceed on your search for new opptys. Good Luck!

Deborah Madey - Broker
Peninsula Realty Group - New Jersey
5 votes Thank Flag Link Tue Mar 25, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
I price all of my listings based on 3 months of comparatives sales. Houses that are actually sold above those numbers (if it happens, which I doubt) will NOT appraise and buyers will be refused mortgages.

Homeowners need to decide if they are committed to selling or committed to a number. I only work with homeowners who are committed to selling. I am in Long Island and this IS a buyer's market.

You are approaching your purchase from an educated and sensible direction.
Web Reference: http://GailGladstone.com
6 votes Thank Flag Link Tue Mar 25, 2008
Jeffrey, wow. Homes sell for 95%-98% of asking prices as long as the price is correct? If the price was correct, wouldn't they sell for 100%? Or is "correct" considered between 2% and 5% of the correct price? That would explain a lot about schools today. Also, what decides a correct price? If the comps don't support it, what does?

"That perception of overpaying for a home does not come into play when you look at the appreciation you will receive when you sell." This is nonsense. If you pay 500k for a house today, and in 2 years its worth 450k, your monthly payment is $300/month more using your $6/1k number. If in 15 years you decide to sell and its now worth 900k, wow, you've gained 80%, very nice, although if you had bought in 2 years, you would've gained 100%, and you paid $300 * 12 months * 15 years = $54,000 more for the privilege of those two years. A lot of comments are talking about buying now before prices spike again, but history has shown that prices bounce around at the bottom for a few years before recovering. So when appreciation is the same as inflation, its probably about time to buy.

Also, I know a lot of people like to point to interest rates and use this as why its a good reason to buy, but this is flawed. Interest rates are still low even with recent moves up and with the prime rate having been cut by 3% in the past 6 months, its likely they'll come down even more, so its true rates are good. But if you buy when rates have gone up, you can always refinance when they come down. No one will let you refinance you purchase price.

Zack
5 votes Thank Flag Link Tue Mar 25, 2008
"Also, since you are getting a mortgage, it cost is approx. $6.00 per thousand per month. And if you are losing the home of your dream because of say $60.00 per month ($10,000) or one cup of coffee at DD's per day - cut out the caffeine - it has gotten to your head anyway."

I take a few criticisms of this. First of all, it's hard to believe that anything is the "home of your dream" unless the purchase involved long conversations with the architect. It's more likely just a very nice home that could be replaced by dozens of comparable homes.

Secondly, you suggest that overpayment isn't a big deal, and this might be true if we're discussing $10k gaps on dream homes, but it's quite a big deal on $500k-1m homes that could easily drop in value by 10% or more. As Zack noted, a $50k gap between purchase price and the bottom of the trough is an extra $300/month.

Zack was kind and described that as a $54,000 mistake in his scenario. In reality, if you had an extra $3600/yr for 15 years, you could go out to a nice dinner once a month for 15 years and end up in your situation, except better fed. Or you could invest it in the markets and end up with something a lot closer to $100,000 in the bank.

The market got disconnected from reality because of a combination of your logic, and the greater fool theory of real estate investment, and it will correct as more people recognize that you're simply not correct. The money really does matter.
4 votes Thank Flag Link Thu Mar 27, 2008
Melinda:
Thanks again! I really like the letter approach. I also like the face-to-face, red wine with linguine approach ;)

Barbara:
Your response actually gave me quite a chuckle, as I was amazed with the utter lack of a factual basis for any of your statements:

Barbara said: First, you are low-balling offers for houses in the highest ranking school districts in the nation. Forget it. They'll get their price.

*As stated, all of my offers were solidly within the comps. Therefore, they were NOT low-ball offers. In fact, (as stated) one offer was 5K over the highest comp (yet still 10% below the listing price). Therefore, the listing were OVERPRICED.
**The sellers have not gotten their price, and they won't. (Even if someone offers their price, it would only work as a cash purchase, as the houses will fail to appraise at the asking prices, and the mortgage will be rejected, unless the prices are adjusted accordingly).
***They are NOT the highest ranking school districts in the country, or even the state. (Have I mentioned that I am a statistician?) They are excellent school districts, but some are more legends in their own minds). You may (or may not) want to check your opinions, before you state them as facts.

Barbara said: Second, WHY ARE YOU USING A BUYER'S AGENT? No seller in their right mind will pay that extra point.

*Because I need a buyer's agent to get and evaluate the comps for any house of interest, which then determine the offering price. My offers are based solidly on CMAs for the past 3 months, the same school district, and within 1 mile of the house for sale. This is the only good way to determine what the house is actually worth, according to recent data, and market trends (which are conservatively projected to contract another 5.6% for Suffolk county for 2008, and another 2.8% for 2009, by the way).

**The seller does not need to pay an "extra" point. They should have the seller's agent split their points with the buyer's agent.

Barbara stated: Another possible reason? I have rejected 4 offers for the sale of my house and accepted an offer lower than some because I want a truly qualified buyer. Today's sellers do not want to get stuck waiting for mortgage commitments that never arrive. Any really good seller's agent - like mine - only recommends accepting an offer after fully vetting a buyer. Pre-qualification is the absolute minimum requirement. 719 credit score 15% downpayment is the new standard. Under 719 is considered sub-prime.

