01-07-2013 06:18 PM
Currently looking at some properties that have been on for many many days.... Some 200+ Some 500+ Some longer.
While I don't know what some of these homes are worth, I know precisely what they aren't worth: the listing price.
Some will say: "Just throw out an offer and see what happens." What happens is that the seller believes we are insane (for offering 300K on a 500K listed house that's been on at that price for 2 years...) We believe the seller is insane... and no transaction occurs.
I don't want to insult anybody, but if nobody else wants your house at 500K, why would I? Especially if you've been at the same price for 2 years.
Is there a formula I can employ that other will recognize as logical for discounting a property based on DOM? For example, a home listed at 500k loses X percent of value every month it's on the market?
01-08-2013 07:18 AM
You do not discount a property based on the DOM. There is no such thing. You can however, discount based on fair market value, and yes, there are ways to do that without insluting anyone. Its called comps, and your agent should run them for you and determine a fair market value for you. That is their job.
Now you can take that fair value and present it to the seller and they may be smart and take it if they are serious about selling, or they could choose to ignore it if they dont need the money or are just palin stubborn and hope a buyer will come along (while they lose money on the place)
There are all types of buyers and sellers out there, and you cannot win them all. You need to determine a fair value and stick to it. The rest is out of your hands
01-08-2013 11:15 AM
Comps is a big part of it. Also need to dig into why they think the property is worth what they say it is. Are there upgrades or home features that are one of a kind? Also, depending on the area, does the owner think the area is booming in terms of demand/developmetn and trying to capitalize on that before the neighborhood is really established?
You have nothing to lose by making a "low" offer. Put the ball in their court. Transactions occur at mutually agreeable price points.
01-09-2013 06:30 AM
Comps are the way to determine true market value. However, it is really up to you, the buyer, to determine what the home is worth. Any home sitting on the market for a year or two without any decrease in price shows that the sellers are not motivated enough to sell. You cannot force people with that mindset to consider comps, etc...Don't waste your time. Find sellers who want to sell and focus on getting a deal done. Good luck!