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Answers (16)
- kimber57
- Contributions:6
Thanks to everyone's imput, keep them coming. Nathan, I wasn't comparing to Crawford as much as the actual street and a 10 mile radius. I have knowledge of the area as I know others living there. The land is not of interest only the ranch style home. I am sure without the house the land would never sell. Most of it completely on a hill down to an area of not any interest. My main concern is resale in the market in the coming years. The original house is 2 bedroom however lists at 5 br with 3 in basement without windows, also not of interest. The house needs decking and there are water issues and a 18 year old septic system. All of these would need to be addressed with a fair price. I suppose the best thing is to get an apprasial for the work needed and what the bank would lend. My issue is the land may be of value for apprasials but nothing else. Thanks again for your thoughts!
- Pasadenan
- Contributions:21466
I agree with Nathan - it is NOT "never pay the highest in the neighborhood for a home" -
But rather, know why you are buying it, why you are choosing that area, and know what the risks are.
Which is what I posted in the first place.
"Rules of Thumb" are not "absolutes", they are a guideline for a starting point.
And if one is buying 14 acres in an area zoned for less, it may also be worthwhile looking into the subdivision options so that you know what your future choices might be.
(And as you can tell from my Avatar, I have an interest in the most expensive homes in a neighborhood or city, even if they are not for sale, and even if I could never afford it).
But rather, know why you are buying it, why you are choosing that area, and know what the risks are.
Which is what I posted in the first place.
"Rules of Thumb" are not "absolutes", they are a guideline for a starting point.
And if one is buying 14 acres in an area zoned for less, it may also be worthwhile looking into the subdivision options so that you know what your future choices might be.
(And as you can tell from my Avatar, I have an interest in the most expensive homes in a neighborhood or city, even if they are not for sale, and even if I could never afford it).
- Helen LaPrairie, "Helen LaPrairie"
- Contributions:4
Hi there - Yes, I agree with the agents that you should never pay the highest in the neighborhood for a home -- but just because the list price appears way over, be sure to check that the actual "closed" or "Pending" sales are in that same $200k range- The seller of the $500k home is either in fantasy land or the others are reality- or, the others are possible short sales with unrealistic list prices that may also never close, or never close at the list price you see. Be sure to check with your realtor about what the truth about value is in the neighborhood you are looking for and then determine whether or not the house is something to consider. Whatever happens, the value to your lender is what the appraisal will bring in, so even if you purchase any home that is higher than some of the comps, the value for your purchase price has to be proven by the listing office, otherwise you can walk- Again, discuss with your agent and go from there. Good luck!
- Nathan Bauman, "NathanBauman"
- Contributions:1
There are several good answers already here, but living in this area I thought I would still throw my answer into the ring.
If I am hearing you correctly this home has something that the other homes in the area aren't offering you. My question would be, what is it? In your opinion is the home just over updated with cosmetics or are there tangible differences that set this apple apart from the neighborhood of oranges?
In a community like Taylor Mill you have a hodge podge collection of rural, urban and suburban areas. Old forested areas and open farms once dotted this area. That is true of many of the areas here in NKY. However, Taylor Mill still has all throughout the city limits this eclectic mix of lifestyles all on top of each other. It truly is one of the more unique communities here in Northern Kentucky. I know which property you're speaking about. I can offer you this, the home you're looking at has nearly 14 acres of land attached to it. It is rather secluded and shouldn't be viewed by the homes built on adjacent Crawford St. Additionally, I can't think of another listing in this city that has been on the market offering this style and level of home with so much acreage attached to it.At least not in the last 4 years. Much of their asking price is in that land, but the home itself would command a good price in this market and community on its own.
My suggestion is this, weigh your needs and wants. Is it the home you want, the land you want, or both? You can still try your offer on the home, but go in knowing that there isn't another home on the market like this one in the area or really in the 3 counties around it.
I hope that answer helps you make an informed decision.
- Darrell Self, "Darrell Self"
- Contributions:349
Time to run not walk to another area. The home will not appraise and it will not sell in the future for what you pay.
- wetdawgs
- Contributions:26854
Run the other way as fast as you can. My rule of thumb is to never look at the most expensive house in the neighborhood.
- Pasadenan
- Contributions:21466
Regardless if it is priced right for what it is or not, buying the most expensive in an area is usually not a good idea as it makes the property harder to sell, and makes it less likely for appreciation due to neighborhood improvements. It also makes it less likely to be worthwhile to do a future addition.
There is no rule of thumb for how much to offer, but some people use some appraisal and contingency methods to try to get a price they like.
Most people that list at substantially over market value don't have any intention at selling at market value.
But the general rule is to neither buy the most expensive, nor the smallest for any given area. If you buy outside the norm for an area it will always be outside the norm. Sure, some people like that as it gives them neighborhood recognition. But you do need to know why you are buying and why you are choosing a specific area.
There is no rule of thumb for how much to offer, but some people use some appraisal and contingency methods to try to get a price they like.
Most people that list at substantially over market value don't have any intention at selling at market value.
But the general rule is to neither buy the most expensive, nor the smallest for any given area. If you buy outside the norm for an area it will always be outside the norm. Sure, some people like that as it gives them neighborhood recognition. But you do need to know why you are buying and why you are choosing a specific area.
