Would I be a jerk to offer $180,000 on a house that they are asking $199,000 for?

[Lyfer]

Nothing wrong.

 

[Eug]

A properly priced home sells in about 90 days. Anything that sells in 5 days was either dumb luck or horribly underpriced. If it has been 6 months, it is overpriced.

Around here, anything that took 90 days to sell was probably significantly overpriced, unless it's a $2 million luxury home.

Most of the lower priced mainstream homes (< $1 million) in decent neighbourhoods sell in days to weeks.

If they've dropped it means it was badly overpriced and it probably still is. If they come back at $198,000 you just laugh and wait for it to drop again.

That's not necessarily true at all. Could be true, but it could also be completely false in this case.

My general rule is to start the negotiations at 15% below asking, assuming there are no obvious problems.

Obviously, this depends on the desirability of the property and the local market. In high demand areas, you may need to start at a higher price.

Conversely, if the market is slow, or if the seller has already dropped their asking price, that is a sign that you should start lower - may 20% below asking.

Around here, generally if you start at 15% below asking on a mainstream home, and the asking price is in a reasonable ballpark of fair, then you either may be ignored, or you'll get a counter with a minimal decrease.

ie. Let's say a home is fairly priced at $495000, and the listing is at $500000. If you offer $425000, they'll just either ignore you or else come back at $497500 or something.

---

IOW, it all depends on the local market conditions, the house in question, and the individual buyer and seller.

 

[Venix]

OK, let's get things straight.

Assuming this is a home intended to be sold to a middle class family ....

A properly priced home sells in about 90 days. Anything that sells in 5 days was either dumb luck or horribly underpriced. If it has been 6 months, it is overpriced.

A good agbent should handle pricing for you. He should tell you that the home is worth X and then all the BS negations happen ... (realtors are basically a good ol' boy club). So, you tell your realtor that you'll pay $190K or whatever. Then the buyer and seller agents manipulate the situation to try to get the seller to sell.

There is no nationwide standard for how long a properly priced home should be on the market. In many desirable markets, 90 days without an offer means the property is extremely overpriced.

 

[IHateMyJob2004]

Around here, anything that took 90 days to sell was probably significantly overpriced, unless it's a $2 million luxury home.

Most of the lower priced mainstream homes (< $1 million) in decent neighbourhoods sell in days to weeks.

PSA: They are not properly priced. Not that realtors care. They probably drive $80K cars with that kind of turnover. Imagine the horror of having to have a $30K car if you had to wait 90 days to sell!?!?!?!

 

[IHateMyJob2004]

There is no nationwide standard for how long a properly priced home should be on the market. In many desirable markets, 90 days without an offer means the property is extremely overpriced.

Groupthink

Groupthink is a psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.

 

[mikeford]

Far too little information to form an opinion. Sure offer anything you want, but don't expect magic unless the market is very depressed in your area. Its also not just the dollars, but the terms, all cash as is, buys houses cheap, contingent on FHA etc inspections and loan approval for a low down first time buyer, not so much.

 

[Eug]

PSA: They are not properly priced.

Yes they usually are. Your market is not the same as mine. Anything reasonably priced gets snapped up in days to weeks, unless it's a really high dollar home. There is low inventory here.

If you think your local market conditions are representative of the rest of the country or the rest of the continent, then you're foolish.

 

[Newell Steamer]

Counter offers are perfectly OK.

Not sure how or why you would think you would be a jerk on something like this.

 

[QueBert]

For those in California. Enjoy the implosion as the water drought continues. Seriously, no one will want to live where there is no water. People will leave and these million dollar homes won't be worth shit.

So what you're saying is the people who can't take it will leave Cali, and it will result in me having to deal with LESS people but still have the best weather in the US by far? And I'll be able to buy a house that use to be worth millions for 1/2 off?

Sounds like a uber huge win/win/win for me.

 

[NetWareHead]

To low, it gets ignored
Low and you may get a counter offer

This. Some people will take it personally, others will just see it as a clueless offer made by an uninformed buyer. try selling something on craigslist and see the lowball offers that come in.

Its best to research the market and come up with comparable prices. Look at prices of similar properties and see what the asking prices are. This is where a realtor is very helpful as the MLS systems they have access to contain historical data for the area you are interested in. You can see if the house for sale was owner occupied for years, or if it was purchased a year ago and is back on the market after the new owner flipped it.

Of course, you need to inspect the property and assess its value. The last house I bought was found to contain over 15k in damages my inspector found and I was able to get the seller to reduce the price even more.

