Asked by Susan, San Francisco, CA • Wed Nov 28, 2007
I am getting ready to start making offers on homes. In my area, I am noticing many homes purchased in '03-'06 are adding an average of 100-150k per year to their listing price. Many of these homes have been sitting around for a minimum of 30 days and upwards of 6 months. This seems excessive to me since rents and salaries have not seen the same amount of growth. Some homes have modest price reductions, but still not enough to make reasonable offers. I recognize some people may have remodeled the kitchen or whatever, but my belief is those improvements just make the house livable, which should be market value and not a huge profit.
My strategy is to offer 2004 prices which I feel is fair in this market since pricing after that seems caused by the bubble. Do you think this will offend sellers or are they really serious about selling their homes, or should I simply stay away from homes purchased in this time frame?
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