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Asked by Kiffany, Lincoln, NE Sat Sep 20, 2008

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David Matney, Agent, Omaha, NE
Sat Sep 20, 2008
BEST ANSWER
Kiffany, you ask a very good question. This is a generic answer because I have not seen the home nor have I done a Competitive Market Analysis for the property - every situation is different. Homes sell at market value and that is determined by the market. My concern from the information in your question you said, "homes across the street sell in the range from $150K-$170K." Buyers looking for a $275K home look in a 275K neighborhood.

Are you buying the most expensive home in the area? This might make it a challenge when you sell the home. If the sellers absolutely have to sell, who knows what they might be willing to accept? You can always make an offer. However, keep in mind the sellers even if they have to sell might not have the money to cover the deficiency in the loan? Assessed value is in no way related to market value.

When you write your offer, I would write that the purchase is "subject to property appraisal at or above purchase price." If the home is not worth the appraisal value then it allows you an escape. My guess - is that more than likely the sellers will not accept an offer of 210K. But, you never know - it depends on their motivation. I would talk to your Realtor and get advice from a local agent in Lincoln who knows the area and the market. Good luck on your home search. I included a link to my blog, I have posted several posts helpful to buyers when they purchase a home.
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J R, , New York, NY
Sat Sep 20, 2008
We can only afford to offer about $210k.
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Unfortunately FSBOS are not generally very motivated. If you can afford only 210K, you would do better in an area were homes were selling for 210K. Likely the FSBO cannot "afford" to sell for much less than they are asking. Not at it matters to a buyer, but my point is, conversely it doesn't matter to a seller what a buyer "can" afford. You should have your agent represent you, and do comps, then present an offer that is based on those comps.
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David Matney, Agent, Omaha, NE
Sat Sep 20, 2008
Kiffany, thanks for the additional information. Here is just a few more thoughts. If the sellers are FSBO they either are 1) not really motivated or 2) they do not have enough money to pay Realtor fees. Just because a home is being sold as by a non-represented seller doesn't mean you have to be non-represented. Talk to your agent and many agents will still help you purchase the home and the agent will represent YOU. Representation by the right Realtor will pay for itself. In fact, your agent can have the seller pay the commission.

Go ahead and make an offer - it doesn't hurt. I really suspect that the sellers will not be able to tolerate that amount of loss - especially if they have no money to bring to closing. Again, if I were you I would consult your Realtor. Your agent can perhaps negotiate a "short sale" with the seller's lender. A short sale is when a seller sells a home and the lender accepts less than a full payoff for the original loan. If the seller is in a hardship situation many lenders will accept less than full payoff. The seller made a mistake by telling you that they have to move because of job transfer - this puts YOU at an advantage in negotiations because you know their motivation. They should have told you that their "housing needs have changed." Good luck with you pursuit of this property.
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Kiffany, Home Buyer, Lincoln, NE
Sat Sep 20, 2008
David thanks for the information. Here is more infor. if it helps.

We would like to have our agent give us comps for the area but I don't know if it appropraite to ask him as this house is listed FSBO. I would normally go with what the other houses in the area are selling per sq ft for but all the houses across the street are valued at about $150-170 and they average about $110/sqft which seems low for this house. This house is the only house completed on its side of the street. The houses on this side will be all of the same construction and type and valued at $275k or at least they were when they were contracted to be built by the builder a year ago.

I am not a builder, but from the houses we have seen I would say that this house is above average construction, an energy star home, granite countertops, etc. But buyers could buy the new house for sale by the builders which is on the south side of Lincoln (known as the "better, more expensive area to live") at the same listing price, it was in the parade of homes and is still on the market since about March. The fact that the new house has not sold, leads me to believe that they are going to have a hard time selling this one also.

So, right now this is the most expensive home in the immediate area until others are finished. There are other homes a street or so over that are more expensive. However, Trulia gives the average sell price for that suburb at $120k.

I know that we would be asking the owners to take a considerable loss here, but we have been shopping for a while and I know that they will be very lucky to sell right now, especially in that price range. We are also considering another home in the Fallbrooks area which is a much more upscale and nicer neighborhood. There were we are looking at a few homes in the same price range, new never lived in, about the same sq ft. and have been on the market for 2-3 years.

I know that the only thing we can do is try the offer and see what they say. I feel bad for their loss, but we are not the cause of the market going down. I don't know if maybe we should just wait and if they don't sell it by winter time put our offer in. They are planning to be moved by the beginning of Nov. But they haven't had their home on the market long, so they don't really have a feel for how cold the market is.
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