*Here's where you provided my biggest chuckles. Where did you get your information, I'm curious? First of all, my LOWEST fico score is (drumroll, please......) 795! (Right back "atcha!)
**15% as the "new standard?" "719 is considered sub-prime?" Not according to my banks. Again, where did you derive this information? Oh, and a pre-qualification letter is not worth the paperwork that it is written on, as only formal pre-approvals involve a complete credit and employment check, etc.
***I got my pre-approval from a well-established (and local) bank. I'm good to go. I'm a seller's agent prime candidate, and I'm negotiating from a position of strength (did I mention that I'm renting?)

Keep living the dream, Barbara! Sadly, seller's attitudes like yours will help to keep us mired in this housing crisis.

;)
4 votes Thank Flag Link Wed Mar 26, 2008
Barbara, wow. I really have to just take a moment to defend Donna here. I am really surprised at your comments. First off subprime does not exist anymore. Secondly, just because a buyer does not have 15% to put down does not make them a bad buyer. I help buyers all day long that get 100% financing. They are not buyers that you should reject just because they don't have the down payment you are hoping for. At the end of the day who cares as long as it goes to closing?

Not to mention you are saying that pre-quals and pre-approvals are nice to see, but they don't mean a whole heck of a lot. I have had buyers pre-approved through some mortgage companies and I even have had a letter in hand that says so! At the end of the day the mortgage company can't pull it off. Every time that happens it is from a mortgage company that I have not heard of, but regardless...I don't put a lot of stock into these letters.

Next I have buyers all day long that purchase and successfully close properties with far less than a 719 credit score. If a buyer can get a loan that is all a seller should be concerned about. As a strong listing agent I will contact the lenders when we have a purchase agreement put together so that I can flood them with all the questions I want answered to be proactive in the sale to make sure nobody is waisting their time.

Last but not least I am surprised that you are telling Donna that she should not be using a buyers agent. That is Donna's choice. Many buyers decide to do that because they want to be represented. Just like I am sure you want to be represented with your selling agent. Keep in mind if there is one agent involved that is called dual agency and the agent has to remain neutral therefore not really representing either one of you in the fullest regard.

I hope this information has been helpful! Best Wishes to you!
Web Reference: http://www.gomelinda.com/
4 votes Thank Flag Link Wed Mar 26, 2008
Donna,

Your a strong thinker and probably a very good negotiator ... depending on what happens in the next few days/weeks or so, you might consider meeting with ~ everyone yourself ..

That means the seller, their listing agent, your agent - and of course, yourself .. I've done it many times with great success ...

You'd be amazed with what gets done between the buyer and the seller when they don't have a translator, I'll bet you didn't know you "spoke" a foreign language .l.o.l.. but, maybe the seller thought you did ..

You'd be stunned on how farther you can get when there's no one there "speaking" for you, it's a wonderful thing what a little red wine and maybe some linguine can accomplish on a face to face meeting ...

Stop and think about this scenario for a moment ...

You're making an offer with a stranger (your agent) .. and they will talk briefly with another stranger (the sellers agent) .. and they'll send a fax with your figures over to another stranger (the seller) ... the seller is going to react (good or bad) to what the listing agent has prompted him with 2 months ago or 20 minutes ago ..

Who knows, maybe your agent is intimidated by the sellers agent.? ... it's common, I've seen it many times..

Remember, it's easier to convince you (the buyer) than it is the seller ... it's been that way for years.!

My question is .. where's the control - and most of all - where's the negotiations.? ... if you're not standing there, do you know what was said last Thursday or even last night..?

If you were trying to get a career opportunity at General Electric or Walt Disney, would you send Aunt Betty or your bowling friend to go to the interview.? - I think not.!

You're trying a purchase a great home and the sad part about real estate .. you have to get all of your information through a 2nd and 3rd party, and even that can be easily diluted or even distorted .... I'm a firm believer in sending in the smartest with the mostest .....

Like General Patton said: "I hate paying for the same real estate twice ..."


Sincerely, good luck.!


: ^)
4 votes Thank Flag Link Wed Mar 26, 2008
I wish Jeffrey would be banned from the 'Real Estate Professional' tag - but sadly, he represents the views of far too many of the so-called professionals. Nothing like telling people to pay too much because it will go up eventually and they're just being greedy by wanting a cup of coffee everyday.

The entire argument starts with an irrelevant premise, 'as long as the price is correct'. Wow - we've just found out that if you try to charge approximately the right price for things, they sell at that price. I didn't know we had Adam Smith answering questions.

Unfortunately, the question was referring to thinking that the homes were NOT priced correctly. If you have the comps on your side, that means there really are sellers who are willing to sell at reasonable prices - patience will find them. Think of it this way - if you're looking at 500K house, the 5-10% savings would be worth 25-50K - well worth the effort of a few more weekends of looking.
4 votes Thank Flag Link Tue Mar 25, 2008
The barrier to entry for the real estate field is very low and with housing going crazy the past few years, this has led to a deluge of agents/brokers/sales licensed people in the market which add little value and detract from the reputation of good agents. So don't be afraid to look around for others.
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A truer statement has never been made! Thumbs up from me. Nobody would be happier to see that lowest common denominator leave the business to those of us who treat it like a business. They hurt us all.
4 votes Thank Flag Link Tue Mar 25, 2008
Alan May, Real Estate Pro in 60201
MVP'08
Contact
Gail,
I can't give you enough thumbs up for the comment. I tried to give you two but it wouldn't let me. :-)

Donna,
Also, you don't want to realtor that just blindly agrees with you also. It doesn't help to have a yes man/woman. If your realtor comes back with solid comps and reasons why you need to be offering more, (I prefer to stay 5-10% with asking is not a reason) you definitely want to keep that person and recommend them to others. The barrier to entry for the real estate field is very low and with housing going crazy the past few years, this has led to a deluge of agents/brokers/sales licensed people in the market which add little value and detract from the reputation of good agents. So don't be afraid to look around for others.

