It will also be helpful to know what they owe. If they've owned it a long time and have a lot of equity they are usually more motivated. But, if they've refinanced or recently purchased it, they don't have a lot of room to negotiate unless they are going to try to short sale. It doesn't happen as much in this price range, but it is a possibility. If it's priced well below the market value already don't let that deter you. If the seller is truly motivated and needs/wants to sell it now, make your offer but check comps first to make sure you're not overpaying. I wouldn't pay for an appraisal at this stage, but I'd definitely price it against the comps. You'll have to pay for an appraisal again if you put a loan on it.
Diane Conaway, RE/MAX United, (760) 749-2888
THere's hope for some of you yet!
A few people hit the nail on the head. Before you determine how much below asking is reasonable, determine if the asking price is reasonable.
If the asking price s 15% above market value, and you knock 5% off the asking price - you're still paying too much for the home.
Inversely - if the home is priced well below market value, knocking 5% off the asking price might be asking to lose the house.
Worry about actual value first - and price your offer with that in mind.
Check what is happening in the zip code that the property is in. At the site http://www.sandicor.com/statistics.html you can find the average and median list / sale prices for every zip code in San Diego County. You will also have number of listings, number sold, months of inventory and days on market. The data there should help you in deciding if your offer makes sense. I have an excel worksheet that you can use to arrange and quantify 4 months of the data from the site I mentioned. You also might condsider getting an appraiser to do a "buyer's appraisal" for you. Having an appraisal that shows the value of the property from a professional, can give you a decided advantage in negotiating. I can give you the name of a good appraiser. I can also send you a copy of my article "the art of contrarian investing" that has more useful ideas for buying. Just send me an e-mail and I will forward the article and/or the worksheet to you.
Get help from someone to give you a valuation. Doesn't matter what you can afford, nor what the asking price is, you need to know what the home is worth. 45 days is not long for a $1M property, but again, what's it worth. Is there a reason you don't have an agent representing you?
Again, look to the 2001 to 2003 price range. What did that home, or homes similar to that sell for in that period? That is where housing prices should be right now. Values gained from 2004 and upward are phantom. For example, if the home was bought in 2003 at $675,000 and now the seller wants $900, you should only offer slightly above. The owner barely has 5 years into the property and since then, the housing market has crashed. There is absolutely nothing to support the asking price of $900,000 unless that is what he paid between that period. And don't fall for 'well the owner has to get his money back, or the owner has a second he has to pay off.' Be patient. If you can, wait until the fall, and my best guess is that prices will fall another 15 to 20%. Be firm, be hard nosed and tell yourself you are out to the get the best price you can. You're not buying groceries, you are buying a HOUSE. This is the most epxensive purchase in your life. Be careful, be cautious and RESEARCH, RESEARCH , RESERACH and do not take the word of a realtor....buyer beware. Good luck.
satisfied that you did your best. If they counter you can decide the merits of the property and continue to
work with them and raise your offer. You are in full control of the situation and you know the old saying "nothing ventured, nothing gained!" If you don't try, every time you drive by that house you'll wonder,
"Could I have been living there"? :) Nobody remembers the first offer anyway if the transfer comes together successfully for everyone. Go for it! Terry Ballantyne
How do you know for sure the value of the property? You only know after it's sold. The buyer establishes
the value by plunking down cash! My advice is to discuss with your qualified, knowledgeable agent what
the home might sell for. (this is much easier in sub divisions and like quality neighborhoods, much harder in Santa Cruz where I work, due to the variety of styles and quality) Make an offer that would make
you do backflips if it were accepted and see what the seller does. A good seller's agent will always respond to your offer. Good luck and get going. This is a great market! Seas Your Dream!
As for being on the market more than 45 days: I don't know the San Diego market at all. Check with a Realtor. However, in many parts of the country, even for mid-level homes properly priced, 45 days on market isn't unusual. So, don't take 45 days on market as an indication that the owners are desperate, or that the house is vastly overpriced. Now, they may be desperate; the house may be overpriced. But 45 days on market says nothing.
Once you've determined the property's true value, then make an offer (if it's below your affordability ceiling). It's always worth it making an offer. The worst that can happen is the owner rejects the offer, and you don't get the house. Well, that's exactly your situation today if you never make the offer.
Hope that helps.
I would recommend that you have your Realtor (if you are using one) pull comparables in the area. What you can afford and what the home is worth is two different things. If you still feel you want to make an offer, than you should and at that point you will know where that sellers motivation. It sometimes depends on how much this seller needs to get out of his home. But as stated earlier 45 days on the market for a home over $1M is not a long time in this market. Homes on the average are on the market over 120 days+
Good Luck in your home search....Catherine Barden, San Diego Realtor (760)815-3866
When you have all this information you will be in a much better position to make an intelligent informed decision. In todays Market I would have no problem in heling you write that offer.
Please let me know if you would like more information. I will be able to save you about ana additional
$ 25,000 when you write the offer.
First Team Estates
You can always make any offer you feel comfortable doing; however have your agent prepare a market analysis for you. Showing you comparable properties... considering the size, condition, location, and view. This will show you how realistically the home is priced.
Currently the average market time for the 92103 zip is 80 days for the 43 sales that have sold in the past 3 months. The difference between the average list price and the average final sales price was just under 5%. However these are the average figures.
See if your agent can find out the sellers motivation and if there has been any offers. Based upon this information and the market value your agent gives the home, this will guide you in the right direction as what you can offer.
Good luck, Denise Gleavey
#1 Company in the Metro Area