Welcome to the first edition of Lowball! for the New Year!
Lowball! takes a look at home sales over the past week from a very 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 over the past week and pick out the sales that have the highest percentage difference between asking price and selling price.
The reason for Lowball! is to show buyers that the market has changed and buyers now have considerably more leverage than sellers. Just a short time ago, lowball offers would have been laughed at and discarded, however, not any more. The fact that so many under-asking offers are being accepted is clear proof that the market is changing.The list does not contain all sales, I hand-pick the most interesting sales from the list. These listings might be the highest dollar drops, biggest percentage reductions, or sales in towns that are thought to still be ‘hot’. Please note, even with double digit percentage reductions, these homes are still incredibly overpriced. This week I tried to grab listings that were more affordable than many I’ve posted in the past.
The first in our list this week is rather special. I’d like for readers to pause and really take note of what I’m about to say here.
MLS# 2107491 – Union, NJ
Listing Price $395,000 (Reduced from $429,900)
Sales Price $285,000 (27.9% Lowball!, 33.7% from OLP)
Not only has the price reduction of this listing been an incredibly significant 33.7%, but something even more important, this listing sold below the original purchase price. This townhome was purchased by the recent seller in April of 2003 for $305,000. This home has just sold, two and a half years later for $285,000, a loss to the seller. Special congratulations go out to the lowballer that bid almost 30% under asking. Not only did you get a great deal for yourself, but you provided me with proof for me readers that real estate isn’t always ‘the best investment you’ll ever make’.
On to the list:
MLS# 2086128 – Washington Township (Warren), NJ
Listing Price $599,990
Sales Price $432,990 (27.8% Lowball!)
MLS# 2109897 – Phillipsburg, NJ
Listing Price $189,000
Sales Price $145,000 (23.3% Lowball!)
MLS# 2073216 – Washington Township (Morris), NJ
Listing Price $850,000
Sales Price $665,000 (21.8% Lowball)
MLS# 2218354 – Livingston, NJ
Listing Price $2,395,000
Sales Price $1,925,000 (19.6% Lowball!)
MLS# 2112371 – Ringwood, NJ
Listing Price $1,200,000
Sales Price $990,000 (17.5% Lowball!)
MLS# 2203103 – Green Brook, NJ
Listing Price $1,176,130
Selling Price $975,000 (17.1% Lowball!)
MLS# 1637848 – Mount Olive, NJ
Listing Price $469,900 (Reduced from $525,000)
Sales Price $390,000 (17% Lowball!, 25.7% off of OLP)
MLS# 2085209 – East Side Historic, Paterson, NJ
Listing Price $599,000 (Reduced from $659,000)
Sales Price $500,000 (16.5% Lowball, 24.% off OLP)
Note: For those looking to purchase in the very expensive ‘prestige towns’. Take a ride through the East Side historic district in Paterson. Incredibly beautiful homes that would be in the millions if they were in another town. What happened here? The deterioration of a once beautiful area. There are other such beautiful areas in Newark and Irvington as well. These communities were once prestige towns as well. Don’t be fooled into thinking upscale communities are immune from the process of disinvestment and decay.
MLS# 2067772 – Watchung, NJ
Listing Price $2,390,000 (Reduced from $2,690,000)
Sales Price $2,000,000 (16.3% Lowball!, 25.7% off OLP)
MLS# 2099509 – Oakland, NJ
Listing Price $799,900
Sales Price $680,000 (15% Lowball!)
MLS# 2066486 – Chester, NJ
Listing Price $3,500,000 (Reduced from $4,950,000)
Sales Price $3,000,000 (14.3% Lowball!, 39% off OLP)
MLS# 2093612 – Little Falls, NJ
Listing Price $279,900 (Reduced from $299,900)
Sales Price $240,000 (14.3% Lowball!, 20% off OLP)
Caveat Emptor!
Grim
Grim, great job this week (love the tsunami effect piece). I would like to make a lowball request for Cedar and West Cedar Grove, as I am trying to do some advertising business with a real estate office. They are so kool-aided up that they think I’m full of sh*t and they are doing just fine, thank you. You wouldn’t know it from their office though, it’s a dump. They say they have been in business 18 years, well they haven’t painted the office in 18 years…makes a real nice impression with yellowed walls and the yellowed plastic in the flourecent light covers. Eeewwww. I want to show them a thing or two, even if they don’t (and they probably won’t) do business with me.
