Saturday, August 23, 2008

How much is it worth?

Well, I'm still way behind in updates.. so here's the next segement of the story, but not the latest! You'll have to stay tuned for the next update.

So, after missing out on the Short Sale, we had to take a closer look at the financials because of rising interest rates and some optimistic reviews. So we regrouped to review where we felt comfortable paying a month and what would be the upper limit. The problem was.. under current conditions that meant affording a much lower 'top line' price then previously thought.

With this new realization in place (and I think finally some agreement at home) we settled back to watching for new activity.

Turns out one home we looked at previously had just lowered their price again. Originally listed at I think 609k, it was now 579k. We had seen it previously but had passed. Now it was cheaper, and the owners were out of the house given a cleaner look at the place, so we decided to check it out again.

This model had the main level floor plan I liked but had a weird bump out that was obstructed by a odd wall with a fireplace. They also had a pretty run down house as the neighbor. At the previous price, the house just didn't have anything to make it feel worth it, but the house did have many of the core elements we were looking for. You just had to get past some of the shortcomings. At the right price, it would be a good fit. Just previously at those price points, it wouldn't hold up to the competition.

And apparently the market agrees because from our intel, they hadn't gotten any serious bites at all. Looking at it again objectively, I came to the conclusion its a good house, and met most of the desires, it just was priced all wrong. We did some homework, and we came up with a price we thought reflected the house's market value and value to us. We believed we could buy it at a price that would leave us some cash to do the upgrades the house needed. The house was in solid condition, but really lacked most of the upgrades (kitchen appliances, countertops, flooring, etc) that usually catches peoples' eye as value adders.

That said, with the new budget in mind, we wrote up a offer we felt reflected our comfort level and the market comps supported.

We offered 530k - while 6% lower then their list price, it is also 30k higher then any like model of their home has sold in the community. Well, after getting the offer they apparently were not too thrilled - and waited 3 days to respond. The counter? 569k! Doo what? These people are obviously a bit hung on their price.

Well, we honestly wanted to make a deal happen - but on our terms. We are not desperate, we have a place to be, we have a budget, and they have a house they need to sell (which BTW, has been on the market for 80 days at this point)

There was a mentioned possibility of using seller concessions to get a higher list they wanted, but without higher costs. So we countered with 560k with 3% back.

Well that didn't wake them up either, and they delayed getting back to us.

Bad news for them - you snooze you lose. While they wait, new action happens on the market.

They finally countered at 560k with no consessions. No way - that house is still overpriced, so we walked. We are pretty confident this has been the only offer they have gotten. Maybe they'll take the blinders off and look around.

In the mean time, a new opportunity has come up...

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