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 purpose of 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.
Not going to break this up this week, primarily due to time constraints. The activity for this time period is very different than what we saw over the last period. It seems that the majority of the lowball offers are now the lower priced side. On to the list, right off the top.
MLS# 2264965 – Wanaque, NJ
List Price $199,900
Sales Price $125,00 (37.5% Lowball)
MLS# 2220651 – Sussex, NJ
List Price $155,000
Sales Price $100,000 (35.5% Lowball)
MLS# 2101025 – Hope, NJ
List Price $99,900
Sales Price $67,000 (32.9% Lowball)
MLS# 2222382 – Washington Boro, NJ
List Price $119,900
Sales Price $95,000 (20.8% Lowball)
MLS# 2214050 – South Orange, NJ
List Price $215,000
Sales Price $175,000 (18.6% Lowball)
MLS# 2213350 – Springfield, NJ
List Price $404,000
Sales Price $335,000 (17.1% Lowball)
MLS# 2065407 – Millburn, NJ
Original List Price $2,995,000
List Price $2,499,000
Sales Price $2,075,000 (17% Lowball, 30.7% off Original List)
MLS# 2250897 – Newark, NJ
List Price $595,000
Sales Price $500,000 (16% Lowball)
MLS# 2265714 – Plainfield, NJ
List Price $294,900
Sales Price $253,000 (14.2% Lowball)
MLS# 2096841 – Millburn, NJ
Original List Price $1,595,000
List Price $1,395,000
Sales Price $1,200,000 (14% Lowball, 24.8% off Original List)
MLS# 2072465 – Ogdensburg, NJ
List Price $259,900
Sales Price $225,000 (13.4% Lowball)
MLS# 2105998 – Elizabeth, NJ
List Price $289,900
Sales price $251,000 (13.1% Lowball)
MLS# 2235371 – Newark, NJ
List Price $299,000
Sales Price $260,000 (13% Lowball)
MLS# 2227732 – Hawthorne, NJ
List Price $399,995
Sales Price $350,000 (12.5% Lowball)
MLS# 2238623 – Westfield, NJ
List Price $2,195,000
Sales Price $1,937,000 (11.7% Lowball)
MLS# 2257589 – Washington Boro, NJ
List Price $260,000
Sales Price $230,000 (11.5% Lowball)
MLS# 2202675 – Fanwood, NJ
Original List Price $475,000
List Price $450,000
Sales Price $400,000 (11.1% Lowball, 15.8% off Original List)
MLS# 2238660 – Ridgewood, NJ
Original List Price $519,000
List Price $509,900
Sales Price $457,000 (10.4% Lowball, 11.9% Lowball)
The last listing here is a very special one. The current seller (Prudential Relocation) purchased this property on 12/12/2005 for $507,250, and has sold it at a substantial loss.
The original owner tried to sell the home, unsuccessfully. It was originally listed on 6/2005 for $599,000 (MLS# 2085164) where it sat for 101 days. It was reduced to $545,000 before it was withdrawn. It was relisted under a new MLS number (2211162) on 11/05 at $539,000 where it sat for an additional 84 days, being reduced again to $519,000 before being withdrawn. The current listing went active in January of this year at an OLP of $519,000. The accurate Lowball! amount would be somewhere around 23%, with the seller taking a $50k loss plus commission and other expenses.
Caveat Emptor!
Grim
These get better by the week!
I tried low balling last weekend (
No offers for me until 2007.
Following up on the owner in Short Hills selling at a $300K loss (MLS 2204767), we have this new Short Hills listing, where the owner is selling at a MASSIVE loss:
1) Closed in January 2005 @ $3,200,000 (MLS 1690499).
2) Installed $50,000+ kitchen.
3) Renovated bathrooms, another $50,000.
4) Listed for sale @ $2,590,000.
Some calculations:
$3,200,000 (purchase price)
+ $50,000 (kitchen)
+ $50,000 (bathrooms)
——————————–
$3,300,000 TOTAL
– $2,590,000 (current price)
= $710,000 LOSS IN 18 MONTHS
Short Hills listing, where the owner is selling at a MASSIVE loss:
1) Closed in January 2005 @ $3,200,000 (MLS 1690499).
2) Installed $50,000+ kitchen.
A $50K kitchen seems kind of low for a $3.2M house. Where did you get the renovation $$$?
Wow, MLS 2065407 in Short Hills sold for $400K below assesed value.
