Sun 3 Feb 2008
Welcome to another edition of Lowball!
Lowball! takes a look at home sales from a different perspective. For those new to Lowball!, a lowball offer is when a buyer offers a significantly lower bid than asking in hopes that the seller accepts the offer. We take a list of home sales from the past month and pick out the sales that have the highest percentage difference between original list price and selling price.
To keep the list length reasonable, we’re going to use 20% 25%! as the minimum percentage off OLP to be considered a Lowball!
Caveat Emptor!
| MLS | Town | OLP | LP | SP | % off OLP | $ off OLP |
| 2368994 | Sussex Boro | $205,000 | $124,900 | $70,000 | 65.9% | $135,000 |
| 2411956 | Lambertville City | $325,000 | $325,000 | $140,000 | 56.9% | $185,000 |
| 2453525 | Long Hill Twp. | $269,000 | $195,000 | $140,000 | 48.0% | $129,000 |
| 2401728 | Newark City | $141,900 | $84,900 | $75,000 | 47.1% | $66,900 |
| 2285518 | Washington Twp. | $295,000 | $219,000 | $170,000 | 42.4% | $125,000 |
| 2414077 | Nutley Twp. | $359,900 | $359,900 | $212,500 | 41.0% | $147,400 |
| 2417925 | Washington Twp. | $321,500 | $229,900 | $190,000 | 40.9% | $131,500 |
| 2427746 | Newark City | $270,000 | $240,000 | $160,000 | 40.7% | $110,000 |
| 2417836 | Irvington Twp. | $323,000 | $223,000 | $195,000 | 39.6% | $128,000 |
| 2413605 | East Orange City | $190,000 | $131,500 | $115,000 | 39.5% | $75,000 |
| 2428960 | Hillsborough Twp. | $369,500 | $279,000 | $225,000 | 39.1% | $144,500 |
| 2403028 | Franklin Boro | $229,900 | $179,900 | $142,000 | 38.2% | $87,900 |
| 2467296 | Haledon Boro | $369,900 | $269,900 | $230,000 | 37.8% | $139,900 |
| 2463295 | Pompton Lakes Boro | $235,000 | $169,900 | $150,000 | 36.2% | $85,000 |
| 2432852 | Morris Twp. | $299,900 | $199,900 | $193,000 | 35.6% | $106,900 |
| 2449147 | Flemington Boro | $350,000 | $250,000 | $226,000 | 35.4% | $124,000 |
| 2418742 | Hillside Twp. | $240,000 | $215,000 | $155,000 | 35.4% | $85,000 |
| 2340584 | Totowa Boro | $1,998,000 | $1,730,888 | $1,300,000 | 34.9% | $698,000 |
| 2434765 | Rockaway Twp. | $1,270,000 | $1,270,000 | $830,000 | 34.6% | $440,000 |
| 2427557 | Chester Twp. | $1,395,000 | $1,190,000 | $920,000 | 34.1% | $475,000 |
| 2336331 | Glen Ridge Boro Twp. | $1,099,000 | $975,000 | $725,010 | 34.0% | $373,990 |
| 2418827 | Phillipsburg Town | $110,900 | $79,900 | $73,500 | 33.7% | $37,400 |
| 2386089 | Mansfield Twp. | $360,000 | $265,000 | $239,000 | 33.6% | $121,000 |
| 2386428 | Wayne Twp. | $424,900 | $319,900 | $285,000 | 32.9% | $139,900 |
| 2321221 | Edison Twp. | $619,900 | $450,000 | $420,000 | 32.2% | $199,900 |
| 2392687 | Peapack Gladstone Boro | $499,000 | $399,000 | $340,000 | 31.9% | $159,000 |
| 2367804 | Sparta Twp. | $824,900 | $599,900 | $565,000 | 31.5% | $259,900 |
| 2419649 | Phillipsburg Town | $108,900 | $99,900 | $75,000 | 31.1% | $33,900 |
| 2417672 | Watchung Boro | $649,900 | $535,000 | $450,000 | 30.8% | $199,900 |
| 2471011 | Paterson City | $98,000 | $98,000 | $68,000 | 30.6% | $30,000 |
| 2453588 | Saddle Brook Twp. | $259,000 | $239,000 | $180,000 | 30.5% | $79,000 |
| 2420485 | Lebanon Twp. | $329,900 | $279,900 | $230,000 | 30.3% | $99,900 |
| 2438980 | Westfield Twp. | $258,000 | $205,500 | $180,000 | 30.2% | $78,000 |
| 2433182 | Irvington Twp. | $190,000 | $140,000 | $132,600 | 30.2% | $57,400 |