- Billie Myers, "Billie Myers"
- Contributions:1
In my years of experience, I have found that "Overpriced" homes will help sell the fairly priced homes in the neighborhood as Buyers recognize the true value. The overpriced home will sit, becoming stale on the market, waiting for the Sellers to get real with their price. Meanwhile, many Buyers want to walk through the house thinking they are going to find something fabulous in the home. However, Sellers get annoyed because they have had a lot of showings and no offers at their ridiculous listing price because their home had nothing Extra Special to offer the buying public. I don't understand why a Real Estate Agent would want to spend advertising dollars on a home that won't sell......
- kimber57
- Contributions:6
This is all good info for a new person.
Checking closer the house was listed 7/2010 for 549K, lowered to 500K 10/2010, removed listing 12/2010, re-listed 500K 2/2011.
No movement at all.
It's probably true that it's a diamond in the rough. But the area has never been the best, they just built a house they wanted, lived there for 18 years and now moving out of state. I think everyone thinks their home is worth more. Even the tax they are paying is only 250K, that can be low but I don't feel like it's that low. I guess my thoughts are to offer what its worth for the area and hope not to insult. They have to know they are way out of the range in their area.
Checking closer the house was listed 7/2010 for 549K, lowered to 500K 10/2010, removed listing 12/2010, re-listed 500K 2/2011.
No movement at all.
It's probably true that it's a diamond in the rough. But the area has never been the best, they just built a house they wanted, lived there for 18 years and now moving out of state. I think everyone thinks their home is worth more. Even the tax they are paying is only 250K, that can be low but I don't feel like it's that low. I guess my thoughts are to offer what its worth for the area and hope not to insult. They have to know they are way out of the range in their area.
- Judy Gonzales, "Judy Gonzales"
- Contributions:2
Unfortunetly this house will probably not sell. if the lender has the
appraisal done and is only appraised for the lower amount then the
buyer would have to come up witht he difference. And that is highly
unlikely. I do not believe that there is a rule of thumb. just know that
it will not sell.
appraisal done and is only appraised for the lower amount then the
buyer would have to come up witht he difference. And that is highly
unlikely. I do not believe that there is a rule of thumb. just know that
it will not sell.
- Christine McGinty, "whitemountainagent"
- Contributions:273
Sounds like a diamond in the rough or they just think their property is worth more than what the market will bear. All very good points in the other answers. A 2 year old appraisal is irrelevant and anything more than 90 days in this market is not generally recognized in an appraisal. In AZ appraisals are covered in the inspection period. Check into that. It it does not appraise, your lender will not lend anymore than the appraised value and I'm sure you would not want to purchase a house that is selling for more than what it appraises, would you? Sounds like the seller needs a reality check or an agent to better guide them as to what the current value of their property is.
- hpvanc
- Contributions:2579
A 2 year old appraisal is completely irrelevant today. Unless they have one that is less than 90 days old, it will not be relevant. You need to get an accurate picture of current value before you make an offer, it may not even be worth the $300K.
Unfortunately I don't know what your options for getting an accurate estimate before you make an offer are. If it really is that different in value from the surrounding community, AVM's like the Zestimate are not very accurate under those circumstances. Agents will suggest a CMA, but I don't have much faith in their accuracy it all comes down the motives and skills of the agent, and there is no audit or review process on them. Do you know a banker that may have a grasp of what the maximum amount they would lend in that area might be, and adjust accordingly?
Unfortunately I don't know what your options for getting an accurate estimate before you make an offer are. If it really is that different in value from the surrounding community, AVM's like the Zestimate are not very accurate under those circumstances. Agents will suggest a CMA, but I don't have much faith in their accuracy it all comes down the motives and skills of the agent, and there is no audit or review process on them. Do you know a banker that may have a grasp of what the maximum amount they would lend in that area might be, and adjust accordingly?
- kimber57
- Contributions:6
They have a two year ago appraisal that is like 550K. That was high at the time for the house but is the nicest house in the area. I just have a problem bidding on a house that is over priced being the nicest house. I have done a lot of research and can't find anything in this city worth this amount. I don't want to insult the homeowner but they are only paying tax on 250K so I would hope they may not get as much as they are asking. Being new at this I really put a lot of weight on the houses in the area.
- Steffnie Parsons, "Steffnie"
- Contributions:76
One thing that is true is a bank will not lend a penny more than the appraised value. So, if the appraisal comes in at $200k then that is all they will lend. There are tons of properties that are worth way less now than what they paid for 2-3 years ago. Will the value go up in the next year or two, we all sure hope so, but for now offer what you think is fair. As Daniel said, being around other homes with a lower value will bring the value of this home down.
- kimber57
- Contributions:6
The house appraised at 500K however nothing in the area is listed or have been purchased over 200K. The home owner built/purchased 18 years ago when home values were high however only pay tax for their property at 250K. Would it be an insult to offer 300K?
- Daniel Hamad, "AttorneyHamad"
- Contributions:146
The price is $500k or the value is $500k? Being surrounded by cheaper homes often makes your home worth less, but the asking price may already reflect that.
This is not legal advice and is not intended to create an attorney-client relationship. You should speak to an attorney for further information. The poster is licensed only in CT & NY.
What is the rule of thumb on a house that is so over priced for the neighborhood it is in.
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