Profile picture for semsema

First time buyer!

We looked at 50+ houses and didn't find our dream home yet!. We decided to stop searching and begin offers on the first 5 houses in our list. We just have this feeling that we are not attached to any of them! and we may easily not negotiate if the offers are not accepted by the sellers. We really want to move to our new house quickly for several reasons but still, we are not happy! Any thoughts?
  • October 31 2007 - US
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Answers (63)

Profile picture for klarek the realist
Where are you looking? My first advice is wait, don't buy yet. If you believe you have to, then my second advice is to find the best deal out there, and really low ball them. Like 30% less than they are asking. You're going to have to prepare for the worst case scenario with this housing market, and that would be that your house isn't worth anything close to what you paid. Could you imagine having a $300k mortgage for a house that's not even worth $200k? I know people in that boat, and it's a depressing situation to say the least.
  • October 31 2007
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Profile picture for geringjr
I am waiting...so far seller expectations haven't met with reality unless they have a great home compared to current opportunities. Overpaying for homes right now is still a significant risk and I don't see any bubble just yet.
  • October 31 2007
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Profile picture for Rate A Home
Semsema, don't make any rash decisions because you are in a hurry. Utilize the tools available to make the right choice for your new home. This is a decision you will have to live in (and with) for years to come.
  • October 31 2007
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Profile picture for caliguy
I'm waiting too....I want to buy a house, but I can't justify paying about 2x more per month over what it costs to rent right now. Rate A Home made a good point - there will always be houses out there for sale. It's worth the time to really understand what your financial options are.
  • October 31 2007
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I want to buy so bad i can taste it! But I, too, am waiting. If you are bidding NOT on your dream home, that will be helpful in finding a lower price. WANTING a house, because it's your dream home puts you in a disadvantage when bidding. Whereas, not 'falling in love' with a home let's you walk away from the bargaining table faster, giving you the advantage. Caution: expect whatever you buy now to fall further in price, be happy with your interest rate to offset your future 'equity' woes. If the house is not worth the future loss in 'equity', because you don't love it. Don't buy yet.
  • October 31 2007
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I should clarify, future 'equity' loss does not mean it will stay that way FOREVER. Just that there will be a point where the numbers look upside down.
  • October 31 2007
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Profile picture for semsema
Thanks for your input. Well, waiting is not an option for us for family reasons. we are in Cleveland OH. There are oceons of houses for sale here, so if we will keep looking this will never end. Klarek, don't you think 30% less than the asked price is overkilling for the seller?. I know we need a good deal but I can't imagine how can I offer $259 for a $370 house?! how could I even convince my releator?. My releator told me that most houses sell for 90-95% of the asking price (in a stable market though). I was thinking about offering 15-20% less but I have this feeling that I'm just doing this to get an excuse for not getting the house coz the seller didn't agree with my offer!. I know it is silly thinking but maybe this is how you feel when you purchase something you don't like 100%.
  • October 31 2007
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Profile picture for Alan May
I've said elsewhere on these boards...

while many of the buyers (or non-buyers) who think the market has not yet reached bottom, and will continue to drop... are suggesting offering 25-30% below list, the sellers are NOT prepared to accept an offer with that deep a discount.

Not making a statement here, as to who is right or wrong... but think about it... if the seller were truly prepared to accept an offer anywhere near $259,000 don't you think they'd be PRICED closer to $259,000? They're more likley to be willing to drop their price to $320,000 (or some such other deep price reduction) hoping to pick up a buyer, before they'd consider accepting a $259,000 offer.
  • October 31 2007
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Profile picture for melanie777
Semsema,
Taking $$$ out of the picture, make a list of all the things you would want to see in a house in your market (3-car garage, nice backyard space for kids, finished basement, updated kitchen, whatever). Try to find a house that has the most off your "want" list. Then when you move, you can focus on what you did nor compromise on.
Also, many people hear others say "I knew it was out house the moment we stepped inside." That's bull (in my experience). "Your" house could be one you've already seen, but you were too distracted by the buyer's bad taste in furniture or paint choices, etc.
Good Luck!
  • October 31 2007
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Profile picture for caliguy
" if the seller were truly prepared to accept an offer anywhere near $259,000 don't you think they'd be PRICED closer to $259,000?"

