Purchasing homes from the bubble

We are looking at buying our first home, and are noticing a trend in a significant number of the homes we are looking to buy. Most were purchased in 2008 during the housing bubble, for more than the current market value, and are asking $20-40k above similar sales in the neighborhood. Most of these homes have been on the market for 35-50+ days. We made an offer on a home at what we think is market price ($20k less than asking price), and they told our agent that they can't afford to take anything less than asking price, due to outstanding costs on their loan. What can we do as part of the negotiations?
  • May 30 2014 - Salt Lake City
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Answers (5)

Profile picture for San Diego Asset
$20,000 delta is a rounding error in my market areas.  With that said, a seller is under no obligation to sell for less than they will sell for.  Clearly, that seller is more motivated to get that $20K than they are to sell right now.  I agree with other comments.  Let them know you're still interested if the situation changes, or look for another home.  Or, if you really like the home, and it still makes financial sense for you, buy it for $20,000 more.  I see a lot of first time buyers in my area, trying to time the market.  They are naturally fearful about such a big step, and investment, and it's easy to get caught up into second guessing the market cycles, and thinking you've either "missed" the "bottom", or that prices might fall again, and allow you a better entry point.  Ultimately, you should consider how much you can afford, how good the available financing is, how well the home and community meet your needs and wants, and whether you believe that it will be a sound investment for you and your family, over time.  Good luck with this important decision.  
  • May 30 2014
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Profile picture for GMerino
Salt Lake City, is a different market - so the seller is expecting someone to offer above the valued price.  If the house is in a prime location I can see an offer more than the value but in Utah, not likely unless the person is actually in love with the property.

Keep looking, maybe this one is not for you!
  • May 30 2014
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Profile picture for hpvanc
At this point move on.  If you are still looking and it is still on the market in a couple of months you can always re-offer.
  • May 30 2014
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Option 1 is to look for another home.  I always tell my buyers and sellers that a home is worth what someone is willing to pay for it.  A seller can ask whatever they want for the home but if no one is willing to pay that price it is not worth the listing price.

Sounds like these sellers are set on their profit and not what the home is worth.  There are always creative was to make a contract more attractive to a seller; i.e. shorten time frames, increase deposit, make a clean offer overall.  You can certainly try these tips but remember if the seller is set on a price it will take them some time to realize no one is willing to pay the listing price and therefore the home is not worth what they are asking for.

And as a buyer remember that this is an investment.  The only investment you make that you live in with your family but still an investment.  
  • May 30 2014
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Profile picture for wetdawgs
Remind your agent that market value is not determined by what the owner owes on their mortgage, but what similar homes are selling for.    What can you do?   Say "thanks but no thanks, contact me if you change your mind ... I might still be interested" and move on.    (35 to 50 d on the market really isn't that long in most communities)





  • May 30 2014
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