Just as a point of reference, over the last 3 months single family homes in Newton are selling like this:
$350,000-$399,999 136 average days on market and selling at an average of 91% of list price
$400,000-$449,999 50 average days on market and selling at an average of 94% of list price
$450,000-$499,999 91 average days on market and selling at an average of 98% of list price
So, your offer would definitely buck the trends. That's not to say this situation isn't unique and maybe the owner would be open to considering lower offers. You should just have a sense of what the recent history of sales transactions has been. And as a certified real estate appraiser, as well as a Realtor, I can't agree with the other answers more by stating that researching TRUE MARKET VALUE is the best one to formulate AND support whatever offer you make. Good luck!
So, it is an A+ buy from buyers' point of view, but very hard to get. e.g. I was the only A+ given at Abstract Algebra at UC Berkeley that year out of several hundreds students. They seldom give A+ to students.
So, if you are a seller, you need to list your home 17% more than what you want to start with and let the buyers to "chop" your price at lots of room and feel great about it and of course feel saving!!! Then, you will drop drop drop and eventually, it will sell at a ratio like 97%.
Go to an auto dealer tried to make an offer of 83% and do not be afraid that they will kick you out because they will sense immediately the A+ buyers show up. But, do not try to entertain offer lower than that, as a buyer ...
So, want to be A+ buyers in current market? Go out to see 3 to 5 houses each Sunday, and at the end of the day, make 3 offers to 3 best matched homes at 83%, and tell your realtor that you would buy the first one willing to sell you.
Continue doing so, you will be so excited to eventually HIT ONE you like at the price that thrill you ...
Write The Offer! Enough Already!Maybe Accompany it With A Handwritten Letter Introducing Yourself and Your Family To The Seller's,What You Like About The House,How Long You Plan To Stay There Etc.Some Times it is Not ALL About the Money.Thank You,
Peter, i wish everyone thought like you! I could say that we are first time homebuyers and have 2 kids, one of which we dont want to switch her school and the other who will be starting school soon, however, i do think it is all about money!
I think it's difficult in the Newton market, prices could range from 399,000 to over 1 million so i think to go by recent sales isnt easy!
My next question, does assesment matter at all?
Sorry, I seemed to have bored you (Blah... Blah... BLAH...) with those stats. Understanding you are an "exclusive sellers' agent" focused 100% on working strictly with sellers, I can see why you would encourage the buyer to just "write the offer". I was merely trying to provide Tanya with a perspective of what is actually happening in the current market in Newton. My background is in real estate appraisal. I have personally appraised over 1,500 single family homes in Massachusetts, so I tend to approach transactions from an analytical angle at first. Yes, I understand that sometimes it is NOT all about the money and handwritten notes and flattering soliloquies can sometimes make a difference. I just wanted to give Tanya a framework of what the last 400 or so single family properties have actually sold for in Newton. I think you'd agree that would be good information for buyers to have.
The_Bayou: I gave you a thumbs up for clarifying Dr. Yun's position. Important difference you pointed out.
Newton is a tough market. You will see homes that you believe are not worth close to the asking price, but they sell within 10%, often within 5%. People line up for the opportunity to buy into that school system at a low price. You will see extended families cramp into a three bedroom cape so that all the kids can use the schools. Never underestimate the value of a good school system.
Being on the market for 55 days doesn't mean too much one way or the other. Houses are taking longer to sell, and 55 days in most markets is less than average. Even if the days on market were much longer--say 200 DOM--that could mean a number of things. On the one hand, maybe the sellers would really be motivated to sell. On the other hand, maybe they're stubborn and holding out for "their" price.
I do disagree with Myke on the termite contract. In some cases, people simply have termite contracts, whether or not they have termites. And even if the property did have termites, termite damage is repairable. Sometimes it's expensive, sometimes it's not. Depends on the extent of the damage. Obviously, have a home inspection done. And have pest inspection, too. But that alone wouldn't stop me from making an offer. (In fact, anything that scares off other buyers that's fixable--up to and including structural problems--is great. Just so long as I know how much it'll cost to fix, I can factor than into my offer.)
So, determine the property's real value. That's your ceiling price. Make an offer somewhere below that.
Sellers do not nessicarily base thier asking price on the home's actual market value. They base it on - "how much do i still owe the bank? can i get enough money out of this to pay off my car loan too? can i push it enough to get the money for a bigger down payment on my next house..."
Instead of looking at the asking price - you first have to determine whether or not the asking price is even reasonable given your specific market. You need to look up similar homes in the immediate area that have recently sold - look at what they sold for, how long they were on the market, etc - and try to place this home in comparison to those. Typically - this is what an agent would help you with.
Also - "too low" - is a completely subjective term. Some homeowners will be offended at anything other then the full asking price. Some people will say "this house was paid off 10 years ago, and anything's profit - i just want to be done with this". Who knows. Your best strategy is to price the home for the market you're in, and be able to have the data and the confidence to back the offer up if/when it's countered.
Just curious--not criticizing--where does the 83% come from? I'm interested in the negotiating aspect (I highly recommend Roger Dawson for those interested in negotiating techniques)--can you provide more information on 83%?
Based on current MLS data, there have been 388 single family sales in all of Newton over the last 6 months. The average sales price to most recent list price ratio is 97%. Not sure where you're getting your 83% "psychological threshold" figure from, but it doesn't seem to be applicable to the current Newton market. Even sales price to ORIGINAL list price ratio is only 93%...Considering very few, if any, buyers are paying OVER list price, I would venture to guess that with an average 97% sales price/list price ratio, NO ONE in Newton paid 83% of list price in the last six months.
Are you suggesting that of the 388 parties that bought in Newton over the last six months, NO ONE got a good deal?!?!? I'd have to vehemently disagree.
That is very interesting, and good to know. I was doing a similar analysis on my local market, but on a much smaller scale. I was looking at homes sold within the last 2 years in specific neighborhoods. What I found was that most homes sold for about 97% of the ending list price. But, many of these homes had been through several rounds of price reductions from the original list price. It was as if there was some type of psychological value to receiving an offer of at least 97% of what you were asking for, even if they had to reduce their price to get that offer.
I have studied hundreds of thousands of sold info, and 83% of listing price is about what a buyer can obtain the best price. Otherwise, you just need to wait.
This is also true for buy a car from dealer. If you ever bought a new car at auto dealer around 83%, you are an A+ buyer.
To clarify, I believe Dr. Yun is the chief economist for the National Association of Realtors, not the National Chief Economist.
sorry to be the bearer of bad news, but if this is the house on Mosman St., you should know that MLS shows it has had an accepted offer since 5/13. The buyers are likely in the post-inspection / pre-P&S stage at this point. The property in MLS is denoted as Active-"flagged", meaning that it can still be shown 'for backup offers' in case the first deal falls through ... usually this status will change to "Under Agreement" if/when the P&S is signed.
Good luck with your search!
Prudential Howe & Doherty