Thanks in advance if you can help. Thanks regardless because your blog simply reinforces all of the good news I have been pushing for quite some time now, only to be labeled a kook, a nutjob, and a tinfoil-hat-wearing conspiracy believing headcase.
David
Nicely done.
It may not be the first, but documenting a sale at loss already should scare the crap out of the speculators. This could get uglier even earlier than I expected, and I expected pretty ugly pretty early.
FYI I also comment as lindsey.
Want to really scare people who believe that high end towns can’t fall apart? Take a look at North Plainfield, slum and crime capital of Somerset County – lots of decaying old Victorian mansions.
Grim thank you for the updates. Recently married my wife and I have been searching for a house for two years. There was a brief stop for several months due to planning the wedding. I know this web site deals with mostly northern New Jersey, but I recently saw that A.C.(We live in Brigantine were prices have gone way out of control) was rated 49% over valued. What do you think. I have since told my wife we are going to sit this one out and wait.
Keep up the work Mr. Truthseeker.
However to put things in relative terms to past prices can you please post what the house sold for 3-5-7 years ago to compare the insane price appreciation.
Thanks for doing for the Condo in Union. WOW real Estate prices can go down and you can lose money?
How would the pumping realtors spin this?
Can someone help me?? I have looked at a 2br 2.5 bath duplex in Rahway in which is bank owned. The orginal LP was $255k, then it went to $230k and now is $215.6k. I am about to put in a bid for $180k. The comps show the FMV at $200k (approx). I would like to know is $180 too much?? I really want to bid lower but I was advise not to. Help! All comments and suggestions are welcomed.
Grim:
You are really hitting the cover off the ball.
When dealing with Internet sites, providing something unique and providing it first is what matters.
As you can see with the Ben Jones site, much of the content is derived not just from his effort, but from his visitors.
Clearly the velocity of the increase in traffic and postings here has been due to your work. I would say that in 4-8 weeks, this site is going to be a must visit for even the casually interested.
Good luck in taking advantge of the “eyeballs” that you deserve to have.
N.B. You may wish to adopt the Ben Jones “call for topics” posts, so you have a forum for brainstorming and gossip.
Grim,
Thanks for the county tags. Love that lowball. Interesting article on foreclosures and how FannieMae is handling foreclosure sales. 50 % off!
Lenders lost on Laurel Woods, Mortgage woes seen nationally.
Price reductions in NJ (Philly suburb)
I have been watching mls listings and so far found 2 notable reductions.
MLS 4601905 initially listed with 399K few months back and is now 365K (around 10% reduction). It seems to be good house but price still needs to go down much more.
Another listing is 4587760 which is in market for last 6 months and initial asking was 399 K but now 385 K (this house may not be even worth 250K). The first listing is much better than this but this owner just seems to be bent on getting huge loss in the long run. Other than this there has been many more reductions but they are not notaiceable so far but I expect it to drop atleast by 30-35%.
Great stuff. And this is perfect, because now the GF of mine who wanted to buy in August is saying, ‘well when is a good time to buy if not August?’
And you’ve got great #’s and research to back it up.
I’m starting to think that a SFH/condo/townhouse on the market for 600k right now could be 400k next year!
I will continue to – as they say – ‘stack the chips’ and have that 20% downpayment ready to buy a place.
Keep the good stuff coming.
Lordy, I wish every community in the US had a site like this. Do you think, in your spare time, you could put one together for Seattle?!?!
Thankyou for giving us all hope, no matter where we live- if it’s hapening there, we know it is or will be happening here.
If property in Teaneck can tank (beautiful little town, 45 min. bus to Manhattan,etc.), then places like Seattle have a LONG way o go downward.
Make sure you are compensated for your patience, time and grief. Say grief because anyone who has not accepted the mania by not buying in last year or 2 has been lectured by others that own a house with their “buy now” attitude. Only problem it is your money and your risk.
Do not rush in at the first sign of drop.
Remember house and codos are up about 100% in last 5 years. a 10-15% drop is a pittance of a drop to where they should fal.
MAKE SURE YOU ARE COMPENSATED!
