70% off is a great price, and I wouldnt expect an unMotivated Seller to accept that discount. If you want a deal like that, you need to target Motivated Sellers or properties in need of lots of repair (few buyers).
Wow. Where do I start? Because theyâ€™re priced at X price means that theyâ€™re priced according to current market conditions? What are you basing this on?
And please explain to me, in your capacity as a RealtorÂ®, why I should be worried about paying off the previous ownerâ€™s mortgage? How does that enter into my purchase equation? And Iâ€™m asking that as someone who bought a condo wherein the seller had to come to the closing with a checkâ€¦
Bay said, â€œâ€¦but not at 30% reduction in price. That could be insulting, and you probably won't get a counter.â€
Jesh. Here we go again thinking that sellers are going to be insulted by your offer (and interest) in their house. These days, if youâ€™re not â€œinsultingâ€ the sellers then youâ€™re offering too much!
Bay said, â€œNot all sellers are desperate in this market and you don't want to insult their intelligence.â€
The seller owns two adjacent condo units. The seller is most likely a failed flipper/speculator. Hasnâ€™t the seller already shown that he/she is both desperate (selling two units simultaneously) and stupid?
â€œNo one in this world has ever lost money by underestimating the intelligence of the great massesâ€¦â€
Now, I tend to agree with you that you can ask for a discount if you're buying both. Although Lori's correct that the transaction costs on the two units will be double that for one, you are offering the seller something of value: The opportunity to sell both condos at once, rather than selling one now and waiting 60 days, 90 days, or more for the possibility of another sale. As the saying goes, "A bird in the hand is worth two in the bush."
This is a situation where you really have to strategize with your Realtor. And you have to attempt to determine the seller's motivation, as well as how much equity he/she has in the property. As Bay observes, if you offer so little that it won't even pay off the mortgage, your offer won't be accepted.
However, don't worry about insulting the seller. Worry about making an offer that works for you.
As for the point that properties sell at, say, 95% of their listing price--don't worry about that, either. For instance, suppose the condo starts off priced at $100,000. After 30 days, it doesn't sell and the owner reduces the price to $95,000. After another 60 days it still hasn't sold so the owner reduces the price to $92,000. Then it sells for 95% of $92,000...or $87,400. But, notice, that's only 87% of the original listing price. And let's take this a step further. Suppose there was a 3% seller concession (to allow for a no-money down FHA loan) or a 3% contribution to Nehemiah. Seller concessions don't show up as a price reduction. Net to seller before any expenses and commissions would be $84,778...or 15% down from the original listing price. Yet the statistics would show a sale at 95% of the listing price.
So: Figure out what the condos are really worth in today's market. Factor in anything you know about the seller's motivation and/or the amount owed. Reduce that number a bit for negotiations and for the benefit you're offering by buying both at once.
I have no idea what that number might be. It might just be 5% off from the current asking price. Or it might be 20% or more. But that's not the point. The point is: Do the calculations. Make sure you know the values. Then make an offer that works for you.
Hope that helps.
15% off due to market conditions? Don't you think market conditions were taken into account when the places were listed? Are both condos of the same value? Same condition? This seller has expectation of selling their condos for a total of $200,000. We see a list to sale ratio in the high 90's , usually 95% so to expect them to reduce to $144,500 or $162,000 would probably get you the response from the sellers to keep on looking. Are you using an agent? You should be so you have a snowballs chance in getting these places. Your rational is not correct and if you really want these condos, you will have to seriously reconsider
Coldwell Banker (Madison CT)
Yes depending on your local market if it is slightly down you might get it. Although depending on financial situation of the seller if you go to low you may risk insulting the seller and then you are out , they may not even counter. Definitely use your calculations to back up your offer. Sometimes it does help to persuade the seller to your viewpoint. Also talk to your agent and ask their advice they might have some insight into the situation.
Coldwell Banker Triad