Profile picture for skanny

would $775,000 be an insulting bid for this property?

  • July 02 2010 - Huntington Beach
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Answers (10)

Profile picture for JeanKelly
Ohhhh.. 775K seems low based simply on asking price, but look at all the variables.  What 3 sales of similar homes in the neighborhood in the last 6 months brought in?  Combine the Dollars, divide by the combined square feet of comparable properties.  Bingo a starting point.  Multiply by the square feet in the comparable subject property.  Where are you in relation to: 1) Your 775K and 2) the asking price.

Talk to your agent and have them do the footwork, even if it is a FISBO.

Have an agent get an agreement from the seller to pay a commission, and get some good representation.
  • July 04 2010
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What is your goal? Is it to get a "steal" or just pay no more than market value? Have there been ANY offers on the home? If so, have your agent find out why they didn't work out (it isn't always price). Ask if there is anything else important to the seller (maybe living there rent free for 2 months or giving them an early release of earnest money).
  • July 03 2010
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Although 775,000 is a low ball offer.  If you want it and don't care about losing the deal make the offer.     Do I think it will be excepted probably not but You never Know.
  • July 03 2010
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Asking Price, Shmasking Price!  The listr price could have come from the moon, or even further out, Robin Williams.

Have an agent or appraiser present you with a price to make sure your $775,000 isn't too high.  Once you have your own people give you a value, then negotiate off that.  If the real value is $1 million then your $775,000 seems low, but it is always worth presenting.

Have the agent or appraiser also calculate market balance using Months Of Inventory (MOI).  First do a city-wide MOI by finding all active single-family residentials, all sold single family residentials in the last 182 days, then do this
Actives/Solds = N / 2 = M x 12 = MOI for the city
The focus in on your target property by tightening the search criteria by a price range (here, try $600,000 to $1,400,000 or tighter) then add in the suibdivision or high school or middle school, etc, then do the same
calculation this this criteria's Actives and Solds in the last 182 days.

Now you have the city-wide MOI and the subject MOI.  The MOI alance point is 6.5 MOI.  MOI's greater than that define a buyer's market, and declining value.  MOI's less than that define a seller's market and increasing value.  It is not unusual at all to calculate an MOI for a specific subject that is much worse or much better than the city average.  For example, in El Paso, the city is at 6.5 MOI but many of our expensive properties are at 12 MOI or even 36 MOI.  In short far far over supplied.

If you find the subject property to have an MOI over 9 or so then it is in a difficult selling market with true declining value.  If the MOI is at 24 or some other high number then you can use that to help couch your low offer.  For most sellers it is the first time they are even aware of MOI and they may see your point and sell at your terms.

If the market analysis shows the property to be properly priced and the MOI is at balance or lower then making your case will be harder to do.

Last, throwing all reason aside, some sellers will just sell to get it off their backs.  We just brokered a commercial sale where the seller took 1/3 of the market value.... this is very rare but one never knows the full motivations of any buyer or seller.
  • July 03 2010
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I don't think you need to worry about hurting any one's feelings. Your concern should be will that be good  enough to purchase the property. .... Happy funding, Rudi
  • July 03 2010
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If you are making offers just to see what happens, then yes, it's insulting.
If you are serious about buying a house under the 'current market price' then you have got to make an offer.

Find an agent that understands your motivation and desire, and someone you feel a connection with. Then hang on to him. Your loyalty will be your 'dowry' in exchange for the work involved in preparing several offers.

Every buyer and seller have different needs. If your offer is the only interest, and it can help the seller move on to other opportunities, everbody wins. Just don't fault your agent for several rejected offers, and understand that his clients that are writing offers 'closer to list' are in a more urgent timeframe. 

As the saying goes, "Realtors don't set prices, buyers and sellers set prices, we just put you guys together!

Good luck with your adventure! 
  • July 02 2010
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Ask the agent you are working with to provide you with comparables on this property so you are informed on what homes in that area are selling for in that area.

Natalie Feldman
GreenRock Real Estate Solutions
  • July 02 2010
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I don't know the area...but that sounds insulting.
  • July 02 2010
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Profile picture for wetdawgs
Your question is not linked to a specific property.

A 65% offer is rarely accepted, and is probably not worth your time.   Why?  if 65% is really the fair market value, then the owner's are unrealistic.    If the property is a short sale, the bank makes the decision and doesn't give properties away.

If the property has been on the market for several years, and is not a short sale or foreclosure, go for it.

  • July 02 2010
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Profile picture for skanny

For the record, the asking price for the property is $1,195,000.  (It's been lowered)

  • July 02 2010
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