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Low Balling Properties...?


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2011 Feb 15, 3:33pm   3,449 views  8 comments

by Barney_Franks   ➕follow (0)   💰tip ()  

I have just started looking for property. A primary residence near lake tahoe, I just want to get a feel for the market for the moment, seems to be still falling and suffering from a hangover of misplaced optimism, as is, for the most part the rest of the country.

I was wondering what kind of success rate anyone who has bought a house in this falling market have had w/ low balling on properties? There is quite a lot of foreclosures (REOs) up here, most priced way to high in my opinion.

Personally, I think prices have a way to come but it is as any realtor will tell you it's "always a good time to buy", I would add a addendum to that...."provided you get it for the right price!"

When the gov't programs have finally abated, the banks flood the market w/ houses nobody wants (or can get financing on) prices will resume heading south. In any case, will be interesting to see what the spring brings......

#housing

Comments 1 - 8 of 8   

1   BuyerBeware   2011 Feb 15, 10:15pm  

I have been noticing more and more that it is the realtors that are listing houses for ridiculously low prices in hopes of getting a bidding war started. So keep an eye out for one of those and you may get a good deal.

2   tatupu70   2011 Feb 15, 10:37pm  

Don't listen to Thomas. Your best bet is doing the research and seeing what homes are actually selling for. That's the market. If you bid under the market, then you won't have much success. If a house is overpriced and you put in a lowball bid that is, in fact, the market price--then you might have a chance. Although even then you probably will not. You're better off waiting until the seller realizes that he is overpriced and lowers his asking.

3   FortWayne   2011 Feb 15, 11:49pm  

Lake Tahoe isn't a place with jobs or any serious industry. Basically a place where people go on vacation once in a while. I don't know what prices are there at right now, but I wouldn't offer more then what you would have paid in 1995 for a place there.

There is no financial benefit otherwise. You can check with county assessor for real sale prices, not the ballooned requests on redfin, trullia, etc... There are still many people in denial out there, most places are probably marked up 100%, so getting a 50% to 60% below asking price wouldn't be unreasonable considering how unreasonable is the asking price.

Even WSJ had an article on it saying that people are simply foreclosing on the vacation rentals. It's just not worth holding onto it.

Alternatively you can simply wait till asking prices get within reasonable range. And with prices going up on food/gas/etc... you can bet housing will drop even further since economics allow for a lot less capital to be left for housing.

4   joshuatrio   2011 Feb 15, 11:52pm  

tatupu70 says

If a house is overpriced and you put in a lowball bid that is, in fact, the market price–then you might have a chance. Although even then you probably will not.

It all depends on the seller... My good friends just lowballed on a bank owned home and got it for $55k less than the bank wanted.

It was listed @ 330k, they got it for 275k. The going rate for their style home was in the $300-350k range.

5   tatupu70   2011 Feb 16, 12:02am  

joshuatrio says

tatupu70 says


If a house is overpriced and you put in a lowball bid that is, in fact, the market price–then you might have a chance. Although even then you probably will not.

It all depends on the seller… My good friends just lowballed on a bank owned home and got it for $55k less than the bank wanted.
It was listed @ 330k, they got it for 275k. The going rate for their style home was in the $300-350k range.

Agreed--REOs are a different story. The emotion is out of the picture.

6   sfbubblebuyer   2011 Feb 16, 2:18am  

I think for lowballs, you mostly need to get lucky. We lowballed our house. The sellers (niece and nephew of the people who owned it) chased the market down and were running out of time before the house became uninsurable and they'd have to rent it out. They turned down offers MUCH higher than ours along the way, and laughed at our lowball and said they were going to work with a 'serious' buyer who had also bid. They countered him and he walked. They dropped the price AGAIN to what they had countered him at, got no more bites, and wound up accepting our re-lowball rather than having to rent it out while trying to sell it.

Total price off of original listing price : ~30%
Total price off of final listing price : ~10%

Wanna bet the criminal NAR recorded it as 10% off of asking instead of 30%?

Other lowballs along the way met with little luck.

7   bubblesburst   2011 Feb 16, 3:40am  

Realtors can be really ignorant. For that matter, sellers as well. Last year I started looking at investment properties. I was in Plano, Texas (a nice affluent suburb of Dallas) last year and looked at a few houses. There was a nice 5 bedroom 4 bathroom house on the market there in a good school district. The house was listed at $337,000. I made an all cash offer of $300,000. This was in April 2010.

My broker was a good guy. The sellers realtor was just totally ignorant. This was when there was still the first time home buyer's credit. I told them that once that expired, prices would really go down as it was artificial demand. They told me no and turned down my cash offer.

Funny as in September 2010 I get an email from my realtor telling me the property price was lowered to $285,000. I told him that I was confident it would sell at that price but by September I wasn't interested as I already bought another investment property.

Just a good example how stubborn some realtors and owners can be.

Here is the property if you are bored:

http://www.redfin.com/TX/Plano/4476-Sandy-Water-Ln-75024/home/32304113

It's also an example even in a non-bubble area like Dallas how seller's expectations can be unrealistic.

8   thomas.wong1986   2011 Feb 16, 6:16am  

It was always common before the bubble the seller wanted ex: 100 and you offered 75. True price was somewhere between. Thats why they call it asking/bid.

The people who do well regardless of REO or else are often other sales people who know how to deal. Most people didnt have a clue.

All this nonsense regarding paying at asking and over asking is nonsense, which has burnt many buyers. Just look at all the price declines we had. Someone is lowballing these prices.

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