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#1
05-11-2007, 10:19 AM
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If you are buying real estate and can easily obtain financing.....
1. What % of the asking price would you offer into this declining market?
2. How much further a decline do you expect? 3. By when do you expect this market to bottom out? 4. How long would you expect before there is appreciation once again? 
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#2
05-11-2007, 12:01 PM
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Re: If you are buying real estate and can easily obtain financing.....
82.45%
6.71% March 2, 2008 136 days
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#3
05-11-2007, 01:55 PM
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Re: If you are buying real estate and can easily obtain financing.....
1. Assuming the propery is priced at the true current market value if I were to put in an offer today(for a house I was going to live in) it would be for 10%-15% below the current appraised value. I have sold 13 homes since January and all but 1 sold for below the appraised value and the one sold for exactly the appraised value. What someone is asking in this market many times does not mean anything as there are still numerous sellers out ther with 2005 prices in their heads.
2. I personally think that we are currently in the middle of a market correction. With that said I also think a big hurricane season or a terrorist atack would be very detrimental to the recovery of the overall real estate market. 3. The market will start to bottom out once the supply of new homes and also the supply of vacant resale homes dwindle. Supply and demand rules the world. In 2005 there was about 2000 homes on the market in my area and today there are over 7000. 4. My opinion is we should start to see some appreciation in 2008 but I think it will be very moderate(2%-3%). You typically should look at a home as shelter that will give you long term appreciation. Over the last years people have started to view home more as a vehicle that can provide short term profits and this(as we now are seeing) is a recipe for disaster.
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#4
05-11-2007, 02:07 PM
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Re: If you are buying real estate and can easily obtain financing.....
[ QUOTE ]
1. Assuming the propery is priced at the true current market value if I were to put in an offer today(for a house I was going to live in) it would be for 10%-15% below the current appraised value. [/ QUOTE ] You would seriously put in a bid of 510K on a 600K home, or 680K on an 800K home? I would think most homeowners would laugh in your face. Does this work? All the realtors I've talked to say anything more than 10% below is a bad idea. Keep in mind the downturn isn't happening everywhere. My town in northern NJ has actually seen about a 5% price increase over last year and about 8% from 2 years ago.
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#6
05-11-2007, 04:18 PM
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Re: If you are buying real estate and can easily obtain financing.....
[ QUOTE ]
[ QUOTE ] 1. Assuming the propery is priced at the true current market value if I were to put in an offer today(for a house I was going to live in) it would be for 10%-15% below the current appraised value. [/ QUOTE ] You would seriously put in a bid of 510K on a 600K home, or 680K on an 800K home? I would think most homeowners would laugh in your face. Does this work? All the realtors I've talked to say anything more than 10% below is a bad idea. [/ QUOTE ] I don't think they are laughing. I think they are in a state of panic. I put in a bid for 20% less than the ask. They counteroffered with 10% less than their ask immediately. It appears to me I offered too much at 20% below. Also the broker immediately put me on to other places after their lower ask, since I refused to offer more for other reasons than the price. It looks like something is up here, and home as listed are listed way TOO high right now.
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#7
05-11-2007, 06:11 PM
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Re: If you are buying real estate and can easily obtain financing.....
Yes, I seriously would. I am a REALTOR and I am telling you that is what I am selling homes in my area (Ocala,Fl.) for. This area of Florida saw unreal appreciation rates from 2003-2005. I am a aware that yes there are a few areas in the U.S. where prices have still been going up, Austin Tx and some parts of Tennessee come to mind. I would agree that if your area is still appeciating then yes, most sellers would laugh(or simply not respond) to you if you made an offer that low.I was going on the presumption that the OP was in an area of the U.S. that was seeing the market slowdown.
Off the top of my head from this years sales: seller sold for 7k below current appraisal, seller sold for 35k below current appraisal, seller sold for 5k less(today) than I had a contract for that he turned down 8 mos. ago, home is currently listed 30k below 6 mos. old appraisal and I can't sell it. If you are an area that is seeing the slowdown you definately can find seller's that are willing to negotiate. Typically the owner of a vacant home will be more willing to negotiate with you than a home that is owner occupied. I hope your transaction goes smoothly for you if you decide to make the purchase.
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#8
05-11-2007, 06:22 PM
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Re: If you are buying real estate and can easily obtain financing.....
[ QUOTE ]
[ QUOTE ] [ QUOTE ] 1. Assuming the propery is priced at the true current market value if I were to put in an offer today(for a house I was going to live in) it would be for 10%-15% below the current appraised value. [/ QUOTE ] You would seriously put in a bid of 510K on a 600K home, or 680K on an 800K home? I would think most homeowners would laugh in your face. Does this work? All the realtors I've talked to say anything more than 10% below is a bad idea. [/ QUOTE ] I don't think they are laughing. I think they are in a state of panic. I put in a bid for 20% less than the ask. They counteroffered with 10% less than their ask immediately. It appears to me I offered too much at 20% below. Also the broker immediately put me on to other places after their lower ask, since I refused to offer more for other reasons than the price. It looks like something is up here, and home as listed are listed way TOO high right now. [/ QUOTE ] One thing I try to do if I am making an offer on something is this. I try to "put the owner on a hand" and determine what I think the owners current bottom dollar is. Many factors such as:time on market, vacant or not,conversations with neighbors etc... will help you detrmine this. Then I try to come in just low enough below that to make the owner not want lose me by countering. For instance if you thought their bottom dollar was 10% below asking price then I would offer 14%-15% off asking price. More times than not(in my personal 12 year experience) the owner will go ahead and accept the offer because it so close to want they wanted.
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#9
05-12-2007, 12:37 AM
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Re: If you are buying real estate and can easily obtain financing.....
[ QUOTE ]
1. What % of the asking price would you offer into this declining market? 2. How much further a decline do you expect? 3. By when do you expect this market to bottom out? 4. How long would you expect before there is appreciation once again? [/ QUOTE ] you're talking like real estate is just "1 market"...there's literally millions of different markets just in the U.S. alone. In my area, places are going for around .1% less than asking price...there hasn't been a decline...there doesn't look like there's going to be one (most likely just a plateau) In other areas I've helped people on MSN or AIM and they've gone as low as 20% off of the asking price. Basically what I'm trying to say, learn your market, don't look for easy answers.
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#10
05-13-2007, 03:34 AM
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Re: If you are buying real estate and can easily obtain financing.....
[ QUOTE ]
you're talking like real estate is just "1 market"...there's literally millions of different markets just in the U.S. alone. Basically what I'm trying to say, learn your market, don't look for easy answers. [/ QUOTE ] I was going to say the exact same thing. In my local area, houses are still appreciating and don't seem to sit on the market for all that long.
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