Zack
4 votes Thank Flag Link Tue Mar 25, 2008
I think the other Long Island agents here will agree with me that we have the same trouble at our listing presentations. The last one I did, the seller owed 350,000, the comps showed (and I agreed with them) his house might sell for 325,000. He listed with someone else for 425,000. It's worse in a higher range: I've had comps showing a home will sell for 525,000 and the seller INSISTED his house was special/unique/really nice/private/better etc than the rest and was worth 850,000. Even after I showed him what DID sell for 850,000 he refused to come to his senses. As long as there are incompetent agents to list the unrealistic buyers, there will be overpriced listings. This is why, in my MLS at least, we have 1,600 homes for sale. It's not for lack of buyers--like you, they are out there.
4 votes Thank Flag Link Tue Mar 25, 2008
Zack's argument about overpaying, and the potential of carrying an additional $300.00/month makes perfect sense, and outlines the problem rather well.

But people don't buy and sell homes based solely on logic. Many can't (or won't) wait until the market finds the bottom. Many have to (want to) move now. And not surprisingly many can afford to move now, and will have no problem getting a loan. So they'll sell their current home at a low number, and purchase the new one at a low number. They may (and I emphasize the word "may") end up paying more per month than if they waited a couple of years (depending on their locale and the marketplace there), but in the meantime they'll be enjoying their new lifestyle in their new home those same couple of years, while others wait for the market to bottom.

I'm not saying they're right, or you're wrong... simply that not everyone buys or sells a home based on the current position of the market. Many buy and sell, simply because they need (want) to, and can afford the payments. And since they're in the home for the long term, they don't concern themselves with the yearly ups and downs.
3 votes Thank Flag Link Fri Mar 28, 2008
Alan May, Real Estate Pro in 60201
MVP'08
Contact
Barbara,
Its always good to hear from the delusional sellers. We don't get enough of them on here. Welcome to the fun. Please stick around. Remember, logic, data and reason are your enemy, you have faith your house is worth your price. Faith is all that matters.
3 votes Thank Flag Link Wed Mar 26, 2008
Melinda;
Sorry for being so touchy in my previous response to you. I was tired and cranky, at the end of the day.
Your suggestion to have my buyer's agent present the offer is a good one. First, I need to have a frank discussion with her, regarding her presentation style (per Don's advice). She may not be approaching the offer from a position of confidence, and a belief in the data provided by the comps. That's my feeling, but I will need to clarify with her.
I have, and will continue to, consider a negotiation in terms. However, I'm not going to pay full price (10-20% concession), and have the seller pay closing costs (3% concession), due to a creating a potential negative equity situation, and setting the appraisal up for failure.
I may just ask the seller's agent, frankly, how they derived the listing price (e.g., was it based on "needs" or "comps?" Also, if I run the comps, and determine that the asking price is way out of range, I'll still make the offer, but realize that the seller is probably more committed to a number than selling. So, the offer will be at high risk for rejection.
I'll stick to my guns, continue to rely on the data, use my head instead of my heart, and remain patient.
Thanks, everyone!
3 votes Thank Flag Link Wed Mar 26, 2008
Donna:

Stick to your guns. Sounds to me as if you're doing nearly everything right. You're looking at the comps. You're making offers in line with the comps. You're not being swayed by emotion or by what you or the sellers "need" or "want." Don't get discouraged.

Note that I think you're doing "nearly" everything right. Now, I don't know your specific market, and I don't know your agent, so weigh the following comments accordingly. However:

Is it possible that your agent isn't putting forward the best, most persuasive case to the sellers when you're making an offer? You note that your agent "seems uncomfortable using the comps as the basis for the offers" and wants to keep the offers higher than your numbers suggest. Now, maybe when she's in front of the sellers (she does make the presentation in person, I hope) she comes across as firm, confident, and assured. But maybe, just maybe, she comes across as a bit hesitant, a bit apologetic, a bit embarrased? If she thinks she's lowballing, if she isn't comfortable with your numbers, are you sure she's comfortable and persuasive when presenting your numbers? You might have a talk with her about her method of presenting your offers.

Second, consider getting a bit more creative with your (or your agent's) negotiating techniques. You can negotiate on price AND terms. Scott touches on that with his suggestion that you give them their price, then take (some of) it away on concessions. For instance, ask for the seller to carry back a second at terms favorable to you. Get your agent to run the calculations, but if the sellers carry back a no-interest second for, maybe, 10%-20% of the purchase price, you might be able to offer full price, and yet your real cost would be less than offering a bit less.

And keep negotiating. Those sellers who've rejected your initial offer: Make another offer. Run new comps, and keep your new offer in line with those, using whatever formula and assumptions you did originally. Except: Don't offer a penny more than you did in your first offer. And if the comps are lower, offer less. (If the comps are higher, I'd still not exceed my first offer. Let them know your first offer was the best.) It's a soft market in many areas (again, I really don't know yours, but if those properties are still on the market, it's either soft, the houses are overpriced, or both). After another month or two, the sellers may be more motivated.

