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Lowball offers, get serious

limbo, how low can you goI received an interesting email the other day about a home listed in the Charleston MLS for $599,900. The listing indicated that the asking price was just reduced by $50,000 and the seller will consider all serious offers.

So, how low can you go.

The question, "so what would be considered a 'serious offer'. I would throw 300 at it ... but that's nothing near the asking price."

Despite what you may have heard about the current Charleston real estate market and despite the turmoil in the economy, an offer that is thrown out for 50% off would not be considered serious by any seller.

Yes, you can certainly buy advantageously in today's market environment but homes are not like stocks and they aren't going to be traded and sold for pennies on the dollar.

Photo courtesy of Flickr by jdbartross.

Published Monday, October 20, 2008 7:10 AM by Howard Arnoff

Comments

# re: Lowball offers, get serious

50% is extreme but I saw 4 homes just last week were the sellers started off asking around  1 mill about a year ago.  2 of the house are now down to 700k and the other two are being offered as potential short sales at 600k.  

If you have the stomach for it...now is pretty good time to buy.

Monday, October 20, 2008 9:55 PM by Claude Daigle

# re: Lowball offers, get serious

Claude, it isn't 50% off, it's the idea of *throwing* an offer out that isn't serious. Buying a home isn't negotiating at a flea market.

As to what you're seeing, it's probably that new construction in Mount Pleasant which went under construction before sales slowed. So the builder has to reduce, reduce and reduce until someone steps up. Now how about this character who figures to *throw* $350 at the 700k home you're referring to.

Two chances, slim and none, and slim left town.

And if you've got the stomach for it, take a spin on a *potential* short sale. As I've said on numerous occasions, it ain't gonna happen. So your stomach is in knots wanting to buy your dream home waiting for the bank response which just isn't forthcoming, you see, with a short sale, there has to be a better reason for the bank to accept the terms than the fact you are underwater, you actually have to *prove* a hardship. Not being able to sell is not really a hardship. 

Wait until the foreclosure when you can actually buy it. I was just about to write another short sale, short tale post so keep a look out for it.

And speaking of having the stomach for it, that 700k *investment* in a house which *might* go down another 10% to 630k seems like a better investment than 100 shares of you take your pick, Bear, Fannie, Freddie, Lehman, Wamu, Wachovia, etc., etc., where the value plummeted to a couple of dollars at best.

And you get to live there, plus, if you plan to live there a while, it will more than likely increase in value over the long term.

And it more than likely will not to go to zero.  

Tuesday, October 21, 2008 6:04 AM by Howard Arnoff

# re: Lowball offers, get serious

You are correct in that the houses I'm referring to are new construction.  Whats interesting about the short sales houses is they were both listed at a lower number, received contracts and now both are back on the market at a higher price.  I guess the banks decided the original short sales asking price was too low. Banks are waiting for the gov to buy up these bad loans and don't appear to be in any rush to loose $$$ on a short sale.

Tuesday, October 21, 2008 10:32 AM by Claude Daigle

# re: Lowball offers, get serious

Claude, don't count on the new higher price being approved any time soon either.

Tuesday, October 21, 2008 11:15 AM by Howard Arnoff

# re: Lowball offers, get serious

The other side of the negotiation with deep recessionary forces and uncertainty at work is the absurdly high asking prices. That low ball stuff being thrown out now may look attractive come Q1, Q2 '09.

Friday, October 31, 2008 3:55 PM by richard feit

# re: Lowball offers, get serious

Richard, thanks for stopping by. You are absolutely correct, some of the "asking" prices are still ridiculous. But only some.

There is still true value in many properties. And as I said to Claude, "throwing" a 50% off offer will not likely ever look attractive to a seller and I would like to highlight the word, *throwing* (in hindsight) and should it ever, we are in much more trouble than even the most negative predictions.

Friday, October 31, 2008 6:55 PM by Howard Arnoff
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