Ditto to the above!! And remember folks, the cardinal rule of this time’s go-around with RE:
!!!!NO BIDDING WARS!!!
Let’s all work together for the greater good this time- only extreme low-balling allowed. There will be plenty of great houses out there to choose from so just say no and walk away if your low-ball offers are not accepted- God will reward you with a beautiful CHEAP house that you can pay off and own free and clear in no time.
YAY!!!! GO TIGHTWADS GO!!!!
When go down to where they should Houses in NJ are still not cheap.
Theyn have always been high priced compared to other areas of country and I believe this will continue, but 30-35% drops are required to “so call “normalize” the market. The spin the realors call for “Normalized” what BS!
MAKE SURE YOU ARE COMPENSATED FOR ALL YOUR TIME PATIENCE AND GRIEF.
IT’S PAYBAC TIME!
2006 might tilt to the buyers advantage or not in terms of price. sellers can and probably will be mighty stubborn this year expecting boom time prices in a declining market. since the market has risen overall ~100% in 5 years, many sellers have plenty of equity cushion to wait out for those imaginery buyers.
remember folks, it took 5 years for this thing to inflate, it will probably take that long (and probably longer due to stickiness on the way down) to go back down. we might never see 5 year ago prices, but what’s clear is today’s prices are higher than they should be.
if you have the patience and the choice, wait until at least early 2007 before you jump in. that’s only 12 months from now and you’d pay off almost nothing in principal during this time.
2006 might tilt to the buyers advantage or not in terms of price. sellers can and probably will be mighty stubborn this year expecting boom time prices in a declining market. since the market has risen overall ~100% in 5 years, many sellers have plenty of equity cushion to wait out for those imaginery buyers.
remember folks, it took 5 years for this thing to inflate, it will probably take that long (and probably longer due to stickiness on the way down) to go back down. we might never see 5 year ago prices, but what’s clear is today’s prices are higher than they should be.
if you have the patience and the choice, wait until at least early 2007 before you jump in. that’s only 12 months from now and you’d pay off almost nothing in principal during this time.
MLS# 2107491 – Union, NJ
Could it be a typo?
Thanks for all the support, I really do appreciate the comments.
If you really want to support what I’m doing, please tell a friend about the site.
Thanks!
Grim
Anon,
The last similar unit on that street sold in 2005 for $290,000. They were really stretching with their asking price. The listing carried the usual “SELLER MOTIVATED” tag.
We bid $900k on a $1.1m listing in Northern CA today. Seller has until tomorrow to respond.
Will post the result here…
Grim,
Another article in NY Times over th weekend on Lowballing and Price Reduction on higher end homes.
A Relative Glut of Million-Dollar Homes
Great article. THe only bad thing was it says Millburn/Short Hills isn’t affected by lowballing…….
ChaoticChild
“Seller Motivated” What utter BS!
Okay a similar house sold in the neighborhood 6 months ago at $800k and my asking price is $875K so lower it to $825K and say I’m motivated
Game Over!
Glad to see our first discussed “LOSS”
Wonder if this will be a trend sooner than later in greater numbers..
Would be nice to see a weekly feature: “Sold at a loss!!” Or to give the other mortgage view blog “Another f’d borrower” a nod, maybe a “Another f’d buyer turned seller” feature :)
THe only bad thing was it says Millburn/Short Hills isn’t affected by lowballing…….
Isn’t affected…yet.
Patience young grasshopper, patience.
regarding our $900k lowball, the seller bascially told us to get screwed and that they were happy to leave it on the market until Spring if they had to.
We’ll keep looking for lowball targets.
Go back in the spring and offer them $700,000. Spring’s right around the corner- you can wait, right?
For Rahway buyer:
Why dont you go to Domania.com and find out prices in that apartment complex for the past 5 years ? You will get an idea of how 180K compares with prices of previous years, that is, how much the run-up is at 180K. And then you may decide if you mind/ dont mind supporting such a run-up. Again, the market has not gone down so much yet, so you might not get the condo if you bid less than 180K. I guess it is about how badly you want that place.
Anon – Were they angry at the 900k offer? You said they told you to ‘get screwed’ but I couldn’t tell if it was hostile or nice.
Did you get a sense they NEEDED to sell?
In the Spring, DEFINITELY go back. Looking forward to the fallout.