From Inman News:
A picture may be worth a thousand words, but nobody’s house is worth what they think it is in this market.
The tough part is telling people that.
I went to see a house in Southwest Newark, N.J., practically in Hillside, in an area where the streets go block-by-block. I went at night, which on reflection was slightly stupid, but I didn’t know that part of town well and was trying to get a handle on what the city was like. (I have always held to the “eat your own cooking” philosophy.) So I jumped off a bus and walked along for a while, watching respectable blocks alternate with loud blocks and deserted blocks by turn.
…
Then I waited a couple of days, mulling, and called the agent.
“Look,” I said. “I know she’s been in that house for a long while, and she’s sad to be moving, but it’s barely worth $199K new. To rehab it, I’ve got to put in a new kitchen, revamp the bath, polish up from top to bottom where it hasn’t been taken care of. It looks like it’s got no major structural defects, but I’ve still got to put forty thousand dollars into it.”
I went over this story with one of my partners. I’m still pretty new at making offers, and I wanted him to hear every detail of the story, see the house as I saw it, be an audience to my conversation with the agent.
And he had only suggestion: “don’t be apologetic. Not, ‘I’m sorry, but I can only offer you one-forty,’ but, ‘my offer’s one-forty.’ You don’t know what she’s thinking and how she’ll handle it. That’s it, ‘One-forty.'”
Caveat Emptor!
Grim
Nice condominium complex – medium sized. Mix of 1, 2 bedrooms single level and multi-level apartments and townhouses ranging from 700 sq feet to 1200 sq feet. One ex-governor owned and lived here once.
The 1 bedroom basement apartment: 1 bed, 1 bath, 700 sq feet, with partial basement 300 sq feet: partially finished 150 sq ft for family room/additional bedroom, unfinished 150 sq feet contains laundry outlet and a second bath possibility.
One went for 187K in July 2004.
One went for 190K in July 2005.
One just came on market this month Jan 2006 (exactly the same as the above two, no newer anything) asking for, hold your breath, 240K.
I dont understand.
Here is my low ball experience although the sale fell through)
After losing 2-bidding wars on properties in Bergen County, we (me and wife) put an offer on a property in River Edge MLS # 2532375 for $ 545,000.00. The house is a narrow front urban looking colonial. It used to be a small house which was expended by the owner in the last 5 years, the upper floor was really nice but the ground floor was hardly touched. Overall looked ok. According to the listing agent it was originally listed for 600k in early summer and went under contract for 585K, but the buyer could not get financing so it was put back on the market for 580k under new listing (hmmm). Anway the seller jumped on my offer of 545k (10% off the OLP). After thinking it over we withdrew our offer, now I feel lucky. The property is sill on the market with a reduced price of 569k.
The current owner bought it for $ 136,500 in 1997, probably spent good 50-75k on improvements (the upper floor was completely done). In normal market this should go for 400k range. I am still under the pressure from my wife to buy a house, but I rather wait. I own 2 br condo bought in 1999 for 175k; a less desirable unit IN MY BUILDING went for 400k in October (insane). I rather wait for housing prices to drop (even for my condo) before I buy than shell out 550k with 325K mortgage for 30 years.
Any thoughts/
cliffy:
Since you live in a condo, would it make sense to sell now while the value is high and then live in an apartment for the next year or two?
–ChrisXS
ChrsXS
I am considering to sell and rent for a year
Cliffy
Cliffy,
If a less desireable unit in your building went for 400K, what could you get for your unit? 450K? 500K? You could sell it and rent a place for a year or two, pocket the profit (perhaps in an online savings account which pays a high interest rate–3.5 to 3.75) and then buy a place in a year or two when the prices come down. Perhaps you could sign a 1-year or 2-year lease on your current place with the new owner”—perhaps we should call it “property debtor”?