| 2341591 | East Hanover Twp. | $829,000 | $619,000 | $580,000 | 30.0% | $249,000 |
| 2423572 | City Of Orange Twp. | $199,900 | $179,900 | $140,000 | 30.0% | $59,900 |
| 2440094 | Washington Twp. | $249,000 | $185,000 | $175,000 | 29.7% | $74,000 |
| 2440387 | Morris Twp. | $939,000 | $750,000 | $660,000 | 29.7% | $279,000 |
| 2419769 | Springfield Twp. | $679,000 | $519,900 | $480,000 | 29.3% | $199,000 |
| 2448562 | Sparta Twp. | $179,000 | $159,000 | $128,000 | 28.5% | $51,000 |
| 2373884 | North Caldwell Boro | $1,250,000 | $999,000 | $900,000 | 28.0% | $350,000 |
| 2379538 | Hillsborough Twp. | $449,900 | $350,000 | $325,000 | 27.8% | $124,900 |
| 2415055 | Haledon Boro | $529,900 | $449,900 | $383,000 | 27.7% | $146,900 |
| 2446625 | Manville Boro | $199,750 | $199,750 | $145,000 | 27.4% | $54,750 |
| 2453066 | Clifton City | $249,000 | $224,900 | $181,000 | 27.3% | $68,000 |
| 2424561 | Bloomfield Twp. | $405,000 | $319,000 | $295,000 | 27.2% | $110,000 |
| 2410493 | Mendham Twp. | $3,400,000 | $2,750,000 | $2,500,000 | 26.5% | $900,000 |
| 2393550 | Franklin Lakes Boro | $649,900 | $539,900 | $479,521 | 26.2% | $170,379 |
| 2442598 | Maplewood Twp. | $1,350,000 | $1,150,000 | $999,000 | 26.0% | $351,000 |
| 2436442 | Hopatcong Boro | $254,900 | $195,000 | $189,900 | 25.5% | $65,000 |
| 2452266 | Hampton Twp. | $294,900 | $294,900 | $220,000 | 25.4% | $74,900 |
| 2433101 | North Plainfield Boro | $315,000 | $279,000 | $235,000 | 25.4% | $80,000 |
| 2410043 | Clinton Twp. | $389,900 | $304,900 | $292,000 | 25.1% | $97,900 |
| 2462662 | Elizabeth City | $120,000 | $120,000 | $90,000 | 25.0% | $30,000 |
| 2410944 | South Orange Village Twp. | $599,900 | $579,900 | $450,000 | 25.0% | $149,900 |
And some high dollar amount lowballs that didn’t make the cutoff.
| MLS | Town | OLP | LP | SP | % off OLP | $ off OLP |
| 2283606 | Bernardsville Boro | $7,995,000 | $6,850,000 | $6,350,000 | 20.6% | $1,645,000 |
| 2302094 | North Caldwell Boro | $3,099,000 | $2,875,000 | $2,500,000 | 19.3% | $599,000 |
| 2435080 | Madison Boro | $2,200,000 | $1,880,000 | $1,675,000 | 23.9% | $525,000 |
| 2388301 | Tewksbury Twp. | $2,095,000 | $1,699,950 | $1,611,600 | 23.1% | $483,400 |
| 2424095 | Millburn Twp. | $3,195,000 | $3,195,000 | $2,725,000 | 14.7% | $470,000 |
| 2382638 | Glen Ridge Boro Twp. | $1,895,000 | $1,895,000 | $1,450,000 | 23.5% | $445,000 |
| 2447856 | Millburn Twp. | $3,250,000 | $2,995,000 | $2,825,000 | 13.1% | $425,000 |
| 2410434 | Saddle River Boro | $5,195,000 | $5,195,000 | $4,800,000 | 7.6% | $395,000 |
| 2414390 | Madison Boro | $2,150,000 | $1,950,000 | $1,775,000 | 17.4% | $375,000 |
| 2441986 | Warren Twp. | $1,550,000 | $1,275,000 | $1,185,000 | 23.5% | $365,000 |
| 2425332 | Franklin Lakes Boro | $1,699,000 | $1,499,000 | $1,360,000 | 20.0% | $339,000 |
| 2431373 | Mendham Twp. | $2,399,000 | $2,299,000 | $2,075,000 | 13.5% | $324,000 |
| 2413040 | Kinnelon Boro | $1,279,000 | $1,050,000 | $960,000 | 24.9% | $319,000 |
| 2395890 | Summit City | $1,650,000 | $1,550,000 | $1,350,000 | 18.2% | $300,000 |
| 2449497 | Westfield Twp. | $1,250,000 | $1,099,000 | $999,999 | 20.0% | $250,001 |
| 2448139 | Millburn Twp. | $1,399,000 | $1,295,000 | $1,160,000 | 17.1% | $239,000 |
| 2379221 | Washington Twp. | $929,900 | $759,000 | $710,000 | 23.6% | $219,900 |
| 2418138 | Montville Twp. | $1,100,000 | $995,000 | $885,000 | 19.5% | $215,000 |
