I'm interested in buying a house in Lexington that has been on the market for over 100 days. How much should?

Asked by D, Massachusetts Sun Jun 22, 2008

I offer? I see that Newton was selling for 91% of listing price if on market for more than 3-4 months. Thanks

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Lowball’s answer
Lowball, Home Buyer, Low Ball, NJ
Sat Jul 19, 2008
Jeez, just stop listening to all these realtors and offer on the very very low end of what you think the house is worth. They all just want a piece of your action, they are out for a commission and NOT out to help you so ignore them and use your own brain.
1 vote
trulia, , Lexington, MA
Thu Jul 10, 2008
Hi D.

As you can see, there are many variables that affect the offer strategy. Realtors are privy to the incremental price changes and possible motivations behind them, especially if they are local full-time agents in the same town. Last I checked, most sales were within 95% or better of their original asking price (not dropped prices) in Lexington (where I am based). It is especially true in such hot price ranges as $650-800k.

Good luck -- Bill
1 vote
Marilyn Mess…, Agent, Concord, MA
Wed Jun 25, 2008
Hi D, There are two ways to buy or sell a house. With representation and without. With representation you have an agent who works for you -in this case a Buyer Representative/Agent. That person should be an expert in the local market where you plan to buy - trying to do this on your own by comparing Lexington to other towns is not going to work. Every market and every house has it's own nuances and a professional with know what they are. I highly recommend that you sign up with a buyer agent. Make sure the agent is an Accredited Buyer Representative (ABR) and also look for a CRS - Certified Residential Specialist. - these are brokers/agents who are in the top 3.5% of all REALTORs nationally. Anyone can call themselves a buyer agent - you want someone who has the experience and education to represent you properly. If would like a recommendation for someone in Lexington -let me know. Good luck, Marilyn
1 vote
Abner, Home Buyer, Concord, MA
Fri Aug 7, 2009
Actually, it's fairly simple. If the house is listed above $550/$600k that means most people who are looking at buying it have to qualify for a jumbo loan (harder to get, require larger down payment, etc...) In that territory, sellers are being forced to be more flexible. In that case, you can use a site like zillow to determine roughly how much prices have appreciated over the last 10 years. Take that level of appreciation and knock the current price back to about 2003 or 2004 and you are in a rough ballpark for fair value. I personally think the market will have to go back to 2000, 2001 in Boston, but in Lexington no one will sell at those levels today.

Under $600k, it gets a little more complex because the inventory is tighter, loans are less expensive, and an increasing number of people begin to qualify for tax credits. All of this serves to buoy prices. I've also noticed sellers who bought prior to 2002 are generally significantly more flexible on pricing over those who bought between 2004 and 2007 as the earlier ones are still getting abnormal returns and the later ones will take a hit.
0 votes
Nervous, Home Buyer, 02215
Tue Jun 24, 2008
Lexington is a very prestigous community. I would not expect much of a discount there.
0 votes
Christopher…, Agent, Woburn, MA
Tue Jun 24, 2008
D,

Is there something wrong with the property or location of the property? Please keep in mind that Lexington and Winchester have many superior school districts that can effect the price. What are the comps in the neighborhood?

Chris
Lawton Real Estate
0 votes
Territory.c…, Agent, MA,
Sun Jun 22, 2008
Here is the short sale property i was referring to:
http://www.territoryre.com/idx/listings/70727176/details.html
0 votes
Territory.c…, Agent, MA,
Sun Jun 22, 2008
Mistype correction:
The average sale price to listing price ratio is 97% which means on average single families are being discounted 3% from listing price. The sale price to original price ratio is 94% meaning properties are being discounted on average from the original price about 6%.
Web Reference:  http://www.territoryre.com/
0 votes
Territory.c…, Agent, MA,
Sun Jun 22, 2008
If I knew the property you were interested in that would help a lot as days on market can sometime be toed to a bad pricing strategy rather than value of the property. Is the property fully upgraded? Is it bank owned?

I took a look at all the properties on the market in Lexington for 100 days and there is one in the high $600's that is a short sale meaning subject to third party approval and if it is this one then that explains why it is sitting on the market. Short sales are very difficult to deal with and rarely close.
Newton and Lexington are different towns so you are better off using the statistics in Lexington when trying to determine price.
Lexington is a very hot market with 320 single families havind sold in the last year with and average days on market of 102 (putting your property of interest close to the lexington average). The average sale price to original price ratio is 97% which means on average single families are being discounted 3% from original asking price. The sale price to original price ratio is 94% meaning properties are being discounted on average from the original price about 6%. Depending on what price range the house is listed in will change these statistics a little bit as some are much hotter price ranges than others.
I hope that helps for now. If you need more help you know where to find me ;)

(and definitely hire a buyers agent to help you)
0 votes
D, Home Buyer, Massachusetts
Sun Jun 22, 2008
Thanks Cameron. They have gone down $100,000 or 10% since first listed. Still no bites. Just not sure where to start...
0 votes
Cameron Piper, Agent, Forest Lake, MN
Sun Jun 22, 2008
D,

Don't try to force this into a mold using statistics and formulas. What you should offer for the home is what you feel the home is worth. The only way to know this is to see a bunch of houses, hire a realtor, and looking at similar historical sales. There is no magic number and what this house is worth has nothing to do with what other houses are selling on the list to sale ratio. It is possible that all of the other properties were overpriced. It it also possible that this one is only worth 75% of list price. The only way to know is to do the hard work of educating yourself on the market.

Failing all of that, the house is worth what you feel it is worth and are willing to offer. You and the seller will quickly discover whether you have common ground. I hope that helps.
Web Reference:  http://www.campiper.com
0 votes
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