Hope that helps.
3 votes Thank Flag Link Tue Mar 25, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Hi Donna,

Unfortunately, even in this market there are still pockets of sellers, and their agents, who have not come to grips with reality. Even though their area may "exist in a bubble" it does not mean that are not affected by this market. This real estate market is unlike any that have been seen before in that it is a nationwide downturn. Not localized. So although that area may not be suffering yet, they will. It's just a matter of time. Hang in there.
3 votes Thank Flag Link Tue Mar 25, 2008
If there were more buyers like Donna, who is looking to buy with her head and is unwilling to be swayed by emotional arguments, then this market would adjust to reality a lot faster.

And, at the end of the way, a reversion to the mean (price) is what will help everyone involved the most.
3 votes Thank Flag Link Tue Mar 25, 2008
Melinda;

Like I have repeated (and repeated, and repeated): all of my offers have fallen solidly within the range of comps. Apples to apples; granite to granite; new windows to new windows; 3 bedroom/1 bath to 3 bedroom/1 bath; same school district; past 3 months; 1 mile radius. It's amazing to be accused of stealing a house. No robbery here. Even willing to buy a fixer, just not willing to pay an extra 70K because the seller thinks the circa 1954 kitchen and bath, and roof, floors, windows, electrical, and plumbing are comparable to the other house on the same block listed at roughly the same price with a kitchen and 2 baths that were renovated in 2005, and with all new (thermopane) windows, new roof, 200amp electrical, etc. Like I said, my offers were refused because the sellers stated that they NEEDED to... fund their retirement, their inheritance, and/or "cover" 100% of the renovations that they completed in 2004. So, I'm not unrealistic. Just patient, and stubbornly refusing to overpay. Oh, and there is no danger of me losing my "dream home" because it simply does not exist, not in my price range!
3 votes Thank Flag Link Tue Mar 25, 2008
Donna,
Having had a similar experience in Westchester county, my advice is to wait for them to come to their senses. If you have solid comps and can read market trends, then you can come up with a reasonable price. The places you've listed are quite far from the city and the majority of employment so to suggest these exist in a bubble and will not be affected is very unlikely. As for your broker, if you're feeling pressure, or don't think you're on the same page with where the market is at, ask them to prove her point to you. If you're satisfied that they can provide sound reasons why the market is better than you believe, good, if you're not, tell them thank you for your time and you'll be seeking other representation. You should definitely ask the broker to lay out in factual reasons, (comps, market trends, sales increases, etc) why these houses deserve better offers. If you're just getting vague things like "I don't feel this is overpriced." or "You can't really compare there, its no close enough." then you need to find another realtor. The case-schiller index came out today and the NY metro area has seen a 1% decline in the last month alone. While you can't take this number blindly and just apply it, it does tell you something about the greater market trends.

Zack
3 votes Thank Flag Link Tue Mar 25, 2008
Dear Donna,

It looks as if the answers to your original question have been less than focussed on the topic at hand. FYI, I am not licensed in NY state and thus I am not here to solicit your patronage. I just want to help you. You should be able to get data on the average sell/ask price from your local board of realtors. Here is Sarasota FL, the data is available online to anyone. Most of the realtors I know do use comps when lsiting houses and presenting offers. This is the only data that you can use. You need to have real comps, i.e. you need to compare properties that are comparables. I agree with you that the most recent comps are the most realistic. anything over 6 months could be vastly outdated. What you should do is be patient and go back to those houses on which you put bids on and resubmit the same bids. Their frustrations and/or lack of offers might have soften them up. I have seen many sellers refusing a bid only to ask us a few weeks later whether our buyers were still looking for a house. Hoping this helps.

Michel
2 votes Thank Flag Link Sun Mar 30, 2008
Gizmo, I am so suprised no one has asked you about being financiable. I do not see how as an agent, no matter buyers agent or listing agent,... how one is not to be in contact with the loan officer involved in the transaction.

First off when I am acting as a buyers agent, financing is an intregal part of the offer. I have to write in all terms. Conventional, FHA, VA, RD, Cash etc. Not to mention several other things like down payment, interest rate etc. I need to have that information from a loan officer.

The other trick to that is I need to know up front what type of loan a buyer is getting. If they are an FHA buyer, then some houses are not going to fly. It helps me as a buyers agent to know what to look for within the guidelines of the houses my buyers look at. Not to mention I do not want my buyers to fall in love with a home that just simply will not meet the guidelines of their loan. If for example FHA is not on the listing card and my buyer wants to see that property, I will call the listing agent and inform them I have a buyer who wants to see the home, but I need to know if the house will qualify for an FHA buyer.

I am here in Michigan where the foreclosure rate is 50% meaning 1/2 of the houses that are selling are foreclosures. When I am writing on those, which happens often at this time, the bank will not even look at the offer without at minimum a pre-qualification letter and sometimes a pre-approval letter, as well as a copy of the EMD (earnest money deposit.) Therefore, it is not even possible to write an offer without having some form of contact with a loan officer.

Maybe I am different than other agents, but I don't feel that it is quality of service not to be in contact with a loan officer no matter what kind of agent I am acting as. Not to mention that many buyers call before they have even spoken with a loan officer and do not even know what they can afford. Therefore, I will refer them to some of the loan officers I have worked with in the past.