| 2392418 | Readington Twp. | $924,000 | $750,000 | $715,000 | 22.6% | $209,000 |
| 2390267 | Washington Twp. | $1,050,000 | $860,000 | $845,000 | 19.5% | $205,000 |
| 2431140 | Allendale Boro | $1,350,000 | $1,260,000 | $1,150,000 | 14.8% | $200,000 |
| 2378138 | Peapack Gladstone Boro | $799,000 | $649,000 | $600,000 | 24.9% | $199,000 |
| 2403684 | Franklin Lakes Boro | $1,999,000 | $1,865,000 | $1,800,000 | 10.0% | $199,000 |
| 2445489 | Bridgewater Twp. | $1,295,000 | $1,175,000 | $1,100,000 | 15.1% | $195,000 |
| 2398670 | Mendham Twp. | $1,185,000 | $1,145,000 | $991,000 | 16.4% | $194,000 |
| 2459051 | Mahwah Twp. | $1,367,000 | $1,367,000 | $1,175,000 | 14.0% | $192,000 |
| 2427125 | Readington Twp. | $860,000 | $725,000 | $675,000 | 21.5% | $185,000 |
| 2400671 | West Orange Twp. | $739,900 | $579,000 | $560,000 | 24.3% | $179,900 |
| 2406270 | Lake Mohawk Byram | $850,000 | $750,000 | $675,000 | 20.6% | $175,000 |
| 2438424 | Essex Fells Twp. | $1,090,000 | $999,999 | $925,000 | 15.1% | $165,000 |
| 2396547 | South Orange Village Twp. | $799,500 | $649,500 | $639,000 | 20.1% | $160,500 |
| 2448032 | Scotch Plains Twp. | $1,150,000 | $1,100,000 | $999,995 | 13.0% | $150,005 |
| 2390993 | Berkeley Heights Twp. | $699,900 | $569,900 | $549,900 | 21.4% | $150,000 |
woow Grim ..been busy this AM ?? thanks :)))
Here is the full spreadsheet for the data junkies:
http://njrereport.com/files/JanuaryLB.xls
For those who don’t have MS Excel or a compatible viewer, the data is also available as a Google Spreadsheet:
http://spreadsheets.google.com/pub?key=pXkgMVkB_QpStmP80MJUwGg
I thought things like that don’t happen in Westfield.
So out of 1537 sold properties on the Excel sheet, only 44 sold for more than 15% off of list.
That goes perfectly with my theory that making offers of more than 15% off of list are pretty much a waste of a buyer’s time. Not that people shouldn’t try if they have time to waste, but don’t be surprised if your offer doesn’t get accepted.
If we raise that threshold to 10% of off list, only 132 properties fit that criteria, which is less then 10% of those properties sold.
The numbers off of original list are more impressive. I would say that the fact remains, sellers must get to reality themselves, you the buyer have a slim chance of getting them there via a “lowball” offer.
Same analysis for original list price:
Out of 1537 properties, only 222 sold for 15% or more off of list.
493 out of 1537 sold for 10% or more off of OLP.
Ann,
I know you noticed the fact that most of the largest lowballs in the list have the highest days on market, you hit the nail on the head when you said “sellers must get to reality themselves”.
The relationship between % off OLP and DOM isn’t a coincidence.
The only sales price is the “market price”, the asking price isn’t. Asking price doesn’t necessarily need to be located anywhere near the actual market value of the home.
Overpriced homes will sit until such time as the seller capitulates and either cuts their asking price to a price nearer to market, or they finally accept a price nearer to market.
A lowball doesn’t always mean the buyer got a great deal, it could also mean the seller was asking too a high price.
If we cut up the sales into categories, based on DOM, we see a very interesting trend develop.
Homes that sold in 60 days and under sold for 3.9% off of original list and 2.9% off of current asking.
