When a home has been on the market for over a year and it has no problems and the listing price has only just?

Asked by B. White, Raleigh, NC Sun Feb 22, 2009

been reduced from $630,000 to $600,000 and there are several others in the same neighborhood that also haven't moved in the same amount of time, would you recommend not even considering a low ball offer on this property because we would have to resell within a few years?

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Yelena Tsula…, Agent, Morris Plains, NJ
Sun Feb 22, 2009
BEST ANSWER
Hello! I am not is NC, but in NJ. My personal professional opinion, that you should make any offer even if it is a low-ball offer. If sellers are motivated they will talk with you (I think sellers don't reduce price more because they don't want to be "bad guys" in the neigborhood), if not, this is their problem, not yours. Today's market is the buyers market. You are the boss!
Sincerely,
Yelena Tsuladze
1 vote
Jason Graves, Agent, Knoxville, TN
Thu Mar 19, 2009
I'm a little late to the game on this one but I want to share some insight. I recommend this be looked at a couple of ways:
1- A listing to pending ratio consisting of the last 24 months. This is a great way to understand the sales trend for the kind of home you are shopping for since it measures month by month the number of homes being listed against the number of homes going under contract. Are you buying on a dropping trend or an increasing trend?
2- Examine the inventory levels of the kind of home you are shopping for by area/ region you are shopping in. Measure how many homes are for sale against their rate of sale over the past 6 months. You can go back up to a year but then you would be using Spring '08 sales to forcast Spring '09 sales and I don't feel that would give you the best picture. The last 6 months have been the hardest hit so focus on that.
3- Make a list of consumers for the home when you go to sell in a few years. This is guesswork but an important part of your plan.

After all that, remember the seller may not give a hoot about statistics and will just be focused on the bottom line, money. You can try all you want to coax them to sell low but that doesn't mean they will.

We have used this strategy a few times this year and we have been very successful. You can read more about it at http://www.RaleighRealEstateNews.com.
Web Reference:  http://www.jasonbgraves.com/
0 votes
Melissa Albe…, Agent, Wake Forest, NC
Mon Feb 23, 2009
If you really like the house and the neighborhood, it fits all your needs and wants, I don't see a reason why you shouldn't make an offer. It's hard to determine what will happen anywhere in a few years. You never know what situation the sellers may be in and how willing they may be to negotiate. Having a written buyers agency agreement will allow your agent to research, compare, contrast and help negotiate for you.

Thanks and have a good evening,
Melissa
Web Reference:  http://www.melissamoores.com
0 votes
Barrett Powe…, , Cary, NC
Mon Feb 23, 2009
I always ask my clients "What is your objective" when buying a piece of property. Some say "to stay here forever", orhers "I want to move up or down in 5 years". Based on this feedback determines what areas we show.

There are some areas that no matter what market are going to be more difficult to move than others. It could be the style of houses in that area, restrictive covenants, or it could just be that home or development is keyed to one particular slice of the market, green living for example. There may also be times when "buyer's agents" are aware of something you as a unrepresented buyer may not be. Examples: a new road being built that comes through the neighborhood, a megamall being built right next door, or some other negatively impacting event that may not be "material fact" yet. There can be many reasons a house or neighborhood are not selling outside of price, location, and condition. This is where a "buyer's agent" can really help.

So if you like the house and you are aware of all the aspects of that house and neighborhood and want to make an offer, do yourself a favor and get an agent.
0 votes
Mike Jaquish, Agent, Cary, NC
Sun Feb 22, 2009
Your offer should reflect the value of the property to you, based on the neighborhood sales and trends. That is not a waste of time.

Current market trends indicate a need to return to the classic real estate precept that you should plan on being in a home for 5-7 years as was the norm in the past.

While a low offer may protect you from equity loss in the near term, it may also render it quite difficult to come to contract. This is particularly true if you don the mantle of "Entitled Buyer in a Buyers' Market," and you proceed to load the offer with excessively aggressive terms and requests.
When making a low offer (or any offer for that matter) the cleaner the offer, the better position you are in to convince the Seller that the offer is serious.

Good luck in your decisions!
Web Reference:  http://MikeJaquish.com
0 votes
Wendy Norman, , Raleigh, NC
Sun Feb 22, 2009
As a general rule of thumb, price is eventually what sells a house. Market pricing here hasn't gotten out of control as it did in other areas of the country that are now feeling the effects of the market downturn (AZ, CA, FL, etc.). For the most part, homes still sell here for around 97% of list price; however, you'd really need a buyer's agent to pull various statistics for you about the area, subdivision, appreciation rates, etc. to be able to make an informed decision. While I can't advise you on an offer price (all agents in NC represent the seller until an agreement is reached either orally or in writing w/ the buyer), I always told my sellers that some offer is better than no offer at all. The price range over 500K has a definite surplus of inventory, so it's going to take some time to absorb the amount of new construction homes and other homes in that price range. What we're finding is that the home has to be the one that has the best price, best condition, and best lot/location to move a little more quickly than the competition. Buyer's have a great opportunity to buy this year with the $8,000 tax credit (which of course has income limitations), lots of inventory to choose from, and low interest rates. Most investments have inherent risks and you never know if the home you purchase will gain value over time; however, in Wake Co, the average home sales price has been increasing and the area is still seeing appreciation across the board (but this may not apply to certain subdivisions or locations). Your buyer's agent can work with you to find the best value and hopefully narrow it down to areas that have historically been the most stable as far as keeping up w/ supply and demand. If you'd like more market data about a specific price range and area/subarea of the Triangle, I'd be glad to help. Feel free to call or email if you're ready for a buyer's agent to help with your home search. Thanks for the question and have a wonderful evening!
0 votes
Erica McClen…, , Raleigh, NC
Sun Feb 22, 2009
There are many reasons why a home will not sell. Without knowing the address, neighborhood and area I could only give you a guess at best!

If you do not have a Realtor helping you by providing stats, trends in the area, past sales and history of the homes you're looking at, Id' suggest you find someone to build a trusting relationship with! A buyers agent can look at many factors to lower your risk in a purchase.

We do not know what the market will do but there are many things you can do to put yourself in a smart selling position down the road.

Also, what is the sellers situation? If they are headed to foreclosure or relocation they may be motivated to wheel and deal. If they are just selling to sell...they may not want to ditch their home for a rock bottom price. However, you never know until you ask!
0 votes
Larry Story, Agent, Greensboro, NC
Sun Feb 22, 2009
B.
None of us have a crystal ball. To tell you the market in a couple of years I would like to be able to do that. But as for right now you can offer whatever you like. All they can do is say no. Of course some of this depends on what you consider a low ball offer. I would ask my buyers agent for the historical data for that neighborhood. Now if you offer too low an offer you will insult the sellers and they will not even counter. So it is a gamble but, in the end you have nothing to lose.

Hope this helps,
0 votes
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