patrick.net

Can't hurt. IMO prices will drop to 1999 levels (or below) so your offer seems in line with where prices should go. Now good luck convincing sellers of the fact that the party's over. People will resist as much as they can as they still think their house is worth 06/07 prices.

In the mid-late 1990s my FIL's girlfriend sold this house on 10 acres for 1.5 million
http://maps.google.com/maps?q=serenity+ct,+alamo+ca

Prices have just begun their decline in Alamo and Lamorinda.

Oh and as far as offers, I would start just making lowball offers if you have the cash. If they say No, move on.

WOW! 10 acres? How big was the house? So much retail is going out of business in Walnut Creek and Danville which tells me people really dont have cash to spend on anything right now, and unless you have 20% cash to put down on the house, it is very difficult to get a jumbo loan. I also heard using stock options for a down payment is no longer an option for securing a jumbo loan.

Im not sure if Lafayette and Orinda are still holding up over Alamo. Both areas have great schools, but Lamorinda is a bit better and closer to SF. I really dont know much about Alamo other than the neighborhoods are very beautiful with slightly newer larger houses in general then Lamorinda.

I'd like to lowball as much as the next guy, but you do have to be logical. #1 why would they accept $950k? If the current listing is $1.3M, they would likely drop it to $1.2M first, then $1.1M, etc. There's no reason for them to chop $450k in one swoop. Your gap unfortunately seems too far at this point in time. #2 If your offer is less than what they paid, there are a few things to consider. How much do they have left on their mortgage? If they have been refinancing or paying off the mortgage very slowly, they may still owe around $1,075,000. If that's the case, they will have to decide which is better, foreclosure or shelling out $125k (for your $950k offer) just to be able to sell their house.

Plus, they are likely losing 6% (~$60k) to the agents. Putting their loss at $185k.

samsmom says

WOW! 10 acres? How big was the house? So much retail is going out of business in Walnut Creek and Danville which tells me people really dont have cash to spend on anything right now, and unless you have 20% cash to put down on the house, it is very difficult to get a jumbo loan. I also heard using stock options for a down payment is no longer an option for securing a jumbo loan.
Im not sure if Lafayette and Orinda are still holding up over Alamo. Both areas have great schools, but Lamorinda is a bit better and closer to SF. I really dont know much about Alamo other than the neighborhoods are very beautiful with slightly newer larger houses in general then Lamorinda.

The estate was 10 acres with a 11,000sf custom French/Plantation style home. The house was featured in Architectural Digest . It had sweeping views of Mt Diablo from one side, and the Danville range on the other.

camping says

I’d like to lowball as much as the next guy, but you do have to be logical. #1 why would they accept $950k? If the current listing is $1.3M, they would likely drop it to $1.2M first, then $1.1M, etc. There’s no reason for them to chop $450k in one swoop. Your gap unfortunately seems too far at this point in time. #2 If your offer is less than what they paid, there are a few things to consider. How much do they have left on their mortgage? If they have been refinancing or paying off the mortgage very slowly, they may still owe around $1,075,000. If that’s the case, they will have to decide which is better, foreclosure or shelling out $125k (for your $950k offer) just to be able to sell their house.

A rare horse property in Briones is supposedly under contract last I heard. They were asking 2.25M, sales price supposedly 1.6M.

It's all just starting to crash, literally just in the last few weeks. The high end is DEAD.

There are 5 properties in Happy Valley for less than a million. More and more homes are coming on the market in Lamorinda for less than 800k, some dipping in to the 500s. Tice Valley in Walnut Creek has more and more on the market.

Maybe at the very top end in Alamo/Diablo people will try to hold out longer and longer, but at the end of the day comps, people needing to sell, and less people unable to buy these homes will bring those prices way down.

I know contractors/builders and investors in that area, they are hurting and see the writing on the wall.

http://www.redfin.com/CA/Lafayette/3812-Happy-Valley-Rd-94549/unit-B/home/832755
http://www.redfin.com/CA/Lafayette/1072-Via-Alta-94549/home/1460218
http://www.redfin.com/CA/Lafayette/1170-Camino-Vallecito-94549/home/1836991
http://www.redfin.com/CA/Lafayette/3959-Cowan-Rd-94549/home/902136
http://www.redfin.com/CA/Lafayette/1075-Upper-Happy-Valley-Rd-94549/home/1627081

The fact remains, we are only at the very, very beginning of the upper end crashing, yet properties are already appearing in the desirable areas at early 2000s prices, some at 50% discounts, and we are in prime selling season!

<a href="/post/16448#comment-647594" rel="nofollow">Tude says</a>
A rare horse property in Briones is supposedly under contract last I heard. They were asking 2.25M, sales price supposedly 1.6M.
</blockquote>
Maybe there were special circumstances involved there. Kids inherited property and just wanted to sell it asap. People moving and didn't want to deal with issues from afar. Another possibility, (I don't know if this really works), is that someone could list a place at a ridiculous level and then come down a huge amount so that the buyer thinks they are getting a 50% discount, when in reality, the list price was extremely inflated. Comps would obviously clear that up.
In the present situation, the house has been sitting for sale for 75 days with only 1 drop in price...there's a reason for that. The seller doesn't need to sell quickly or can't drop the price. That means either you wait for the seller to come to the realization that he is overpricing it or the bank forecloses and sells it at whatever price they can get.
Put yourself in the seller's shoes. If you had a house to sell would you put it at $1.4M and then when 1 offer comes in at $950k, would you jump at it? No, you would either wait or drop it slowly, right? Even getting $1M over $950k is still $50k extra.

Wow, people on this site trying to make excuses for the recent radical drops (like somehow the properties aren't worthy, what about location is everything? Or it's just some one off event out of desperation, lol)...and for properties listed at previously unheard of prices sitting on the market for months. Reminds me eerily of people talking about the entire Bay Area market not too terribly long ago...

I know this market well, the writing is on the wall. Insiders know it, but most people just prefer the blue pill.

There's actually a great blog on the front page for tomorrow, there's a lot of pent up supply as well.
http://www.financialarmageddon.com/2009/06/waiting-for-godot-in-the-real-estate-market.html

If you read my post carefully, I wrote that I would watch the house sit all summer, with maybe 1-2 more price drops...say down to 1.15MM. If it is still for sale in Sept/Oct, which will mean it has been on the market around 6 months, I will make my offer starting at 950k. By then, they will be desperate w/ no offers and at least make a counter offer back to me. If they sell the place, oh well. I know there are a ton more houses on the market, and Im sure I will find one I like as much or more.

They need to sell the place due to a divorce. I dont know how much they owe on it...if anything. It is unfortunate they chose to divorce during a major downturn in the RE market, so Im sure they know they wont get an ideal price for the house.

Most homes around here have more modern finishes like granite and spa bathrooms. This house doesnt have that, plus it is a unique property only appealing to certain tastes, which I happen to like...even though it isnt neccessarily the most popular.

Anyway, I think it is worth a shot. This area is being heavily discounted right now...plus that other house went from a list of over 2MM to a sales price of 1.2MM that is a huge price break. Agents around here are nowhere near as optimistic/condescending as they were last year. They are much more open to making low offers. The worst that can happen is the seller says no.