Profile picture for ephgrave

Would you advise an offer like this??

I'm looking in Farmington, CT at a house that has been on the market for three quarters of a year and price has dropped from 480k to 449k.  I'm thinking of offering 85% of 449K.  Do you think I'm off base or just right in this market.  Caption on the house states "they have relocated and would like offers..."
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December 22 2010 - Farmington
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Answers (19)

Dear Ephgrave,
    In this age of information gathering, you likely brought the property in which you are interested to the fore and have piqued the curiousity of other potential buyers. (You've done the Seller a favor! ) The nature of your question tells me you could really benefit from client-centered representation, where your Realtor has a fiduciary duty to you and your conversations with him/her are confidential. 
All the best,
Margaret Shea, William Raveis RE
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January 18 2011
Profile picture for SoCal_Engr
I'm sorry. Why can't you all leave it at "we do this for a living, so we just have more experience and have more exposure to what-could-go-wrong"? Instead, you all have to roll out the tired "we're pros, specialists, you're not" lines.

"Most information is public however, if you watch some of the questions on this site, you can see that much of the public information is often incorrect, misleading and/or inappropriate."

Correct, not all public info is correct. However, it is not that hard to research most of the information. Also, what good is it when most every REA has a "buyer needs to verify info, broker/REA not liable" clause"?

"If you don't have a REALTOR you are off on your price by at least 6% just for a starter in most cases."

Based on what? Elimination of the commission? The buy-side of the commission? Lack of access to "recent sold" comps? Inability to do some common-sense comparisons and price estimations? Where does your number come from? My own personal estimates-of-value have been right in the ballpark, and sometimes less biased, than those provided by local REAs.

"Unless you are "in the business" you do not negotiate in a local market on a regular basis.  Therefore you are ill equipped to deal with a REALTOR on the other side of the deal."

Probably the most compelling of your arguments. Are you saying that non-REAs will be negotiated with in bad faith by local REAs? That the famous NAR ethics do not apply to non-represented consumers? Does this same lack of reciprocity in negotiations apply to non-local REAs?

"All comparable properties are subject to interpretation.  Do you know what constitutes a "Comparable Property"?"

There has already been a general consensus that a CMA is only as good as the REA. Sucky REA, sucky CMA. What prevents a reasonably intelligent and conscientious consumer from developing reasonable estimates-of-value, or selecting reasonable comparables?

"As with another profession the doctor who treats himself is a fool."

I believe the misplaced comparison you are searching for is "an attorney who represents himself has a fool for a client". Either case, enough with the REA/Doctor REA/Lawyer comparisons. Your profession does not come anywhere near the level of rigor/impact of these, though the damage done by an inexperienced, ill-informed, or ego-centric REA can oftem be just as devastating.

Do REAs provide a service? Yes. Is it uniformly valuable for all consumers, or provided at a consistent level by all REAs? No. Is it worth the traditional commissions? Probably not, but maybe.
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January 16 2011
Victiem has a poor understanding of the reasons for using a REALTOR.  Here are just a few with his/her comments in mind:
1. Most information is public however, if you watch some of the questions on this site, you can see that much of the public information is often incorrect, misleading and/or inappropriate.
2. If you don't have a REALTOR you are off on your price by at least 6% just for a starter in most cases.
3. Unless you are "in the business" you do not negotiate in a local market on a regular basis.  Therefore you are ill equipped to deal with a REALTOR on the other side of the deal.
4. All comparable properties are subject to interpretation.  Do you know what constitutes a "Comparable Property"?
5. As with another profession the doctor who treats himself is a fool.

Note: 1. If your opinion is correct, why do attorneys and even other REALTORS seek me out for advice? 2. Can you do the "Math'?  3. Do you know what the "Math" is?
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January 16 2011
Hi There Ephgrave,
As a Broker, I typically don't give a great amount of weight to "Asking Price" and I'll tell you why.

I have gone on listing appointments, and the home may only be worth $100,000 on a good day.  I have to know these things, because once I do sell it, it will have to appraise or the bank will not make the loan.  So it makes no sense to try and overcharge.

The sellers may think  that they have the best thing since sliced bread, and that it is worth every penny of $135,000.  Never mond that the exact home, just two streets over with all new paint, carpet and appliances just sold for $99,750.  And two more just like it for that same range. 

So even offering them 85% of their $135,000 would still put you at $114,750.  Or $14,000 MORE than the last 3 sales.

If the home is listed with a broker for sale, the Listing Broker will split the commission with the Buyer's Agent OR keep it entirely to themselves if you don't have an agent.

So, you get an agent for no additional cost AND they will the tools and knowledge to save you the $14,000 in the example above, OR go at it alone and hope for the best.

