Home Buying in California>Question Details

In the Market, Home Buyer in California

How does one estimate the correct offering price in a falling market?

Asked by In the Market, California Sun Feb 22, 2009

I am looking into homes in a number of areas, where housing prices have held up against the slumping market but now are just starting coming down. Since they are about 15 years old, repairs and remodel updates are necessary. The standard procedure is to use comparable recent sales and take off some based on the necessary fixes. How much can I consider as necessary -- updating tile to granite? replacing worn linoleum bathrooms? removing very ugly pillars on the interior and exterior? new appliances in the kitchen? updating carpet? -- So, where do I draw the line. Also, as the prices are starting to fall in all of these neighborhoods, the comparable sales will be above value, but what is the best way to figure out a fair offering price? Lastly, I have read about "sellers demand", where sellers will not believe in how much their house is worth. I don't want to offend anyone, but I don't want to offer on something that will depreciate. There was no problem though as housing prices went up.

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Get a good realtor in your area who can pull up statistics for you. Median and average prices. Look at the drop over the last year and also over the last couple of months. You can use that info to try and predict how much lower you should offer. If a seller isn't interested move on to the next home. These days you have lots of options. Market could always level out or turn around depending on perks to new home buyers and rates etc. so try to factor that into your equation. what area are you looking in? If I have info for that area I can send you the statistics.

0 votes Thank Flag Link Sun Feb 22, 2009
You bring up some very good points regarding Real Estate Negotiation.

"Necessary upgrades" would not be Brazilian Cherry Hardwood Floors, Stainless Steel Appliances or Imported Granite Countertops. However, the removal of textured ceilings (asbestos), flooring that might be a hazard (cracked or uneven) would.

I hope you have retained an excellent buyer agent, because this is where we really are of great value to our clients.
A good Agent will know the current market conditions, the market value of the home you are looking at, compared to other similar homes, the neighborhood, and the potential of that property. Your agent will know something about construction also and be able to visualize that home with all the upgrades you might like to eventually add to it.
Your agent will also have an idea of what the seller is hoping to achieve in the sale of their property..thereby..helping to structure your offer in a way that not only does not insult the owner, but creates a win-win for everyone concerned.
0 votes Thank Flag Link Sun Mar 29, 2009
Hi there . This is where an experienced Realtor will be able to help you. You are in the drivers seat but make sure that you gather all the data, have your agent pull all the market comps. Recent sales, review the properties that sold. review the active inventory. Do comparisons with all the sales
If you need any assiatance let me know

Kind Regards
Michael Barron
First Team Real Estate
(714) 552-6817
0 votes Thank Flag Link Sun Feb 22, 2009
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