Most had been selling at about 1.4x assed value, which translated into $300-800K above assed values.
Forgot the MLS for that $710K loss, it’s:
2281127
Short Hills is out of my price range. I can’t imagine spending one’s entire retirement savings on a house.
“A $50K kitchen seems kind of low for a $3.2M house. Where did you get the renovation $$$?”
An estimate based upon a photo:
http://tinyurl.com/fz2yz
Even if all renovation was done for free, that’s a $610K loss, and those renovations certainly don’t look free!
a few more down days in the market
and you aint seen nothing yet.
besides,, if they sit and start to
think about the tax bill,
i also would find it hard to believe
50K for a kithchen in a 3m house,,
that just might be for the molding.
Once I was happy with 700Sq ft, then I moved to the burbs and landed in 2,100sq feet, then I wanted more and landed in 4,000 sq feet–take me back to 1,800sq ft PLEASE!!!!!
Lots of McMansion owners feeling that way about now.
Anon @ 7.22 PM,
A little OT – but you think you need $3M to retire. That is a wow in my book.
CNS
Are these really lowballs? Or just a little off high prices?
CNS
Current conservative estimates – need approx. 10-15 x annual bt earnings to retire with no reduction in lifestyle, assuming normal retirement at 65 and current average life expectancy.
That’s in addition to SS annuity, and assumes conservative investment and most tax advantageous withdrawal of contributions.
Thank goodness I like my job. I’ll be there until 80.
Honestly? Most of these are still overpriced. They are in no way “good deals”.
Asking prices have been all over the place for the last few months. Some high, some low. Nobody seems to know where to set prices anymore. Everyone seems to have their own ‘strategy’.
grim
Unrealtor — if you look at the original listing (1690499), the listing shows 3.38 acres of property.
The new listing shows 1.25 acres of property.
So the current owner very likely subdivided it into 2 or 3 lots, and is looking to sell the house independently.
So, no he hasn’t necessarily suffered a loss. If he managed to subdivide into 3, he could turn up a profit.
Which website lists these MLS? I wanted to view some lowballs in Middlesex County.
Added a bit more information on the last lowball I listed..
MLS# 2238660 – Ridgewood, NJ
Original List Price $519,000
List Price $509,900
Sales Price $457,000 (10.4% Lowball, 11.9% Lowball)
The last listing here is a very special one. The current seller (Prudential Relocation) purchased this property on 12/12/2005 for $507,250, and has sold it at a substantial loss.
The original owner tried to sell the home, unsuccessfully. It was originally listed on 6/2005 for $599,000 (MLS# 2085164) where it sat for 101 days. It was reduced to $545,000 before it was withdrawn. It was relisted under a new MLS number (2211162) on 11/05 at $539,000 where it sat for an additional 84 days, being reduced again to $519,000 before being withdrawn. The current listing went active in January of this year at an OLP of $519,000. The accurate Lowball! amount would be somewhere around 23%, with the seller taking a $50k loss plus commission and other expenses.
grim
dreamtheaterr,
These are from GSMLS, however I don’t believe you’ll be able to pull up the MLS numbers unless you have access..
grim
“If you look at the original listing (1690499), the listing shows 3.38 acres of property.”
Good eye, didn’t notice that. Yeah, that would make a big difference.
I believe this is the subdivided lot:
MLS 2260694
http://www.realtor.com/Prop/1057058361
$6,950,000
8 Bed, 10 Bath
15,000 Sq. Ft.
2.1 Acres
Year Built: 2007
Don’t know how much that 2 acre lot sold for, but probably about $1.5M.
The last listing here is a very special one. The current seller (Prudential Relocation) purchased this property on 12/12/2005 for $507,250, and has sold it at a substantial loss.
Grim — just a quick comment. Some of these relocation services are actually arranged by a homeowner’s employer if the home owner is moving out of state. I don’t know how it all works, but the Reloc company sometimes purchases and resells the house, but the profit or loss still go back to the original owner. I’m not sure what the advantage of the deal is, but its apparently common
$599k to $457k is a nice lowball.
24%.
How much will this house sell for in 2 years?
$375K?
Now we are getting somewhere. This is good example of things to come.
does anyone know what annual rental to house price is a good purchase price?
I know that there may be other factors surrounding the sale.
It’s a very interesting case either way.
grim
Grim,
grim_ghost is right. The corporate employer of the original owner probably took the loss.
CNS
This post has been removed by the author.
Could someone provide the url for mls lookup. Please!