I hope this has helped clear things up a bit.

Good Luck with the purchase! 
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January 16 2011
Profile picture for victiem
Hello ephhrave,

Don't ever hire a realtor. Their time has gone. Nobody needs a realtor when you have eyes and resources available to figure out. I am telling from experience. I hired a realtor and he tried to over sell me playing with the listing agent. I backed out. Remember, the more money you pay for the house the higher the commission he gets out of the deal, so there is no point in saying that you get service and honest advice from them. A real estate agent has no more information than what you can get your own. Believe me, telling you from experience. Period.

What size of house is it? Year built. Condition. Sqft, Number of bed and bath, garage, Lot size. location . Tell me these I will help you figure out a best price.
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January 14 2011
I agree with Jack.  No person can determine a home's worth.  It is simply a question of what the market will bare.  A professional is the best way to go. 
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January 03 2011
ephgrave,  Thank you for identifying EXACTLY why ZIllow is a fantasy for most buyers.

Your percentages, while a common missconception, have nothing to do with value or trying to figure out what to offer.

PLEASE, PLEASE, PLEASE find a competient REALTOR and ask them to do a CMA for you. This will idientify the real market value and give you a good idea what to offer.  ASKING PRICE GIVES NO DOCUMENTABLE IDEA AS TO VALUE!

And, just as an added value, in most cases the fees of YOUR BUYER"S AGENT are paid by the listing broker or the Seller.  Sooooooo.... you get this service at no direcet cost to you.

What could be a better plan?

Good Luck!
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January 03 2011
Profile picture for SoCal_Engr
@ Julie, Al and Stephen...

Your responses are exactly what should not happen to a user on Zillow's forums. Very little, or no, informational content relating to the OP's questions. Offer to help, contingent on a "contact me" - which defeats the purpose of allowing folks to post questions anonymously.

I know it sounds like splitting hairs (after all, the OP did ask, right?), but it's just that Zillow's forums are geared towards providing answers on the forums, no hooks or contact required.
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December 26 2010
As a local agent (Berlin CT) and a very active State Certified Appraiser for a number of years I could help. I can pretty much tell you exactly what the home is worth. If you would like my help you could reach me at [contact info removed by moderator]
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December 26 2010
Profile picture for the_country_hick
What is the house really worth now?

If you offer 15% under the new asking which is 25% over present market value you still are overpaying.

I would feel fine offering 15% under present market price. People doing that are helping prices to drop for everyone.
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December 23 2010
I am an Agent for Farmington and would be happy to offer
professional assistance. Typically this does not cost you anything
because the seller pays the commission. The answer depends
upon a lot of things, including the size of the house, location,
style, age, etc.  My web is [contact info removed by moderator], contact
me if I can help!
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December 23 2010
If you don't have an agent ....hire one...it costs you nothing...they will get you a better deal then you can get for yourself in most cases.
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December 23 2010
I don't see anything wrong with the offer.  House prices in Farmington have held their value.  There was a house on Strawfield that had the same caption. 
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December 23 2010

Make your offer, sounds like they have 2 house payments. If you have a realtor I would look to see when they bought the home and how much was financed.

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December 23 2010
Profile picture for sunnyview
Sounds reasonable. You are making your offer in winter which is good and although you may not get the house for your offer price it is worth putting one in to see if the owners are willing to negotiate with you.
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December 23 2010
Hello!

I am a Farmington Agent and would help you out with anything that you need in real estate.  I you send me the address, I can check into the situation (maybe its a short sale) then I can pull recent comps for you to see what the going price is.  In this market, ANYTHING is possible!  Email me at [contact info removed by moderator]
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December 23 2010
Sounds like an OK place to start. I always tell my sellers to counter offer any offer these days because the buyer is always ready and expecting the seller to say no because they know they are making a low offer. So expect at least  one counter offer and maybe several.
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December 23 2010

Asking 15% off in this market right now is 'okay.'  Just be prepared that depending on their (seller's) situation they may or may not be willing to go with your offer.  Not being an expert in that part of the country, check to see if there are SOLD comps availabe from your local REALTOR or zillow.com.  But do make a clean offer when you are asking for a deep discount.  (Purchasing the home in AS-IS condition & have financing ready to go.)  Good Luck!  Let us know how it goes!

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December 23 2010
I don't know the Farmington market well enough to really answer your question which would be best answered by a local agent who know that market and neighborhood. But certainly as a Buyer Broker I would see nothing wrong in starting at 15% off. Try to make your offer as attractive as possible in other ways, offer to buy "as is " if this is in your comfort zone, have your financing lined up and offer to close in 30 days or less. You're beating them up on the price, so make the rest of the deal as clean and simple as possible.

Good Luck!
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December 23 2010
 
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