I hope this helps clarify for you why an agent needs to be in contact with a loan officer.
Web Reference: http://www.gomelinda.com/
2 votes Thank Flag Link Sat Mar 29, 2008
Donna, maybe you should pick the top 3 houses of your choice (the ones who are sitting on the offer) and then send a friend there and lowball them to get these people to come to their senses. Then your offer will look so much better in comparison. And if a seller happens to accept your friend's offer, your friend can just say she was just looking at houses for a friend and give it to you. Just a wild thought.

And I am confused about Barbara's point -- do sellers really look at the credit points of buyers before even accepting the offer? Obviously, Donna doesn't have a credit problem; to the contrary, her problem may be that perhaps sellers aren't even considering her good credit history and are just rejecting her offer downright based on their unreasonable expectation of what they think the price should be. I think sooner or later, Donna will come across a seller who HAS to move as opposed to those who just put it out there to see if what they can get.
2 votes Thank Flag Link Fri Mar 28, 2008
Yes having the same problem in the East End, home owners are not very rational, and when you become one you will not be very rational either. Comps are unpersuasive, the only thing that persuades them is time, let them sit for a few months more and get worried, other people will be offering less than you.

Thats how a recession works: the longer you wait the less you get. As a buyer be patient the national housing crisis is just now getting to NY state in six months your offer would have been too high anyway.
2 votes Thank Flag Link Thu Mar 27, 2008
Sellers have the right to put it out there and see what happens. Someone might buy it -
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You're worried about credit scores? Just wait till the bank appraisal comes by.
2 votes Thank Flag Link Thu Mar 27, 2008
Donna,

I'm with you on this one. I'm looking in the Hamptons and I have made offers on houses that have been sitting on the market for almost a year. Some people just will not budge. They rather rent it out and lose some money on the rental than to sell it for what the comps are saying. The problem with the New York area is that the decline has not really accelerated yet. Many are still hopeful that the market will come back.

I am putting down more than 20% and have a rate lock in already. Financing is not a problem but getting people to sell is. What I have notice is that new construction is taking a big hit. Some builders have to sell and I'm seeing 15-20% cuts. Eventually this will trinkle down to existing homes since the pricing for new homes with the cuts are almost the same as existing homes that need some updating.

My advice is to just keep going. Either someone will hit you or time will pull prices down.
2 votes Thank Flag Link Tue Mar 25, 2008
Donna,

You sound like a very savvy shopper .. you've seen and touched the comps, you're comparing metal to metal and wood to wood and you know their distance and time on the market (60-200 days) - excellent job.!

Like my grand Daddy says, sometimes you need to draw blood to get their attention, you've drawn blood .. now the sellers want to see if anyone else bleeds.

So that brings me back to what I mentioned this morning .. "most sellers north of the Mason Dixon line would be waiting for better weather and the last stages of school to complete itself.."

You can bet an agent has already programmed them into thinking .. " the schools will be out and you'll get ALL the money come spring.." - that thinking was nice 2 years ago ...

The issue for sellers today is (besides bad information from their listing agent) ... there is a lot of smart buyers out there that look hard and also do their research ... and like you, they're not going to pay $400,000 for a $290,000 home ..

So after another neighbor gets a bid or two and another nose bleed, one of these nice sellers will finally get their first epiphany .. now it might take 2 months or it might take 10 months, but it will take .. I know, I've been down this road more than once .l.o.l..

You just need 2 things - accurate information and patience .. you certainly have the info and the patience will save you tons of money.


Like my grand Daddy says: "common sense isn't common ...."


Sincerely, good luck.!
2 votes Thank Flag Link Tue Mar 25, 2008
Thank you, JR!

Donna: I am the one who is tabulating all of the comps from the stratus reports that my agent provides me for recent sales for the past 3 months (a lot of work, but my agent said that there was no way to do this, in Suffolk county),
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There is no way to do what in Suffolk County?
*To create a table for a CMA of recent sales (3 months) for the property of interest. Instead, my buyer's agent sends the Stratus reports to me, then I have to create my own tables for each property. I include in the my columns: property address; date sold; days on market; listing price; sales prices, % difference; bedroom/bath; parking (garage or driveway); condition, and remarks (including size & sqft). This person also says that there is no way to get square footage on any property, as this is not done for homes. So, I type all of this data into my table, determine differences between properties (e.g., new windows/roof/plumbing; electrical; updated kitchens and baths; any other additions, CAC, etc) and determine a price based on all of this data. Like I said, all of my offers have been well within the comps. They are on the low end for fixers, and on the high end for turn-key (I even offered 5K over the highest comp for one home in turn-key condition, then went up another 5K as a counter-counter offer. I was very concerned that the home would not appraise at a price any higher). I will keep looking, and keep using numbers.

As to the comment by Jeffery: Yes, I really want to buy. As I have made perfectly clear, all of my offers were solidly based on recent CMAs for the house of interest. I see no need to buy a house based on what the seller "needs" just as they don't (and shouldn't) care what I can afford. The house should be sold based on worth, nothing else. The market should drive the price, not wants and needs.

Thanks, again, everyone! This has been very helpful!
2 votes Thank Flag Link Tue Mar 25, 2008
Donna:
I appreciate all of the very good comments to stick with the data, and stay the course. I have made it clear that the seller may feel free to re-enter negotiations with me, if they change their minds, later. As a statistician, I crunch numbers for a living, so I will remain focused on a numbers-based (versus an emotion-based) approach in purchasing a home.
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Good plan, Donna. Then you also can tell whether or not a home is way overpriced. Perhaps if you know it ISN'T overpriced, and make a reasonable offer based on that, you'll get responses from homeowners.


