The right offer on a home

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ARB57
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The right offer on a home

Post by ARB57 » Sun Sep 24, 2017 8:14 am

I’m looking at a house and trying to determine what a realistic OFFER might be. It is a “unique” home which makes finding comps difficult. When I say unique, it is a one bedroom, one bath home on a 1.4 acre lot sandwiched between million dollar horse farms. A beautiful little house and a gorgeous lot...with a fair amount of flexibility. I (or future buyers) could build an addition on the home, or build a new large home on the lot and keep the 1 bedroom as guest cottage. That said...based on the time on the market...it is overpriced, perhaps significantly so.

The house was on the market for nearly 500 days. The listing was removed 6 months ago and it was listed as a rental for a month and then removed. However my agent says the house is still for sale or rent.

The house was initially listed at 329,000. The price was later dropped to 299,000 for a period of 5 months. It was returned to 329,000 shortly before the listing was removed. The house last sold in 2007 for 232,000 (pretty much at the peak of he market/before the crash.) Home prices in this area are now about what they were prior to the crash.

Based on this information, what kind of an initial offer seems appropriate. (I’m not asking whether or not to buy the house...just what kind of an offer seems appropriate based on the information I’ve given.)

Thanks.

Jack FFR1846
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Re: The right offer on a home

Post by Jack FFR1846 » Sun Sep 24, 2017 8:18 am

$225k sounds like it would be immediately accepted. $200k is a good point to negotiate from.
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mcfroggin
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Re: The right offer on a home

Post by mcfroggin » Sun Sep 24, 2017 8:20 am

Impossible to say. Get a realtor
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TheHouse7
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Re: The right offer on a home

Post by TheHouse7 » Sun Sep 24, 2017 8:32 am

I had a very similar situation a year ago.

House sold for 243k in 2006. (When it was first built.)

Wanted to buy it in 2016, but the market is so hot for homes $200-350k. It listed for 280k and sat on the market for 21 days. It is the cheapest house in the neighborhod, all other houses are 350+ with no comps.

We offered 265k they agreed on 273k, new hard wood, apliances, granite. I feel like we could have gotten it for less, but it's our dream home after seeing what else was on the market. We worried about other cash offers, average days on market 9, had been in other bidding wars before.

Maybe start with 225k and know the MOST you're really willing to pay before the negotiations start.
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livesoft
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Re: The right offer on a home

Post by livesoft » Sun Sep 24, 2017 8:39 am

I think the home is worthless. You can get comps for the land. You are buying it for the land anyways. I suppose the owner wants one of the adjacent horse farms to buy it.
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cherijoh
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Re: The right offer on a home

Post by cherijoh » Sun Sep 24, 2017 8:40 am

If you have an agent, what does he/she have to say?

Can you get in the ballpark by looking at what the land would be worth separately then calculate a home value based on the square footage? Then add the two together. Typically smaller, 1-story houses have a higher cost/square foot than larger houses.

Edited To Add: I suspect Livesoft is correct and the owner is expecting one of the adjacent owners to make an offer.

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jfn111
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Re: The right offer on a home

Post by jfn111 » Sun Sep 24, 2017 8:46 am

One bedroom homes are very difficult to sell. (2 bedroom homes aren't a picnic either). Have your Realtor run comps on the land and start from there. If he's into the property for $232,000 then you have a lot of room to play vs a $329,000 asking price.
Don't be afraid to start low and let him counter.

adamthesmythe
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Re: The right offer on a home

Post by adamthesmythe » Sun Sep 24, 2017 11:33 am

livesoft wrote:
Sun Sep 24, 2017 8:39 am
I think the home is worthless. You can get comps for the land. You are buying it for the land anyways. I suppose the owner wants one of the adjacent horse farms to buy it.
If you buy for land value be sure that the land can be developed in the way you intend. Zoning, water, sewage, etc.

I don't agree the house is worthless, I do think it needs a special buyer. So the seller needs to wait a long time for that special buyer to come along- even if willing to price aggressively.

Such a house might appeal to a single person or couple that wants to live in the country. The downside is that it would be hard to sell if they ever want to move.

Do YOU want the house to live in? If so make an offer somewhat near to what you are willing to pay. Offers considerably below asking sometimes do NOT lead to negotiation.

Uniballer
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Re: The right offer on a home

Post by Uniballer » Sun Sep 24, 2017 1:07 pm

mcfroggin wrote:
Sun Sep 24, 2017 8:20 am
Impossible to say. Get a realtor
A realtor has a conflict of interest in that they will get a bigger commission if you pay more for the property.

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cockersx3
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Re: The right offer on a home

Post by cockersx3 » Sun Sep 24, 2017 5:43 pm

Jack FFR1846 wrote:
Sun Sep 24, 2017 8:18 am
$225k sounds like it would be immediately accepted. $200k is a good point to negotiate from.
I'm not so sure that $225k would be immediately accepted. I see two questions here: what is the actual market value of the property, and then (more problematic IMO) what price would the seller accept.

I agree with this poster that the actual market value of the home is probably in the $225k range, based on the info provided. However, remember that the seller kept their house on the market for **over a year** without any significant change in pricing, which suggests that they either cannot or will not sell it for near the property's actual value.

I would put in an offer of $200k, and potentially have your realtor explain to the seller's realtor your reasoning why you think this is in line with the property's actual value. That said, based on the sellers past pricing strategy, I would not get my hopes up on an actual sale going through.

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Watty
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Re: The right offer on a home

Post by Watty » Sun Sep 24, 2017 5:59 pm

ARB57 wrote:
Sun Sep 24, 2017 8:14 am
When I say unique, it is a one bedroom, one bath home on a 1.4 acre lot sandwiched between million dollar horse farms.
Something seems odd.

If the price was anywhere near fair then I would have thought that one of the adjoining landowners would have bought it either for their own use or to prevent the land from being developed in an undesirable way.
adamthesmythe wrote:
Sun Sep 24, 2017 11:33 am
If you buy for land value be sure that the land can be developed in the way you intend. Zoning, water, sewage, etc.
+1000

I have heard of situations where things happen like someone has 4.8 acres where they planned to build their retirement home. Years later when they want to build there is a five acre minimum lot size and they could not get building permits or a variance.

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