11-09-2010 05:53 PM
I just bought a house that was listed for 10 days. I had been searching Redfin for 4 months and it was in a location I really liked and had most of the things I was looking for and fewer of the shortcomings that other houses in about the same price range had. I ending up paying less than asking but more than I wanted to, but after viewing and driving by over 25 possibilities and rejecting all, I am happy. Had I waited to see if I could have gotten it for less if it stayed on the market longer I risked losing it to someone else. I do not know if that would have happened but I would be very unhappy now if it had! So even though prices may drop more I am not putting more value on a bargain than on getting a house I really like. It needs some work and I will be happily doing all the things to a house that I love to do. I don't intend to sell any time soon and know all the improvements I make will increase its value - not for resale but to me. Mortgage money is cheap and renting a comparable house would be higher than my payments! My realtor also told me about clients he has that are sick because they made a lowball offer and even though there were counter offers they were not willing to move fast enough and someone else came in with a better offer and they lost their dream home! So, those looking for a bargain only will surely find one, but if you have narrow criteria and see what you want, you may not have another chance any time soon! To each/her own and good luck! signed Happy Homeowner
11-09-2010 07:18 PM
Congrats! It sounds like the house was priced fairly and if you plan on staying long-term, you will probably be able to weather any further depreciation just fine. Until you sell, all losses (or gains) are theoretical.
I'm making an offer on a house I like this week. It is not reasonably priced (based on current comps, not on how much I want to pay) so I anticipated a "freak out" moment for the seller. Should she not choose to sell at current market value (based on real, recent comps), I have other properties to look at or I may decide to sit out the winter and rent. I take the risk that someone else may take a liking to the house and outbid me (limited risk since it's going on 240+ days w/o an offer and she is pulling off the market for the winter) and the seller takes the risk that I find something else more to my liking...
The "perfect" house for most folks is the right house, at the right price, at the right time. Sounds like you found your perfect home, so again - congrats and enjoy!!! Fingers crossed that I do the same soon. I believe it is a wonderful time to buy, at the right price!!!
FWIW, since I've been looking awhile (2 yrs), I'm a bit more pragmatic - I don't fall in love with houses until I have the keys!! I have made dozens of offers on houses that I felt "I had to have" and have seen them come and go. None of them, in retrospect, broke my heart to lose. In fact, in a few cases, I dodged a huge bullet and feel lucky that someone else's offer was accepted over mine. There is a certain BofA owned money pit in Snoho Cty that is still pending. We "lost" the house to an offer $5K more than ours in April.... it is silently rotting away unoccupied with a leaking roof and unmaintained pool that is leaking this winter. Bullet DODGED.
11-10-2010 10:58 AM
As far as comps and the value of the house the appraiser knows the contract price in advance and I believe looks for comps to justify that value to the bank. My appraisal came in at $1,300 over selling price. And since they don't go inside the comps how can they really compare? Screwy....
11-10-2010 11:26 AM
I'm not sure what you're saying.... it's common for an appraisal to come in at/near the purchase price. The comps your appraiser uses to establish the appraisal price may or may not be the same homes you use to establish your offer price. Personally, I've always felt that a URAR provides a "ball park" estimate that may or may not be substantiated if a more thorough appraisal were done. URARs are done to protect the lender, not the buyer, and as you point out - the appraiser knows the price point already. Since FMV = price that a willing seller and a willing buyer will agree to, it's totally logical that appraisals come in at/near purchase price, since that has defined FMV for that property.
The comps you use to establish offer price, IMO, should be more thoroughly researched. In my case, all the comps I've used to construct the CMA for the property I'm looking at are homes that I've personally toured or my agent has toured, so we have seen inside the house and are familiar with each property to some extent and can then compare it to the property we are offering on. I also have my agent conduct broker interviews to understand if there were any seller concessions given that are not reflected in the actual purchase price recorded in MLS. Because I'm paying my own closing costs and not asking for concessions for appliances, carpet, etc., a lower $ offer may actually net the seller more money than someone who is asking for concessions.
11-10-2010 11:40 AM
I'm sure with negative forums like this, you feel a need to explain an action that is counter to the majority. All I can say is congrats and enjoy all your new found free time with friends and family.
11-10-2010 04:58 PM
In an obviously falling market, buyers should feel free to be trend setters, setting new lower comps.
I lowballed a condo and set the stage for lower comps for the entire complex. Wondering now how that'll affect my plan to move in 3 years. :-)