Getting Closer to Buying a Home

Remember this house? It was taken off the market for a bit and just came back on. It's now priced at $450k. Since it started at $549k and we offered $350k, their new "opening bid" price is now smack in the middle of where they were and where we were. I had my agent call and ask if they'd reconsider our offer, but no luck yet. Let it sit. Time has a way of softening up a stubborn seller. :-)

Comments

[Lisa-Marie]

This is frightening! We have a townhouse in the DC area. The last one to sell on our street sold nearly two years ago for $620. We thought we were being conservative when we listed last August for $575. Couldn't sell it. Not even an offer - even though we eventually went down to $545. We are lucky enough to not need to sell it so we just rented it out, but the comp we were keeping our eyes on that started at $579 just sold for $450...ouch. You may get your house yet.

[Terry]

Real estate agents and mortgage brokers will try their best to make you "act" by saying that the house won't last or that rates are going up. However, sitting and waiting tends to make the most sense these days - if the economy tanks rates and house prices will drop!

Great site by the way!

I know many people who are trying to get rid of houses in MI and they would be happy with any offer. Be patient... seems like these people are getting a wakeup call. Although I can understand their disappointment at losing hundreds of thousands of dollars. That's why I am against high-priced homes - you can knock $100k off and it's still way above average for the country. Knock $100k off most homes around here and they'd be free!

[Jane]

Isn't this always why sellers in a buyers market should almost always take the first offer. Generally that frist offer has come from someone who has been looking for a while and finally finds a house that is acceptable and the buyer knows the market and is going to offer what it is worth even if it is lower than the seller wants. They will also generally offer more than any future offer becasue they want your house.

[Finance Monk]

Sounds to me like like you're maneuvering through this market well, FMF. With the excess inventory that's out there, prices have quite some ways to fall (though it all depends on your area). Hope you can make the deal work.

[Robert D. Ashby]

@Terry - Not all real estate agents and mortgage brokers are going to tell you to act right now. When you act depends on a number of things, but don't try to "time the market". if it is time to sell or buy, then do it, but don't let anyone pressure you, you determine the right time.

Buyers shouldn't always take the 1st offer. On our house we offered really low because the price we actually wanted to pay was about halfway between what we offered and the asking price, and that's where we ended up. If they took the 1st offer, they would have given up $10000 that we were willing to pay without a fight.

I do wish that the negotiation process went a little smoother. It ended up each party inching up/down by $2-4000 at a time, when we both knew where we were going to end up.

If someone lowballs you and you are willing to accept meeting them halfway, I would recommend coming out and saying it. for example:

asking price $200k
buyers offer $160k (but probably picked this number because he wants to end at $180k)
seller says "I'll settle for $180k but that's as low as I'll go"
buyer: ok

rather than 200...160, 198...162, 194...166, 190...170, etc...

[Kevin]

Good luck, sounds like you are in a pretty good position just waiting for the next price drop.

[AdamCO]

Patience is the buyer's friend in this housing market.

There are absolutely no indicators that housing prices are going anywhere but down for at least the next two years.

Say you are looking at a $350k house. Next year it is on the market for $320k and the year after for $285k. By simply being patient, you earned $65k, minus whatever you paid in rent. That beats saving $40k for a down-payment over four or five years any day. (Although you should be saving that $40k for a down payment anyways)

My point is a buyer in a rush in this market will lose tens of thousands of dollars over the next couple of years (if not 100s of thousands).

Stick to your guns, FMF. $350k is probably more than fair.

[MetaMommy]

We live in an area where people are incredibly stubborn in home pricing. Homes have been on the market for a lot longer on average, and we're seeing huge drops in asking prices. What always gets me is that people can't relate to the notion that unless they paid more for the house than they're selling it for, they're not actually losing money. Any pricing increases in the housing bubble were on paper, but they weren't real gains. People have such a hard time accepting that they just didn't get as much as they could have.

Even if you don't get that house, I'd say you have a pretty good shot at getting a place you like because we're moving into a buyers' market. You're actually going to have choice again!!

[Jason]

This is a presentation given last night in San Diego. Some of the data is specific to San Diego, but the rest is national. It provides a great dissection of the real estate market.
http://www.beaconecon.com/events/SanDiego08/SanDiego08Thornberg.pdf

[Jason]

This is a presentation given last night in San Diego. Some of the data is specific to San Diego, but the rest is national. It provides a great dissection of the real estate market.
http://www.beaconecon.com/events/SanDiego08/SanDiego08Thornberg.pdf

[No Debt Plan]

Wow a $100k cut... I will be truly shocked if they come down to your offer, but it would be a great deal for you!

[SavingDiva]

A lot of sellers are holding on to estimates they were given years ago. Unfortunately, the market is not what it once was...Sellers in my area are holding on to their properties and renting them...the rental market has been great...decreasing rents...However, the foreclosure rates in my county are high (the second highest in the state) and probably just going to get worse.