Donna: I don't care to lose my 10% down-payment in order to take care of a seller's "needs."
~~~~~~~~~~~~~~
That's good. Seller's don't care about your "needs" or what you can afford either. They certainly wouldn't lower the price if you couldn't afford that much money. Why should you?


Donna: I am the one who is tabulating all of the comps from the stratus reports that my agent provides me for recent sales for the past 3 months (a lot of work, but my agent said that there was no way to do this, in Suffolk county),
~~~~~~~~~~~~~~
There is no way to do what in Suffolk County?
2 votes Thank Flag Link Tue Mar 25, 2008
what is your hurry?
you got $50,000 burning a hole in your pocket?
you need 30 years of debt?

take your time
be patient
this market hasn't popped yet
they're a little behind on things
Cali first
Chicago second
then the east coast gets it

wait a few years
its a big investment
one wrong move could affect you badly for 30 years
housing prices not going up anytime soon


anyways

good luck
2 votes Thank Flag Link Tue Mar 25, 2008
Hi,

Who helped you w/ the comps? Do you have a buyers agent? Did your buyer agent provide the comps and indicate tthat they were relevant to the subject property of the offer?

I do see some sellers reluctant to let go of thier "desired" price. Without knowing the details about your offers and how you arrived at your offer price, it's hard to say why 5 offers were refused.

Did you receive a counteroffer on any? If the sellers declined to counter on all 5, that raises the possibility that your expectations may be for sellers to adjust their prices further than what the market indicators speak. How long ago were these offers?

I have seen some buyers make offers that were substantially below what comps suggested, and sellers simply decline to counter. Other offers that materialized later were higher. The sellers made a good decision to wait it out. What will happen with all 5 of the properties that caught your eye? If all 5 are eventually sold a prices higher than your offer, it indicates that your perception of the market is inconsistent w/ many of the other buyers and sellers in the same market. If all 5 sell at prices near your offer price, you has the unfortunate luck of running into a string of sellers who weren't ready to accept the market.

Deborah Madey - Broker
Peninsula Realty Group - New Jersey
2 votes Thank Flag Link Tue Mar 25, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
i honestly dont working this area, but i believe in any market a buyer should buy thnking to themselves "if i buy today can i sell it tomorrow?" or "the price im buying today can i make a profit tomorrow". there are some areas that the bubble mite not be affecting the neighborhood at least not as dramaticly as others but there is still an abnormal fluctuation in prices. id say move on to the next house but keep in touch because sooner or later they will budge, but make it clear that before they consider anyones offer to contact you because you mite be able to match it, because after all that time and effort you spent you want to draw your conclusions. make sure theyll think of you when they look at that other offer.
1 vote Thank Flag Link Mon Mar 31, 2008
Elvis, For some silly reason, I have a feeling you'd spend the time to qualify your clients instead of going on the hunt for Red October ... but many many don't.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I don't get the "Red October" part, but I'm going to go out on a limb here, and accept that as a compliment. Thank You.
1 vote Thank Flag Link Sun Mar 30, 2008
Alan May, Real Estate Pro in 60201
MVP'08
Contact
My first thought was that you should be going over the comps with your agent before making each offer - especially talking about the list to sell ration for your area. What has sold, at what % of list price, how long on the market, how do they compare to the house you are interested in. I do this for every offer my buyers make so that they are educated on value and can make a good decision about what to offer.

It doesn't sound right that you agent can't get to this info easily. It's possible that their MLS is in the dark ages. Or maybe they are not handy on a computer, or maybe they are new and don't know better. I would have a conversation with them about how important this information is to you. Perhaps there is another agent yours can 'bring in' on the deal to help with this?

Otherwise I would interview another buyer's rep and have them show you what they can provide. If you can't get the info you need to make good decisions from the person you are working with AND YOU CAN GET IT FROM ANOTHER AGENT I would suggest moving on.
1 vote Thank Flag Link Sun Mar 30, 2008
Tman, you're making much more of an effort to sink the realty ship than any realtor themselves could ever do. One wonders why someone would spend so much of their time and energy on this site in order to badmouth one particular occupation. I can't imagine seeking out a site populated by policeman, teachers, auto mechanics, hod carriers, or whatever---and spending all my time there talking about what lazy crooks they are. I'd be banned from the site for being a troll and rightly so. Talk about having too much time on your hands!
1 vote Thank Flag Link Sun Mar 30, 2008
My buyer clients are all preapproved before they get in my car. I don't show properties until I know what the client is approved for (and second to that, what they can afford... just because they're qualified to borrow $400,000 doesn't mean they're comfortable with that payment).

I do not, however, bring that pre-approval to each and every "showing" appointment that we make, nor would I offer any information other than "they've been pre-approved for the value of the properties we've been viewing" to any listing agent who asked me about their finances. I would not provide a pre-approval form, nor any info about their finances, until and unless we were proffering an offer.
1 vote Thank Flag Link Sat Mar 29, 2008
Alan May, Real Estate Pro in 60201
MVP'08
Contact
Tman, it seems you exist to lie or, I'll be nice, exagerrate about real estate agents in your past. When did "all" these buyers come to you with agents who did not prequalify them? 1965? As I said, it's hard to believe an agent will go thru all the motions of showing houses and negotiating to a meeting of the minds more than once only to find that the buyer can't afford it. It's truly amazing, these experiences of yours with so many realtors. Much like Gizmo, who was NEVER qualified by an agent. Never ever ever. How many agents have you been out with Gizmo?
1 vote Thank Flag Link Sat Mar 29, 2008
I'm confused. Why do RE agents have to deal with loan officers? I thought only buyers had to. So far, (I am a buyer) no agent has asked me about my finances or pre-approval or anything. Of course I'm not worried since I have awesome credit history and can make a 45% down payment... but I'm surprised no one has asked me and yet it seems that it is a common practice below by buyer's agents.