I completely agree with you, King. Then why have I seen some agents suggesting to sellers that they should not lower the price much or actually increase their price because a lower price somehow suggests to buyers that there is something wrong with the property? I never understood that approach.
  • October 31 2007
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Profile picture for Happy Owner
My opinion/suggestion....maybe your 'dream house' is unrealistic. I am more in line with what melanie777 has said. Perhaps you can find a house that fits your budget, but needs some work. If you are planning to stay for a while, why not hunker down in a house that isn't perfect but can be polished to your ideal dream home? I would worry more about price, location, and structural integrity than whether or not the home is your 'perfect dream home'. I mean no offense, maybe it is time to be more creative about your search.
  • October 31 2007
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Profile picture for Gaya
  • Gaya
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I am a first time buyer and looking for houses in southern jersey. We have some criteria for our dream home but after learning about the housing market we are little more cautious while we are searching. The last thing we want is the house goes down 50K in value as soon as we buy. Anybody has any suggestions or ideas about the housing market in NJ?
  • October 31 2007
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Profile picture for Mike2020
Actually, if a seller is consistently low-balled along with other sellers consistently low balled.. eventually, you get someone who NEEDS to sell fast and who looks at his past offers and suddenly accepts a 25% haircut instead of the previous 30% haircuts..

Just like people getting bombarded with 20-50% year over year appreciation claims let it control their thought logic, so too will reality of a falling housing market.
  • October 31 2007
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Profile picture for Alan May
more likely, if they're getting consistently low-balled, they'll attempt to reduce their price to 10% below... or 15% below... before they'll accept a 25% haircut.
  • October 31 2007
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Profile picture for klarek the realist
"Anybody has any suggestions or ideas about the housing market in NJ?"

First suggestion is ignore any suggestions from a poster named "Alpine". While he is in northern Jersey, he's a troll that will make up falsely optimistic remarks about any market.

Second, look at the sales trends in the area. Check online tax assessment sites and see what prices were in 2000, then in 2005, and now. If they were double in 2005 what they were a few years before, it's a bubble and you should be wary. Compare regional median GDP to median sales prices. If they're, say, eight times the GDP, you know it's a bubble that will burst. Also, compare rent vs own prices there. In my area, it's half as cheap to rent. And that's after home prices here have come down 20%. I'm guessing they're going to drop by another 30% or so, so I'm renting right now.
  • October 31 2007
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I want to know how you have looked at 50 Houses. this would get confusing. Did you narrow down your criteria b4 looking?

As you said, there is a lot of inventory right now. I would try to look online first and try to narrow the search down to no more than 8. A good realtor should be able to input your wants and needs to pin down exactly what you are looking for. Otherwise, it sounds like you need to up the price range, and offer lower on those. You may get lucky. Best of luck.
  • October 31 2007
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Profile picture for 2 Big 2 Fail
A rule of thumb for home shopping: You will never find your "Dream Home." Your "Dream Home" is always out of your price range. If you are looking in the $5 million range, then you can talk to me about "Dream Homes." Otherwise, be preapred to compromise.
  • October 31 2007
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Profile picture for 2 Big 2 Fail
Yeah, klarek is right. Don't listen to me. I am a troll who pays the same amount in mortgage on my 5 bedroom house as people living in a 2 bedroom apartment pay in a complex near me in northern NJ. I am stupid. That is why I own 2 houses with a combined value of $1.8 million. That is why I made a $400,000 profit on my 2 bedroom dump in the slum of Manhattan.
  • October 31 2007
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Profile picture for LongIslandBubble
******That is why I made a $400,000 profit on my 2 bedroom dump in the slum of Manhattan.**********

....but that doesn't count because you threw it away on an even more overpriced dump.
  • October 31 2007
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Profile picture for delfik
My agent told me that offering less than 90% asked would flag me as "un-serious." I don't buy it. How is a low bid price any more insulting than a high ask price? Who's to say that prices should be based on "ask"'s in the first place?
If we had a little more openness in RE, and let people bid and ask freely (instead of being dissuaded by agents from finding the "right" price), we wouldn't have the huge glut of homes we see right now.
Sellers would see the bids coming in at 85-90%, then at 80-85%, and pretty soon (real soon, if they're smart) reality would set in.

Can someone explain to me the convention that sellers dictate price?

(BTW, the house I wanted to bid 13% below ask has already seen a 14% drop in value [counting CPI] according to zillow.)
  • October 31 2007
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Profile picture for 2 Big 2 Fail
Sometimes sellers have a gun to their head that forces them to ask a specific price: the amount they owe to the bank.
  • October 31 2007
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"....but that doesn't count because you threw it away on an even more overpriced dump."

