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Answers (7)
- space_acer
- Contributions:4311
My solution...
Take pre-bubble prices say 1997 for CA or Boston region, 2002 for all others regions, and factor in compounded inflation (30%). Maybe 5-10% or it may be more like 50-60%.
http://www.housingbubblebust.com/OFHEO/Major/NorCal.html
Take pre-bubble prices say 1997 for CA or Boston region, 2002 for all others regions, and factor in compounded inflation (30%). Maybe 5-10% or it may be more like 50-60%.
http://www.housingbubblebust.com/OFHEO/Major/NorCal.html
- space_acer
- Contributions:4311
"but I can not let the fear of the future paralyze me."
Fear is an emotion. The best you can do is study rational thinking.
As such a course in financial analysis will serve you well to avoid
such as fear.
But if there is anyone out there who would like to buy some
Qualcomm stock at $500/share regardless of the P/E Im sure
they are fearfull it may go up some more ?
Fear is an emotion. The best you can do is study rational thinking.
As such a course in financial analysis will serve you well to avoid
such as fear.
But if there is anyone out there who would like to buy some
Qualcomm stock at $500/share regardless of the P/E Im sure
they are fearfull it may go up some more ?
- Harrison Painter, "HarrisonPainter"
- Contributions:258
Ace,
I do understand your point, and that does concern me too, but I can not let the fear of the future paralyze me.
So taking into account the issue you have presented, what is your answer/solution to the question?
I do understand your point, and that does concern me too, but I can not let the fear of the future paralyze me.
So taking into account the issue you have presented, what is your answer/solution to the question?
- space_acer
- Contributions:4311
"fair market comps sold in the last 6 months within 1 mile"
Whats the point of comps considering prior history is bubbly and unreliable.. do these comps indicate further price declines ahead ?
If you have homes where the mortgage principle were reduced due to lender/bank renegotiation (so the Obama-nation doesnt go into foreclosue) doesnt that void all sales history. The same is true with foreclosures. If homes in Stockton, CA all sold for $500K and many went into forclosures because no one can pay the mortage, how valid is are past prices ?
Bottom line... 1- 6- 12-month (and even 5-10 year) comps are irrelavent opinions. None really provided what the Fair Market Value ever was.
Whats the point of comps considering prior history is bubbly and unreliable.. do these comps indicate further price declines ahead ?
If you have homes where the mortgage principle were reduced due to lender/bank renegotiation (so the Obama-nation doesnt go into foreclosue) doesnt that void all sales history. The same is true with foreclosures. If homes in Stockton, CA all sold for $500K and many went into forclosures because no one can pay the mortage, how valid is are past prices ?
Bottom line... 1- 6- 12-month (and even 5-10 year) comps are irrelavent opinions. None really provided what the Fair Market Value ever was.
- Harrison Painter, "HarrisonPainter"
- Contributions:258
When you ask for an agent to do a CMA, make sure they break it down into different sectors. Many agents fail to do this, and it does not help you make a good decision unless they do.
1. At least 3 fair market comps sold in the last 6 months within 1 mile.
2. At lease 3 bank owned (foreclosure) comps in the last 6 months within 1 mile.
3. At least 3 short sale comps in the last 6 months, within 1 mile.
4. 6 and 12 month breakdown of ALL bank owned, short sale, and fair market sales. How many were listed, how many were sold. Compare list and sell prices and see what percentage below list your market is saying.
5. Also look at the days on market of these properties closely, and take not of any price drops along the way.
Now, there is a lot more work to be done here, but this will at least be a good starting point to understand the neighborhood, what is going on there, and create your offer strategy.
There is no way a Realtor can offer a nationwide blanket statement of what percentage to offer from list, as each geographic location will have its quirks. A GOOD Comparative Market Analysis will help, just make sure you coach your Realtor on how to do it as stated above, because most of them will just give you the 3 highest fair market comps and move along.
If I were to make a blanket statement, I would say to start at about 70% of fair market. Let the Seller counter, and that will hopefully show how motivated they are.
I hope that helps.
- Harrison
1. At least 3 fair market comps sold in the last 6 months within 1 mile.
2. At lease 3 bank owned (foreclosure) comps in the last 6 months within 1 mile.
3. At least 3 short sale comps in the last 6 months, within 1 mile.
4. 6 and 12 month breakdown of ALL bank owned, short sale, and fair market sales. How many were listed, how many were sold. Compare list and sell prices and see what percentage below list your market is saying.
5. Also look at the days on market of these properties closely, and take not of any price drops along the way.
Now, there is a lot more work to be done here, but this will at least be a good starting point to understand the neighborhood, what is going on there, and create your offer strategy.
There is no way a Realtor can offer a nationwide blanket statement of what percentage to offer from list, as each geographic location will have its quirks. A GOOD Comparative Market Analysis will help, just make sure you coach your Realtor on how to do it as stated above, because most of them will just give you the 3 highest fair market comps and move along.
If I were to make a blanket statement, I would say to start at about 70% of fair market. Let the Seller counter, and that will hopefully show how motivated they are.
I hope that helps.
- Harrison
- Svetlana Stolyarova, "RealtorSvetlana"
- Contributions:311
The best answer would be - ask your agent to prepare the Comparative Market Analysis for the neighborhood where you are willing to buy. Please pay attention to information about sold prices, Asking Price / Sold Price ratio, Days on market. Review this info, evaluate the position of your desirable property, and make your decision.
BTW, on some segments of our Cleveland market the adequate buyer's question would be "How do I know how much to offer? 5 % ABOVE asking...? 10 % ABOVE...?" We experience a harsh competition between the investors on some of real hot deals.
BTW, on some segments of our Cleveland market the adequate buyer's question would be "How do I know how much to offer? 5 % ABOVE asking...? 10 % ABOVE...?" We experience a harsh competition between the investors on some of real hot deals.
- Nathan Dart, "Nathan_Dart"
- Contributions:9
Each market is different, there is no rule of thumb for regular listings. It all depends on how much the seller needs to get rid of the home.
Foreclosures - start around 90% of asking price, unless asking price is way out of whack.
Short Sales - around market value minus 3%.
It's all about justifying your offer, have your agent pull comparable sales and include them with your offer. Show the seller why your lower offer is fair based on market value.
If they will not work with fair market value or less, move on to the next one. The next 18 months is the buyer's time to get a deal... Too much inventory for sellers to be tight, they have to bend at least a little to move the properties...
Hope this helps,
Nathan
Foreclosures - start around 90% of asking price, unless asking price is way out of whack.
Short Sales - around market value minus 3%.
It's all about justifying your offer, have your agent pull comparable sales and include them with your offer. Show the seller why your lower offer is fair based on market value.
If they will not work with fair market value or less, move on to the next one. The next 18 months is the buyer's time to get a deal... Too much inventory for sellers to be tight, they have to bend at least a little to move the properties...
Hope this helps,
Nathan
How do I know how much to offer?
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