Tman, I was not not giving Barbara credit. Please read carefully. I am saying what Barbara mentioned about asking for credit history/approval sounds wise but obviously, these sellers didn't even care as they hadn't asked Donna about her finances. But it was rather presumptuous of Barbara to imply that Donna didn't have a good credit history by grouping Donna with just regular, reckless buyers. Anyway, I am all for sending a bunch of people there low-balling the hell out of these people until they come to their senses. Good luck, Donna. I am in the same boat as you and am even contemplating a 15% discounted lowball!
1 vote Thank Flag Link Fri Mar 28, 2008
Donna - Chaotic times..... Check your sources again. As of 3/25/08 the new prime is 719. Of course you can get a mortgage for less but not at prime rates. I had no idea what your credit was like - I just threw out the possibiliy. I give you that the 15% is not the new standard - although 10% is. It is my standard.

I contracted the sale of my house in November to a highly prequalified buyer. Everyone said no problem. Fica 713, combined salaries near $200,000 Unfortunately underwriters for the lenders are not always informing their application people of their new much more stringent requirements. 60 days later and no commitment. Why? There was a 3 month voluntary break in employment for one of the buyers 2 years ago! Took the summer off and went back to same job. This would never have happened 8 months earlier. If they had more $ to put down it would not have been a problem.

Because I have a healthy respect for comps - and reality - when I put my house back on the market in February, the asking price was $15,000 less than the Novermber asking price. Yes, my new standard is 15% down. I did not go to contract until I knew credit scores, etc. I'm still not quite counting on them getting a commitment.

Do people outside of area know what a buyer's agent is? The Seller gets the listing agent and determines the fee - usually 3-5 points. The listing agent splits the fee with the selling agent who brings in the buyer. The listing agent and the selling agent can be the same person. A buyers agent gets another point for doing exactly what a selling agent does. The difference is that the buyers agent must act in interest of buyer and selling agent acts in best interest of the seller. You can get the comps from anyone of the 3 agents - especially with Newsday providing lists of sales for which you can demand information. Anyone as savvy and educated as you does not need to pay - or raise cost of the property - by an addidtional point.

It is also very ligitimate for the seller to refuse offers for less than they need to get for the house - for whatever reason. Sellers have the right to put it out there and see what happens. Someone might buy it - and they can always stay there or rent it out. I do agree with you however that not pricing well is more than foolish for the seller who needs to get rid of their house. In today's market, the failure to align price with comps means that 30 days later, seller will be reducing price and in order to stay within comps, asking price will be lower than if they priced it right 30 days before.

By the way, which one of the schools you mentioned is NOT ranked in the top 10% nationwide?
1 vote Thank Flag Link Thu Mar 27, 2008
Donna, I just have to say congratulations! You have created a very lively conversation! Although I have only been a member of Trulia for just over a month, this is the best conversation yet going back and forth that I have responded too!

Also Zack I loved your last comment.

Oh yeah! How could I forget? Kudos on your AWESOME credit score Donna!!!! You are an agents dream:) So seriously please, please let me know how all of this turns out! My curiosity is perked!
Web Reference: http://www.gomelinda.com/
1 vote Thank Flag Link Wed Mar 26, 2008
be patient
bubble hasn't quite popped in this area
wait another year
you know the numbers

