If a property is selling for $59; & you find out that the person only paid $1.00-what would be a fair offer?

Asked by Bee, Philadelphia, PA Fri Jul 6, 2007

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12
J Lo, Home Buyer, California Glory, Brentwood, CA
Fri Jul 6, 2007
BEST ANSWER
A fair offer is that which the buyer can afford, what the market will bear, and won't generate buyers remorse.

I know of a home that sold in a neighborhood with homes in the high $300k to $400k range - for over $500k. The buyer had to have this beautifully upgraded home and found it to be a "fair" price. These same homes originally sold in the high $150's.

The buyer was the market for this particular home and lived happily ever after.... Moral of the story: There is a buyer out there for every property on the market - we just have to find them.
2 votes
Main Line Pe…, , Paoli, PA
Sat Sep 1, 2007
What the owner paid for a home is of no issue to you. Even if they got a main line mansion for free, and now are selling it for millions, it does not matter. Greed maked buyers want to punish a seller for making a profit, but, in the end, the home will sell for market price. So lowballing an offer, simply because you don't like the fact that they got the home on the cheap, means you may lose the home to a higher bidder.
1 vote
x, , Philadelphia, PA
Fri Jul 13, 2007
Most likely the property was sold for $1.00 to avoid transfer tax (2-4% of sale price in Philadelphia), usually between family members, partners, and friends. More money may be transferred, but it is given "under the table".
1 vote
Bob Pace, Agent, Riverhead, NY
Thu Jul 12, 2007
What a property sold for has to be follwed by these three questions and lots of research .1;When (how long ago) was this purchase made.2; Was it an arms length transaction(not family ,church or exchange for other property or tax benefits) 3; That there is not a hidden issue that you need to uncover.
If none of these issues play out then obtain the help of an appraisser or Real estate pro to help judge a proper price range. Last and not least if the value is there don't begrudge the seller their due appreciation of value or the great purchase they made.
1 vote
Katherine Sw…, , Philadelphia, PA
Thu Jul 12, 2007
Bee - The City did have a program years ago that sold properties to people for $1, however, eventhough public records may indicate that someone bought a house for $1 doesn't necessarily mean that they bought for $1 or that it was valued at $1 when they bought it. Often a property is sold from one family member to another for $1. Or, if the house was purchase around 1950 or before, for some reason, the City doesn't always have the sales price in the online public records. I have no idea why. I agree with the other answers - any offer is "fair," but you will only get the property if you and the seller can agree on a value for the property. Good luck.
1 vote
Dwayne And M…, , 22554
Fri Jul 6, 2007
Bee,
What a person paid for the property is not necessarily a deciding factor for what you should offer. As long as the house is priced based on market value, that is what the house is worth. A house is only worth market value, so if the market dictates the house is worth $59 than that is fair market value. Unfortuantely sometimes buyers get stuck on what the seller paid for the house as opposed to market trend. An apprasier will also justify the value. IF however, the market dictates the house is worth $40, than by all means offer the $40.
1 vote
Bruce Lynn, Agent, Coppell, TX
Mon Sep 3, 2007
It's always interesting to know what someone else paid, but that doesn't mean it will sell for something else. Best to look at market value. They could have paid more or less. If they paid $70 and the market falue is $59 would you pay $70? How about when you go to sell? If it is worth $70, but you paid $59, what do you want people to offer and what would you take.
Web Reference:  http://www.teamlynn.com
0 votes
Philarealtor, , 19106
Sat Jul 14, 2007
I have to say that what the owner paid for a property has only a small input on what you would offer. Value is individual. What the worth of property is to you and what its worth to me are two totally different numbers. I may need that property to add to my portfolio; you may need it to live in with your family. I usually base my numbers on what works for me. I always have my high/low figures before I make an offer. I usually tell the seller why my number works for me.
0 votes
Robert Rees…, , Texas
Thu Jul 12, 2007
A fair offer would depend on if $59 is higher than the market value or lower than market value, right?
0 votes
J Lo, Home Buyer, California Glory, Brentwood, CA
Thu Jul 12, 2007
When I was a student of real estate (not yet licensed), I posed a similar question to my instructor. He is an experienced agent (successful) and now is a broker. He gave me the best answer to this dilemma - "it doesn't matter".
0 votes
Nancy Parana, , Phoenix, AZ
Fri Jul 6, 2007
Hello Bee,
It is your money, your checkbook, your decision. "Fair" to me means....that which is equally agreed upon by all parties of a transaction. "Location, Higest and Best Use, Economic Contribution," and so may other factors are needed to "fairly" answer the question. Real Estate is a business of negociating. Remember when working with a REALTOR, you are with a partner who, has taken as oath to have your "best interests" as the primary factor in that negociation towards, "fair."
Hope this helps.
Kind Regards,
Nancy
Web Reference:  http://searachhomes.com
0 votes
Bruce Lynn, Agent, Coppell, TX
Fri Jul 6, 2007
Depends on how bad you want the property. If this is a one of a kind, the market is strong, and you're in love with the house pay the market price. If you don't someone else will. Most real estate investors who are normally very price and bargain oriented will tell you about the deal they lost for $1000 that they wish they would have just paid the price. If it is a take it or leave it property that you're not all that excited about, then by all means bid lower than asking. You never know what the seller might take. You might be doing them a favor to buy it quickly. Maybe they need the cash to do something else? As mentioned below, don't get too hung up on what the seller paid. It's always a nice to know, but what you're not likely to know is their circumstances and that can have a huge determination on what they'll ultimately take for the property. Good luck.
Web Reference:  http://www.teamlynn.com
0 votes
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