Homes that took 61-120 days to sell, sold for 9% off of original list and 5.1% off of current asking.
Homes that took 121-180 days to sell, sold for 13% off of original list and 6.5% off of current asking.
Homes that took greater than 180 days to sell, sold for 15.9% off of original list and 6.5% off of current asking.
If we want to slice it even thinner, homes that sold in 30 days or under, sold for 2.2% off of original list and 1.8% off asking.
So what does this mean for a seller?
Price a home right and it’ll sell quickly. Price a home wrong, and it is going to sit until you correct the price.
If your home hasn’t sold in 60 days, it’s not because the right buyer hasn’t come along, it’s because it’s overpriced.
What does this mean for a buyer?
The longer a property has been on the market, the higher the likelyhood that the property is overpriced. Adjust your offer accordingly.
What else does this mean for buyers?
Ignore asking prices, they are more often wrong than right. Base your offer on comparable sales, not necessarily some fixed percentage off asking.
Grim, very interesting analysis relating to DOM. So, if you’re a buyer looking at house that’s been on for 60 days, look very closely at what is going on. If you’re a seller, wake up and smell the coffee after sixty days of sitting there.
After we had been house hunting for a few months, it became apparent that DOM meant little, or at least the opposite of what we thought it meant. Just because something had a high DOM didn’t mean that the sellers were any more likely to accept a reasonable offer. Au contraire in some cases! It meant they were most unreasonable and had the least urgency to sell!
Our house sold for 3% off OLP in about 2-3 weeks weeks. It sold for LP in four days after we lowered the price the 3% (we did one adjustment, very quickly, as we against our realtor’s advice). We had three offers, two serious, and one of the offers was 15K below asking. Why did they put in 15K less? Just my opinion, those buyers just thought they should get SOMETHING off.
I totally agree with your advice that buyers should not go around with some fixed percentage off in their minds, i.e., “The market stinks, I am bidding X percent lower on everything!”
lostinny-
Not Brigadoon!!! Noooooo!!!
JM
Ann,
I disagree, that it is a waste of time. You have to base your offer on what you determine the house is worth. I don’t know how many of these properties are re-listed, but I was interested in one of these properties (2 Mary Allen in Mountainside, a big house on almost a half acre with a pool). It sold for $510, it was listed at $599, almost 15% off LP. Except when I first saw it 3 months ago, it was listed at $699. I think its about timing, maybe the first lowball got turned down, but eventually someone got the right price.
RayC, I totally agree, you have to offer what you think its worth. But I think we can see from the data, that the chance of it getting accepted, at least during the time period of this data, is very low, especially if it is over 15% off LP.
this is making me sick…. when will this end.
Do not unstand what you are talking about.
Option ARMs, next chapter in U.S. housing crisis
This will make the subprime mess a walk in the park
http://www.reuters.com/article/marketsNews/idUKN2436651820080201?rpc=44&ref=patrick.net
Its going to be a very cold winter and summer. Why arent the wall street bankers, I mean thiefs buiyng up the properties, the bums. We are now becoming a 3rd world country.
How do you say brother can you spare a dime in arabic or chinese?
#2 Grim ….I admit YES I am a JUNKIE …..and Thank you for info :)))
i think it is very kind of a person to lowball the seller. it means the next lowballer has a better chance, even if the first lowball is refused with a sniff and a haughty stare. i’m all for helping my fellow future buyer. :*)
Grim,
I find your table a little misleading. You must somehow include the actual market value (or tax assessed value) of the property. A lot of sellers list their houses for way above their assessed values, so you can expect low ball offers. Also, there must be a way to track a property that’s been re-listed since the original price will not match the new listing price (probably a lot lower).
Alia,
I was about to say the exact same thing. It’s up to us as prospective buyers in what is clearly a buyer’s market to set the rules of the game.
Rule #1: WE set the prices, not the realtors.
A house isn’t worth any more than what someone will pay for it. As such, the term “lowball” is somewhat of a misnomer. It should be called “the cheek of unrealistic expectations met squarely with the right hook of verity.”
I love it, I love it, I love it…..
maybe in the not too distant future i’ll be able to afford a reasonable house for me and my family to live in.
I wonder if this same type of site is available in every state? I also think that if enough people would do a site like this there could be a monthly LowBall Hall Of Fame Award for the top 100 in the nation and who wants that dubious distinction? Maybe it could get published in the WSJ or similar?
Do you have this information for Ocean coaunty? If not can you tell me how to get it?
