San Diego Housing Bubble News and Analysis

I'm golfing at pebble beach next week. Which club should I use?

Stan

Which ever one keeps you out of the bunkers!

Ok you might not agree with the timing and I'm not here to debate you on that. The question stands. What percentage below asking price would a bank ignore?

What stansd means is that you haven't provided enough information. Too many variables. You'd need to post the actual properties, or something comparable. Even then, it's tough to say.

http://www.realtor.com/realestateandhome...

http://www.realtor.com/realestateandhome...

http://www.realtor.com/realestateandhome...

Have your agent pull sales in the city for the last 6 months, they can get it as a CSV. Then open that in excel and look at Sales Price / List Price for all the properties. That will give you a feel of what type of low balls are working.

Sales Price / Original List Price gives you an idea of how well people are pricing their properties.

Generally speaking, median priced homes go for around list (many REOs go for 103-105% of list because the buyers are rolling closing costs into the loans) because that is where all the demand is.

If you think of a bell curve it is usually the margins where the big price breaks off list happen. But I would say any bank owned home on market over 60-90 days is more likely to be lowballed. But usually (not always) they are pretty responsive to the market because they do BPOs and just match price at or under the market price reported by the BPOs.

p.s. I'd start using Redfin.. more information available to Joe 6 pack's then through Realtor.com:

http://www.redfin.com/CA/La-Mesa/5821-Ja...

The golf analogy isn't really that bad. It depends on what you are shooting at. You won't likely get a low ball accepted on something everyone else is bidding on. That said I think it is best to take what the listing office is saying about traffic and offers with a grain of salt. So, only brand new listings are almost out of the realm of possibility with low-balls. Anything with market time is a candidate for 10-20% under asking bids or more.

There are occasionally properties that merit as much as 40% below asking offers, even after it has been reduced a few times.This would probably be a cash deal on a real dog.I have never gotten anything accepted more than 20% from asking but I see a good candidate for lower bids occasionally. These are properties that have problems and risks that the seller may or may not be aware of. One way or another, it is going to cost something to fix the problems. You have to point out what risks the buyer is taking that are not priced in.

When you write extreme low offers the idea is to have a good argument for it and then assume it won't work.If you don't get an answer and the property remains unsold, go back in a month or two to see what they think. There are one or two other threads on these kinds of offers in the archives.

The offer is too low when someone else buys the property you want for a price you are willing to pay.

We found a house that we fell in love with. Did all the market research, put in a very logical offer with explanations linked to recent comps in the area. The seller received 2 other offers just as they were about to send back the counter-offer. Long story short, we upped our 2nd offer by $50k and hoped for the best. Turns out,we were outbid by $10k. What's tearing me up is that we were willing to pay more than our final bid for this property. At the time we were caught up in trying to get the absolute best deal possible and in the end, we lost our dream home over $10,000.

Is this thread about low ball strategies or "love" of "dream houses" and regret for not participating more aggressively in bidding wars?

There are lots more houses out there.

What you mean to say is "You lost your dream home for 60K more then
you tought the rational price was".

There are lots of houses for sale and in the next 18 months there
will be lots more for sale.

Thank the new owners. They just brought down the comps some more. The next house will sell even lower. You'll find another dream house for less :)

You could've submitted a backup offer for a few thousand over the accepted price. The seller would've known your offer was available if the buyer tried to jerk them around during the escrow process.

I'm sure you are right and I'm all for the comps coming down. I have been waiting this long for the bubble to pop and I really didn't want to jump in this early in the downturn anyway, so once again I will sit on my hands and wait.

You also could have left your offer where it was, letting the seller know that if the deal falls through and they can't find another buyer, you might still be interested.

I have not read all the responses and this is directed at the op.

Percentage-wise, zero percent is as low as am willing to go. Below that you are just dealing in negatives and imaginary numbers.

On a serious note, I find that typically, a slightly over-priced place can start as low as 20% below asking.
On a place that has an asking price that is supportable by comps, I would stay within 5-10% of asking (unless the buyer does not care if he gets it).
If the place is wildly over-priced (there are fewer now than a couple years back) then I will come in as low as I need to for it to make sense.
Typically, any offer needs to be supportable by comparable sales to be taken seriously.
Sometimes there is some non-obvious aspect that can make your lower-than-comps offer better (eg: it is all cash, the seller was charmed with your wife). The short sales are often an example of this. The patience they require costs money. The showing is generally tough because they are usually occupied with sellers or tenants.
Sometimes seller fear can make a low offer more desirable. However, betting on this is like betting on seller cockiness during the boom. Its not a good indicator of anything and is unreliable as to its predictive capactiy.

As a general rule, though, one should not base any offer off of anything other than market conditions. The comparable sales tell you what other people are willing to pay.

People who offer inappropriate amounts are as effective as those who ask inappropriate amounts.

Sounds like another six months of waiting is in order before sales price verses rents start to make sense on a regular basis.