- Redfin Real Estate Forums
- Buying A Home
- First-Time Home Buyer
- Home Repair & Remodelling
- Housing Market Trends
- Inspection, Title and Escrow
- Selling A Home
- Bay Area
- Dallas - Fort Worth
- Inland Empire
- Las Vegas
- Los Angeles
- New York
- Orange County
- San Diego
- Washington DC/Baltimore
04-11-2008 10:39 PM
As first-time homebuyers, we've been obsessively searching through Redfin for many months now, and to make a long story short, we think we've found our "dream home" (as cheesy as that sounds).
The problem? It's a *new listing* (less than 2 weeks), and the price is WAY HIGH, compared to comps in the area, and especially compared to the price per square foot for other homes for sale (or that have sold) right now.
Here are the comps..in terms of price/sq ft, compared to homes in the immediate area:
- Current listings: 15% overpriced
- Homes sold in past 18 months: 24% overpriced
- Homes sold in *past 60 days*: 31% OVERPRICED!! over THIRTY PERCENT!?
(and, this isn't taking into account any theories about how the market might even go lower than it has been recently!!!!)
Here's our theory: since the listing is a new one, we're thinking that maybe the owners are still fresh-faced, bright-eyed, naive (?)...and have not yet woken up to the realities of the situation.
So, here's my question - What do we do?!?!
1) Make a low (but fair, based on neighborhood comps) offer pretty soon, and explain our reasoning to them and subtly point out that they are currently unrealistic (surely their listing agent has to know this?!?!).
2) BUT!! If we make an offer or EVEN EXPRESS a HINT of INTEREST right now, even at the inflated price, are we only ENCOURAGING their poor behavior??! ("Oh! Someone's interested! Let's hang in there!")
3) Wait it out and risk someone else getting it (after all, several homes have sold in that neighborhood in the past 60 days...for 31% less per square foot, mind you!, but still... *someone* out there is buying?)
4) Can we tell the listing agent that we are interested, but there is no way we will make an offer at the current price....here is our contact info...call us when you're ready to come back down to earth? (ie, put our name on an "interested" list, but not make an offer?? Does that sort of thing even exist?!)
I know that most of you will say to wait it out on the sidelines and watch gleefully as they wake up to reality and lower the price, but keep in mind that we've *stalked* that neighborhood for months, and we think this is "the one". We just wish the owners/listing agent were more rational.
As first-time buyers, we are very excited to find a home that has what we want, but are now scared that we'll make a wrong move and play the game incorrectly.
Would love any comments and suggestions from the peanut gallery! I've enjoyed reading the forums, and am hoping to get a spectrum of informed opinions (no haters though, please)
04-12-2008 10:29 AM - edited 04-12-2008 10:34 AM
Message Edited by TrabucoDom on 04-12-2008 10:34 AM
04-12-2008 11:08 AM
04-12-2008 11:45 AM
I guess my advice is decide what the value is, wait for a listing price within striking distance and then make your offer. If it sells before then, take comfort in the fact that you made a rational decision and wish the overpaying buyers the best of luck--they'll be paying for their poor decision for years.
04-12-2008 02:11 PM
I like the analogy made above likening an over-priced listing to a bad relationship! Ha! "All you do is take and TAKE from me, you selfish listing!" It's a helpful analogy, and I will keep this in mind -- right now, it's just a mere "house crush", but it's NOT TRUE LOVE...at least not yet. "If you really loved me, you'd pay attention to comps!" *sniff*!
I also like the comment about how, if someone else does in fact swoop in and get the home for a higher-than-fair price, instead of feeling blue, we should feel relieved that we are more savvy than they are!
04-13-2008 07:56 PM
cuddly, you're obviously rational about this, which is a rare trait in this crazy market. The one thing my wife an I looked at was the possibility of losing whatever equity we put in a new home via a down payment, in a market where the rate of price declines keeps accelerating - the amount the prices fell in march is more than february and more than january!! So we won't really make offers until the rate of appreciation is a bit more stable (and hopefully not accelerating to the downside).
Everyone's situation is different, we don't need to buy, so we'll keep looking on redfin and scoffing at the asking prices. By now most realtors know that the LA/OC prices are likely to drop another 20% at least, and they should be advising their customers to consider those offers if they want to sell their house, we won't see these prices again for a good few years!!
Happy house hunting!
04-14-2008 12:46 PM
If the Seller does have room to negotiate, an offer made at YOUR comfort level can only be accepted, countered, or rejected.
04-14-2008 11:01 PM
At worst they will reject your offer but if their listing agent is doing their job properly they will advise the seller to consider your offer and counter it. It may be they cannot sell at your offer price due to some equity loan or the need to get a certain amount from the sale to buy another property. Go ahead and make that offer if you are certain this is "it", but be prepared after to step back and see how it unfolds.
In the meantime keep your eyes open daily for similar properties within your target area and price range, you may be surprised to find something even better come along. You might also come across a bank-owned property that is very well priced but needs some TLC to turn it into a showplace. You never know!
Best of luck...and wish me luck too
04-16-2008 02:38 PM
Make your offer, and keep looking. Nothing ventured, nothing gained.
04-16-2008 04:58 PM