I love this website. Going through a first-time home purchase now, and will be using all of the info in my pricing/negotiations.
I’ll be damned if I’m paying over LP on any home with DOM 100+
Any other tips or suggestions? Anyone can email me at mrorange72@yahoo.com
I’m amazed by the comments on this page. Sorry everyone and Mr. Low Ball blogger the only thing you are reporting is that homes are not selling at seller’s ASK price. Let me also remind everyone that between 2001-2005 was ABNORMAL, multiple bid/over ask price offers was UNCOMMON prior to yr 2000. A seller can ask whatever outrageous price they want. Is that MARKET value?…NO not necessarily, you do not provide data on MARKET value, just ASK price. Unfortunately, many folks OVERPAID for their homes by offering tens to hundreds of thousands over ask in multiple bid offers. Sorry, you OVERPAID and consequently, in todays market you cannot get some other fool to OVERPAY again, ie. pay your ASK price. This website is of no service to the real estate market, as you do not provide ANY useful info. I can give you thousands of emamples of OVERPRICED homes…ASK price is NOT MARKET value
B. Elliott has demonstrated an ability to read but a deficiency in comprehension.
That list shows exactly what it purports to: the difference between asking price and selling price. You don’t think that’s even remotely useful information?
The fact that sellers are still asking for 2007 prices is very telling (to me, anyway); it shows that we are still FAR from capitulation and that anyone considering buying is best waiting as long as possible for that to occur.
Rereading your post, I have no idea what point you’re even trying to make other than the obvious: ASK PRICE != SELLING PRICE.
To Meter:
Selling price = market value
Ask price is NOT = market value
If you ask 2007 prices you will not sell it, because 2007 prices(mkt value) is not today’s market value.
Recent sales (Oct/Nov ‘07 to current), called sale comps, is best indicator of today’s mkt value. Any sale comp prior to Oct/Nov ‘07 is not indicative of current mkt value. Therefore, if any prop is listed at a price derived from a sale comp prior to Oct/Nov ‘07 is, most likely, overpriced, since today’s values are BELOW early ‘07 values. Hence, if the low ball list contains ask prices derived from sale comps prior to Oct/Nov ‘07 it’s old info/not accurate/not indicative of today’s market value AND could be the reason why it made it on the low ball hall of fame.
If a prop is asking $50K over the highest market value recorded, who cares…it’s not TODAY’s MARKET VALUE, it’s irrelavant, it’s a wishful thinking, it’s would’ve, could’ve, should’ve…
If you’re interested in learning about what is really going on in the mkt, you should go to at http://www.otteau.com . I am in no way associated with them, but they KNOW real estate markets/trends/values. Good luck!
OK Meter, 1 last comment…real estate is fun!
If a house asking 200 sells for 100 is this a low ball? According to this website, yes. But…if recent sales of comparable properties (comps) are selling for 100 then it’s NOT really a low ball, it’s a mkt value sale. Yes the sellers WANTED 200, but it’s only WORTH 100. Now, same example…if the comps are selling for 150 and you paid 100…NOW, meter, you got yourself a true low ball!
This is my problem w/ mr. low ball blogger, we really don’t know if it’s a true low ball…I suspect a large majority are not.
To those of you on the fence…NOW is the best time to BUY…fixed rates in the 5% range, prices soft…it doesn’t get much better than this:)
Please see my first comment. I already pointed out that it’s not really lowballing.
Still, the fact that people are still listing their properties at unrealistic values is useful information. When asking prices start aligning more with selling prices then I’ll know we’re near equilibrium. That’s when it’s time to buy, not before.
Meter, it’s been very interesting chatting with you. I must say, I have certainly learned alot from a new perspective on this matter which will benefit me greatly in the future, thank you!
Unfortunately, I disagree with you re: time to buy…we have different perspectives…I purchase real estate near market values not ask prices; 5.5% fixed rate loans are dirt cheap, just calculate the difference in mtg pmts vs. 8%+, which was the going rate not very long ago..it’s huge…sorry but in a worst case scenario I’d rather pay slightly more for the real estate than pay slightly more to the bank in mtg pmts:)
Best of luck on your real estate investment purchases.
Hi,
I am planning to Buy home in Bernard Twp, in Somerset county, NJ. Do you know how are the prices there? Is there any bench mark for bidding on homes? Any input will be appreciated.
Thanks
awesome data and analysis, grim!
any suggestions as to how i could collect similar data for montgomery county, md? am a buyer there, and would love to be armed with these trends for my market.