lowballing

[sdcellar]

I was joking, but I would agree that upgrades have been inflated above their “value” along with everything else associated with housing. Kind of makes sense, doesn’t it (the correlation that is, not the hyper-valuation)?

For what it’s worth. I didn’t do a thing to the kitchen as it was like that when I bought the house. I wanted to rip out the granite and put in (what I consider) a beautiful glazed mexican tile.

Needless to say, most people thought that was a bad idea, but only because of the current popularity of granite (in other words, if it were reversed, they’d put in granite regardless of economics or whether I preferred it in my own home!)

I didn’t do it because I’m not wasteful by nature. I mean it’s certainly nice enough, so I figured I’d keep it for 7-10 years or so and then do what I wanted, but as it turns out we sold before that time came.

[Peace]

In the old days, the rule of thumb was that upgrades (vs renovations) did not increase the sale price – just made you house stand out from all the rest (wherein lies the value)

I’ve always gotten a kick out of “professional” appraisals because it has always really just been a matter of sq ft more than anything else – now what was done with the sq ft is what will make one house more attractive than another but not necessairly increse the sale price.

[sdrealtor]

Upgrades are worth what someone is willing to pay for them. nothing more, Nothing Less.

[Bugs]

What has really floored me is the amnounts of money the subdivision developers have been charging for their options and upgrades. When compared to the base finishes, the additional costs of these upgrades to the developer are but a fraction of what they were charging. Now I don’t mind if a developer makes a reasonable profit on options, but when I see someone buying a 3,500 SqFt tract home and paying $100k in upgrades and it’s all interior trim and stuff I just shudder.

Five years now the spread between base and maxxed homes in the same neighborhood is going to be probably but maybe 10% of the increased purchase costs on the maxxed homes.

Don’t get carried away with upgrades and options – it doesn’t pay.

Peace,
I’m not quite getting what you’re saying about appraisals being about sqft. Can you give me an example?

[PerryChase]

I believe that in the past people use to be concerned about the amount they paid for an item. Now it’s all about the monthly payment.

People buy $1,000 TVs on installment payments so why not have $100,000 in house upgrades if the monthly payment is only $50 more (until the loan resets, ha.ha).

[salo_t]

It happened again! I submitted one of my usual lowball offers on a certain property and low and behold the offer was rejected and then immediatly the listing was put into a pending status on the MLS. I want to assume that they decided to go with a better offer but this has happened at least three times now. Its odd because these properties that I make offers on have usually been on the market for a very long time then poof a pending status after the lowball. Can anyone explain why this is happening? I have only seen one of these properties actually go through escrow the rest just sit as pending.

[SD Realtor]

salo-t hang in there. Let me ask you this, you said that this has happened a few times. Have you seen the actual sales prices on the properties you have just missed on? If so then how far off were the sales prices to your lowballs? Also don’t forget that there are other buyers out there who are doing the exact same thing.

I put a posting up not long ago that I had actually witnessed a slight uptick in traffic. I don’t know why but I have seen it over the past few weeks. It could be that some people have actually got it and lowered the prices enough to get some offers, or perhaps some buyers actually decided to jump in… I don’t really know.

Again though salo-t, it will happen… I just submitted a lowball offer for a client and it got punted as well. On the other side, one of my listings just got a lowball offer 10% below listing price. My seller was not offended and neither was I… She told me she would not take it but I am working on her to at least counter… she is thinking about it… Anyways your patience will be rewarded…

[poorgradstudent]

Bugs said:
“Don’t get carried away with upgrades and options – it doesn’t pay.”

This is good advice for a lot of things. Cars, electronics… Generally you can’t go wrong only buying the features you really want, as you can often upgrade later.

[VCJIM]

I hate to do this, but this thread has *partially* been about the G35. After years of driving a thrashed car I am feeling the need to compensate. I’m seriously considering a new 2007 G35 4-dr MT, can the owners of G35’s comment on their experiences?

Before anyone goes postal on me about the finances, it would be a business lease…advised by my accountant.

[an]

I don’t think 2007 G35 is out yet. However, the reviews sound good. The interior will be all new. The mags say it’s much better than the current gen G35. It will have 306HP and 1/4 mile in high 13s. I think for $36k fully loaded, I think it’s much cheaper than the rest of its competitor. I love my G35c, even after 2 years, it still bring a smile to my face every time I walk to it :-).

[no_such_reality]

Let’s clear something up, 10% below asking price isn’t low-ball. That’s a legit beginning offer even if the asking price is at the real market.

A low-ball offer IMHO, is something that is 20% or more below the market. And the market is the real price houses are selling at with all the under the radar kick-backs in it like paying closing costs, points, etc.

In the current market, that means a low-ball offer can literally be 40% below asking price. There are plethora of homes out there that are looking at the price from last year and adding 20-25% to it when it is literally 10% below it. So for example, if the home last year was $512, they’re asking $620 the real market is at at ~$460 with a fair starting offer at $414. A lowball comes in below that say $370 or so.

[an]

no_such_reality, I totally agree, 10% is not a low ball offer, regardless of what you’re buying. 10% is just a good start point for negotiation. You never what to put in an offer too high that seller will accept it right away. You can always go up in offer but not down if you start the negotiating process. I would say low ball is 30-50% bellow asking price. Low ball is design to fish around for desperate sellers.

[sdrealtor]

I agree that 10% off is not a low ball offer but you cant always go up in an offer. If there is another person interested in the home you might not get the chance to buy a home you really like. Of course, AN considers them all relatively equal so it wouldnt apply to him.

[powayseller]

AN, just ignore him…

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