Zillow Advice: Pricing - 3 2 1 buydowns vs price reduction, a great way to sell your home

Doug- I'm new to Zillow.Read ...

Thu, 26 Mar 2009 23:51:00 GMT

Doug- I'm new to Zillow.

Read your post regarding the benefits of Seller-Funded Buydowns.

I also read how confused the Realtors are by the concept.

They understandably prefer Standard Price Reductions because SIMPLE MATH is SIMPLE... Yet that may not be the BEST approach for their Sellers&Buyers.

I have been involved in the Real Estate and Mortgage industry since early 1985. I too was intrigued by the financial impact of a Seller-Funded Temporary Buydown as compared to a Standard Price Reduction.
The numbers don't lie!

Just recently we launched a new company at: www.321ADVANTAGE.com ...where we do the math for you.

Please check out our site and let me know what you think.
THANKS!
Barbara Q.

Please Note: We are NOT Realtors or Lenders...think of us asFinancial Home Stagers! - We make homes more interesting, appealing and attractive FINANCIALLY!

It is difficult to pass that ...

Sat, 15 Nov 2008 00:42:00 GMT

It is difficult to pass that on to the prospective buyers in a language that they all understand. Most people look at their front number! Athough it is a great idea!

They already have that plaque ...

Fri, 14 Nov 2008 12:50:00 GMT

They already have that plaque on their wall from the 2008 Q1 numbers report. They reported wrong numbers and were caught by a watchdog group. The "unethical and unprofessional" starts at the top and permeates down in the NJAR. The Southern Shore areas are especially dirty.

NJAR Error

In PA I have had very good experiences buying houses with my Agent. I bought and sold several times using her, I wish she hadn't retired.

Hey I'm sure the agents at ...

Fri, 14 Nov 2008 02:53:00 GMT

Hey I'm sure the agents at the Jersey Shore will be glad to know they're the best at something. (Not sure if the NAR has a plaque yet for "most unethical and unprofessional" but thanks for the nomination!)

NJ2001 and 2002 was when ...

Fri, 14 Nov 2008 01:17:00 GMT

2001 and 2002 was when the unsupported appreciation at the Shore started. The ARM and other junk loans were the majority of the problem, most were speculation. Yes, prices are dropping back to those levels, and has reached it in some houses already. The majority of the prices are still 51% over-valued and will sit until they join the Foreclosure ranks, or their listing expires.

BTW:There are also are some of the most unethical and unprofessional Agents I have ever seen at the Shore (Jim Sullivan is the exception). Luckily many are going back to their previous occupations.

It seems like the seller ...

Thu, 13 Nov 2008 19:50:00 GMT

It seems like the seller paying for points would be easier and offer a similar benefit. Buyer saves money on interest and seller doesn't lose as much money as an outright price reduction.

BW--1) Which historic levels ...

Thu, 13 Nov 2008 16:00:00 GMT

BW--

1) Which historic levels are you referring to? 60's, 70's 80's ??

2) Of course, foreclosures put downward pressure on values, but a good appraiser will try to stay with open market purchases when giving a value. If it's known that one particular sale (out of 5 or 6 closings) in a neighborhood was due to mitigating circumstances ie divorce, death/estate sale, relocation. or foreclosure--that comp may be in the appraisers report with the circumstances mentioned--but they will give greater emphasis to the open market purchases. Those (MLS or FSBO) sales negotiations can take place on many levels: washer/dryer/sub zero/crystal chandaliers included, seller paid closing costs, seller paying points, builder funded- first years condo fees, take your pick. Doesn't any seller concession artificially prop up a price then? The purpose of this thread was to give realtors and sellers another bargaining chip. If you want to look at the program that really caused artificial inflation of values--the option ARM with NO MONEY DOWN. Let's give the $50,000 salaried buyer a $500,000 house with nothing out of pocket, and let him pay just a fraction of the interest due the first few years. It was the worlds biggest ponzi scheme and the last buyers in were the ones hardest hit.

"What we're talking about ...

Thu, 13 Nov 2008 02:04:00 GMT

"What we're talking about is offering your seller an alternative to price reductions. Each price reduction has a negative effect on the valuation of the entire neighborhood, and becomes a perpetual spiral downward. Having the seller offer an alternative to reduction has the effect of stabilizing the values."

No. What you are trying to do is artificially keep prices up. Foreclosures are driving prices down regardless of your creativity. Prices are dropping at the Shore, and will continue until they reach their Historic Levels.

395--The home still has to ...

Wed, 12 Nov 2008 22:08:00 GMT

395--

The home still has to appraise...we're not talking about jacking up the price and "building in" the same amount as a concession. What we're talking about is offering your seller an alternative to price reductions. Each price reduction has a negative effect on the valuation of the entire neighborhood, and becomes a perpetual spiral downward. Having the seller offer an alternative to reduction has the effect of stabilizing the values. The most popular seller concession is for closing costs, and/or points (points being a permanent buydown). I threw the 3-2-1 temporary buy down out there as another option to give buyers, sellers and realtors something else to consider when negotiating a contract.

AZRob is right. We're having ...

Wed, 12 Nov 2008 16:59:00 GMT

AZRob is right. We're having way too many appraisal problems as it is. Simple fact is if you're priced too high the home won't sell or won't appraise. The home needs to be priced correctly. If you have enough equity in your home this may be an option, but ONLY if your home is priced right.