anyways

good luck
1 vote Thank Flag Link Wed Mar 26, 2008
Second, WHY ARE YOU USING A BUYER'S AGENT? No seller in their right mind will pay that extra point.
~~~~~~~~~~~~~
If you have a buyer, in this market (and I know your market, I am here on LI, too) you should be thrilled that anyone is bringing them. As for the extra point....I'm surprised anyone in this tough market is taking 4% listings.
1 vote Thank Flag Link Wed Mar 26, 2008
Barbara,

Are you saying Donna has weak credit ....?
1 vote Thank Flag Link Wed Mar 26, 2008
First, you are low-balling offers for houses in the highest ranking school districts in the nation. Forget it. They'll get their price. Second, WHY ARE YOU USING A BUYER'S AGENT? No seller in their right mind will pay that extra point. Another possible reason? I have rejected 4 offers for the sale of my house and accepted an offer lower than some because I want a truly qualified buyer. Today's sellers do not want to get stuck waiting for mortgage commitments that never arrive. Any really good seller's agent - like mine - only recommends accepting an offer after fully vetting a buyer. Pre-qualification is the absolute minimum requirement. 719 credit score 15% downpayment is the new standard. Under 719 is considered sub-prime.
1 vote Thank Flag Link Wed Mar 26, 2008
Donna, no apology needed:) I am just trying to help you out. I am glad you liked the idea about having your buyers agent present the offer to the seller. I also agree that you need to make sure that your buyers agent is comfortable with that and has the confidence when she presents as well. If she is not might I make another suggestion. Have her write a letter. (Maybe you can even help her with it if she is willing to work with you as a team.)

I always write letters with my offers / counter offers so that if an agent is not a good presenting agent they can show the letter to the buyer or seller. This takes a lot of pressure off of the listing agent / buyers agent and puts it on me, when they are presenting an offer. Especially if it is not near the full asking price. Maybe even that would help you out.

I certainly agree that the sellers need to realize that real estate has to do with the house and not how much money they need towards paying off a car, credit cards, updates that they put in etc. Updates are a bonus to a buyer that will help sell a property, but is not necessarily going to get them more money in this market. The updates will however, attrack buyers to at least take a look.

Maybe your house has not come up on the market yet. We are around that time of year where people are getting spring fever and are thinking about selling. Not to mention more and more forclosures seem to be hitting the market on a daily basis. There has got to be a motivated seller out there somewhere who understands what it takes to have a successful sale! When you find it you will be thrilled!

I am routing for you! Let us know how it goes. I know I personally love hearing updates! Best Wishes Donna!
Web Reference: http://www.gomelinda.com/
1 vote Thank Flag Link Wed Mar 26, 2008
Donna, I think you took what I said personally. I did not accuse you of trying to steal a house. It was a general statement. I am so sorry that you took it that way. I listen to buyers and sellers all day long. There are many buyers who are looking to "steal" a home. And it does happen sometimes. Not all buyers want a steal, but some do. Other just want a good deal.

I am glad you are comparing apples to apples. I just mentioned that because sometimes I have seen buyers and /or agents not compare apples to apples. I have a better understanding of where you are coming from now. Thanks for the clarification:)

When listing agents are coming back to you and your agent stating the sellers "need" that much money...that really has nothing to do with real estate. I try to be proactive in getting my sellers into reality on those issues, but not all listen. I am really wondering with what you are sharing with me if these houses would even appraise for the right amount of money.

Maybe these sellers have not waited long enough to see what a ready, willing and able buyer is willing to spend on their property. I know you really want to get into something, but perhaps after these sellers have waited longer they will be more negotiable.

Just curious. It is a suggestion. Maybe your buyers agent could ask the listing agent if she could present the offer to the sellers. I have seen this done before and sometimes the buyers agents get further with the sellers than the listing agent can...again sometimes. Your agent could present these apples to apples comparisons to the sellers to explain how you have arrived at your offer. I know one agency here in Michigan that this is part of the purchase offer that the buyers agent has to present the offer to the sellers. Maybe you have already tried that, but if not perhaps it is worth a shot.

We are also getting to that time of year where more and more properties are coming up on the market, so perhaps you will find a serious seller sometime very soon.

I hope this information helps! Best Wishes!
Web Reference: http://www.gomelinda.com/
1 vote Thank Flag Link Tue Mar 25, 2008
JR,

There's also 10,000 sellers out there that heard it from their listing agent over the weekend ...

So .. that should make the world flat - yes.?
1 vote Thank Flag Link Tue Mar 25, 2008
You can bet an agent has already programmed them into thinking .. " the schools will be out and you'll get ALL the money come spring.." - that thinking was nice 2 years ago ...

The issue for sellers today is (besides bad information from their listing agent) ...
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I think you'd be surprised, although you shouldn't be...I find the agents I know tell the truth. No one here is telling them to wait till spring and they'll get ALL the money. Tho we hear that a lot from seller.
1 vote Thank Flag Link Tue Mar 25, 2008
Hi Donna, yes it's a lot of work to do that kind of tabulating, it's great that you can do it. I do graphs, but not of a particular property, I take the MLS data each month and graph inventory, prices, etc. As for the square footage, unless it is new construction or the information is in the public record, she is right, many listings don't contain the square footage. When I was new I used to ask the homeowner, but people tend to exaggerate, and no one likes finding out they've made an offer on a 2900 sq foot house that turns out to be 2400. Good luck in your search! At least when you find something you will know you've made a good decision! As I said, it's just as frustrating to us when seller's refuse to accept the data.
1 vote Thank Flag Link Tue Mar 25, 2008
I appreciate all of the very good comments to stick with the data, and stay the course. I have made it clear that the seller may feel free to re-enter negotiations with me, if they change their minds, later. As a statistician, I crunch numbers for a living, so I will remain focused on a numbers-based (versus an emotion-based) approach in purchasing a home. I don't care to lose my 10% down-payment in order to take care of a seller's "needs." Regarding the average of 10% below listing for all of these areas: differences in percentages may reflect the fact that I am using a different price range. I have not even accounted for reductions in prices prior to close, which would drive the % much lower. I may need to consider another buyer's agent. I am the one who is tabulating all of the comps from the stratus reports that my agent provides me for recent sales for the past 3 months (a lot of work, but my agent said that there was no way to do this, in Suffolk county), then showing my agent my reasons (based on the comps) to stipulate my given offer. No, I have not gotten a better reason to offer higher, just "my gut tells me that x$ is a good price for this house," or "this is a good price, for this town." I feel like I am the only person who is using comps to determine the fair market value of the houses that I have seen! I'm glad to hear that other seller's agents use comps to determine a fair listing! thanks, again!
1 vote Thank Flag Link Tue Mar 25, 2008
Some sellers are just in complete denial of the status of the market right now. This isn't really a solution but what I would honestly do is wait a month and when those five houses are all still on the market, pick the one you like the best and resubmit an offer that is 5k less than your original offer. Assuming the sellers haven't recieved any other offers they may flip out and realize that they should work with you as a good buyer and not wait until another month goes by and your offer goes down another 5k...
1 vote Thank Flag Link Tue Mar 25, 2008
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