Anon,
Depends on the area..
I’d say for Northern NJ, 12x annual rent roll..
grim
For anon 9:03
http://www.decisionaide.com/mpcalculators/MPBuyVsRent/MPBuyVsRent.asp
http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH
http://www.countrywide.com/Calculators/RentvsBuy.asp
http://www.quickenloans.com/mortgage_calculator/home_buying_calculators/rent_vs_buying_calculator.html
http://www.mortgage101.com/Calculators/BuyVsRent.asp?p=mtg101
Some folks say if you can’t get a montly mtg. of 1.45 or less of your rent, you’re better off renting over a specific period, like ten years.
http://www.gothamist.com/archives/2005/03/30/rent_vs_buy.php
anyone have a link to the ridgewood property where i could see a picture?
unrealtor, i know you can do it. also can you describe how you do it?
“anyone have a link to the ridgewood property where i could see a picture?”
Try this:
http://tinyurl.com/q47wh
“unrealtor, i know you can do it. also can you describe how you do it?”
Sorry, the MLS system is not public.
unrealtor, thx, a bunch
i think this house is worth even less then the lowball, i am thinking 400 tops only b/c its in ridgewood and even then i wouldnt be buying,
To DreamTheaterr:
go to realtor.com, search options, at the bottom of the page, you can type in MLS number, it gave you the current MLS.
But you can’t view the expired MLS.
Anyone know how I could find out how much a house sold for? Mls# is no good for selling price right?
Ask here, you’ll likely get an answer.
The alternative is to keep checking the tax records or the local paper.
grim
Can anyone check the sales price for two homes that sold on this block:
Duer Place in Weehawken NJ 07086
Thank you
Unrealtor, An estimate based upon a photo:
http://tinyurl.com/fz2yz
Even if all renovation was done for free, that’s a $610K loss, and those renovations certainly don’t look free!
that guy has got about 20k in the built in fridge, the commercial range, dishwasher and hood set-up, including installation. That kitchen could have cost even more than 50K.
And I’ll take that bid to “the price is right!” :-)
Thanks for a very interesting edition of Lowball.
The Realtors® have already conceded the higher end of the market is slowing, but many insist that “affordable” homes are still flying off the shelves. It’s good to see some evidence to the contrary.
the luxury market is dead. the entry market is more robust but only after a few price reductions from ridiculous original asking prices. selling prices are definitely trending down from last year. i expect to see more declines in the coming months.
Thanks for another great lowball post!
I simplely think the absurbly overpriced house market will get a overhaul. Here is my logic:
For people who have (or not even quite have) enough money to buy, they already DID during 2001-05 price hike! These demands are been forced to meet by scary price skyrocketing projection.
The current demands are made of former-priced-outs and new-career-starters that both have limited money resource.
Flipper getting desperate, price is now $100K below original asking, and 100+ days on market:
MLS 2281275
$639,000
http://www.realtor.com/Prop/1060522933
And a new MLS number for the new price!
Still about $150K overpriced…
Thanks anon 10:09!!!
Very helpful link! It works!
Anon 10:09, it’s unwise to publish that link.
Grim, I’d suggest you delete that post.
I have been using that method for a year but didn’t want to publish it. My guess that it will soon not work if lots of people use it.
Andrew
We have been waiting around for about 1 year after selling our last house at a 110K profit bought in 03 fixed up sold in 05 – Does anyone have any insight into the market in Oakland… Looking at houses in Chuckanutt area and Dogwood Hills sections – What are good prices for 4 bedrooms in those areas? Does this town seem overinflated?
Unrealtor — You are right in that MLS 2281275 is overpriced, even though it has dropped $100k from OLP. They are asking $639k for a small house on a dreary block not close to the train station. Let it drop below $525K, which is the price the flipper paid late last year.
The post in question has been deleted.
Please do not post that information in a public forum.
grim
listen i know everyone on here is gaga for a bursting bubble, but can we at least all be honest and say that many of these homes (e.g., the ridgewood house) was just not worth the asking price and was merely overpriced…bubble or not. let’s at least be honest…any bubble had no effect on the price of that house…they were just way off asking.
anon @ 6:01
The asking price was dictated by the bubble.
If you’re pay 12x gross rent in NJ then you are paying way too much. 10-12 times rent in Manhattan is probably a decent investment but I wouldn’t pay more than 8-9 times gross rent in NJ.
That Ridgewood house must be in the crappy section. Most of Ridgewood doesn’t look like that.