AHH so sad but so true!
  • October 31 2007
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Profile picture for 2 Big 2 Fail
Bubblehead is jealous that he will never afford a house as nice as mine. That is why he has to move down south to stupid Atlanta!
  • October 31 2007
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Profile picture for LongIslandBubble
Allpain,

Moving south has nothing to do with house prices. I could buy a nice house for cash right here right now if I wanted to; but that would be a serious waste of money. The reason I want to get out of Long Island is because the taxes are sky high. The US economy is crumbling and the most expensive places to live are going to get hit the hardest. My decisions are based on concentrated intelligent research; if you listen once in a while, you may learn something.
  • October 31 2007
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Profile picture for chuckdog24
>>Sometimes sellers have a gun to their head that forces them to ask a specific price: the amount they owe to the bank.<<
C'mon Alpy, let's not be melodramatic!

>>Bubblehead is jealous that he will never afford a house as nice as mine.<<
If you can't get out of your house for what you owe, seems to me that your home is a liability, not an asset. I can't think of anyone who'd be jealous of that definition home ownership.
  • October 31 2007
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Profile picture for Anita Crum
Why are you offering on a home if you are not really interested in it? Perhaps you should reconsider your motivation for purchasing right now. I know you said for family reasons but is rent not an option?

If you must purchase, than make a list of all the things that your "dream house" absolutely must have. Then make another list of things that you would like to have but don't absolutely need. Then ask your realtor to only show you homes that meet all the criteria on your must have list and as many of the ones on your want to have list. Since you indicated there were so many homes in the area, you should still have a decent number to look at. Take a check list with you for each house and check off all the items on your list that it meets. As you look at the homes, if there are any that really don't work for you take them out of the picture. Then go back and look at the notes you took on each house and pick the 3 that best fits your needs. Ask your realtor to give you a CMA for each of those 3 properties. Also ask for sales data for those neighborhoods for the past 12 months, 2 yrs and 5 yrs. Then select the home that best suits the needs of your family. Make a reasonable offer to the seller based on the market data you've collected.

I can't recommend a flat % reduction because I think it varies from place to place and even each property (because despite all the talk on this site to the contrary, some sellers do price their homes right). Ask your agent - after all isn't that what you hired a realtor for, too get professional advice and support? If you have doubts, ask him/her to explain why he/she recommend that price. If you're still not comfortable, then just offer what you feel is reasonable. Just because we give advice doesn't mean you have to take it (and of course doesn't always mean that we're right either). Remember we have a duty to write up whatever offer you wish to make, even if it is just $1.00 (but please don't make us do that)
  • October 31 2007
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Wow, Anita! WTG, an agent that is honest about the market and how they should represent the client! Other than a few desperate starving agents, the agents here DO seem to feel free to speak their mind. I greatly appreciate it! There's nothing better than a good dose of observations from the front lines. :-)

There was a house listed for 395K-420 my hubby and I were interested in last summer, but we didn't try for it. It did sell a few mos later... for (I was SHOCKED) 306K! If i'd known they would take that, I'd have bought a house by now! Thank you to all the agents here, for your honest opinion. I really feel I have a better feel for the market now.
  • October 31 2007
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You simply have lots of choices and its overwhelming. Believe me, if there were only 3 loaves of bread in the store and you were hungry, you'd snag up the best looking one as quickly as possible. Instead you're in Costco and there are 500 loaves, all in super-sized portions.

Don't listen to the bottom feeders that tell you to wait. If you want to buy a house, the world is your oyster. Find a great deal - there are tons of them out there, and step up to the plate. In 12 months, when the inventory is shrinking and prices start to turn up again, you'll thank your lucky stars you got in. Have you seen interest rates lately? In case you haven't, check them out- they are terrific.

Best

Derek Eyring
  • October 31 2007
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Profile picture for Angelique01
How on earth do you know, Derek, that inventory will shrink and prices will "turn up again" in 12 months? I sure want your crystal ball.
  • October 31 2007
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Profile picture for dogma1111
I have been looking for over a year now and have watched the prices continually fall. I am glad I did not get into a house when we started because I would have lost value. I am currently making lowball offers until somebody bites. I would not pay asking price in this market if I were you and this is what my realtor also says. Offer anywhere from 10% - 15% less.

Kevin
  • October 31 2007
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