 

[OVerLoRDI]

So what you're saying is the people who can't take it will leave Cali, and it will result in me having to deal with LESS people but still have the best weather in the US by far? And I'll be able to buy a house that use to be worth millions for 1/2 off?

Sounds like a uber huge win/win/win for me.

My wife and I are starting to look at buying a house in CA. I wonder how bad the water situation will get and if it will effect property values. It is a super complex issue for sure.

 

[Venix]

Groupthink

Groupthink is a psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.

The dynamics of desirable and undesirable markets are completely different. A home in a popular market might be viewed dozens of times on the first weekend it's available, and could receive 10 competing offers within days. The same home in a less popular area will take months to see that level of interest, and is unlikely to receive multiple concurrent offers. More interest and more competition means a faster deal, obviously.

Go to Redfin and look at properties on the market for over 60 days in Seattle, and then compare with recent sales. Almost everything available for that long is priced well over comparable sales, and few of those properties will sell for anywhere near list price.

 

[MrSquished]

OK, let's get things straight.


A properly priced home sells in about 90 days. Anything that sells in 5 days was either dumb luck or horribly underpriced. If it has been 6 months, it is overpriced.

completely false. if 5-6 months absorption rate that is an average market.

in a market where i am, which has a ridiculous seller's market aka 1 month absorption rate, something selling within a week is common.

you don't understand real estate and you are applying absolutes to things that vary way too much market by market.

 

[Jimzz]

The house I am buying was asking $375k. We offered $50k less and they accepted.

We are paying cash, no contingences, and needs work. But worse case they say no.

 

[Printer Bandit]

I just put an offer on a $1.4mil house and it got rejected.

 

[brianmanahan]

Except in high desirable areas like San Francisco Bay Area

san francisco... highly desirable...

 

[soulcougher73]

san francisco... highly desirable...

You don't get out much do you?

 

[brianmanahan]

You don't get out much do you?

i visited san francisco last year. certainly nothing to write home about.

 

[Fingolfin269]

depends on where you live obviously. Unless your in NYC Boston LA SF ATL etc.

You'd be surprised at other places like this. Many places in/around Nashville have become like this. Put up a house at what seems to be market value and see the bidding war above what you thought to be market value begin.

 

[Mixolydian]

You offer whatever you feel like offering.

 

[Eug]

San Francisco is one of my favourite cities in all of the US of A.

The house I am buying was asking $375k. We offered $50k less and they accepted.

We are paying cash, no contingences, and needs work. But worse case they say no.

"Paying cash" doesn't have a lot of meaning in itself. Basically every house is "paid in cash". If you get a loan to buy a house, the seller is "paid in cash" from the bank. More important is having no conditions.

 

[Ns1]

San Francisco is one of my favourite cities in all of the US of A.



"Paying cash" doesn't have a lot of meaning in itself. Basically every house is "paid in cash". If you get a loan to buy a house, the seller is "paid in cash" from the bank. More important is having no conditions.

Except you would need a few days to get the loan proceeds in your bank account right?


The rich Chinese investors buying up everything in SoCal would go to the bank and come back with a cashiers check before dinner.

 

[zinfamous]

Except you would need a few days to get the loan proceeds in your bank account right?


The rich Chinese investors buying up everything in SoCal would go to the bank and come back with a cashiers check before dinner.

those fuckers are buying out everything up here, too..and they will probably never inhabit the spaces. Just like in their country now, expect a lot of California ghost neighborhoods--expensive neighborhoods that go uninhabited for years.

 

[Eug]

Except you would need a few days to get the loan proceeds in your bank account right?

The rich Chinese investors buying up everything in SoCal would go to the bank and come back with a cashiers check before dinner.

No, the proceeds come on the day of closing. It's pretty unusual to have the day of closing the day after the sale. It's usually weeks to months later, esp. if you're still living there. You need time to move out.

 

[MrSquished]

San Francisco is one of my favourite cities in all of the US of A.



"Paying cash" doesn't have a lot of meaning in itself. Basically every house is "paid in cash". If you get a loan to buy a house, the seller is "paid in cash" from the bank. More important is having no conditions.

cash does matter

(though not in crazy markets where stuff sells in a week to a month. people don't mind waiting an extra 20 days for a regular deal to go through since they are picking through 5-10 offers of which many have very strong 30% or more down mortgages)

since financing issues is the single biggest cause of deals to fall thru - all cash avoids that making it a very strong offer. no appraisal is needed either, the only thing left is an inspection, which is the 2nd biggest reason deals fall thru.