The Philly Pretzel

Tips on making a low-ball offer a homeowner might just accept.

BUYERS the BEST situation to submit a low-ball offer:

1. Seller has reduced the price for the 2^nd time

2. Seller has reduced price within 4 weeks

3. Property has been on the market 4 months or longer

4. Seller bought 5+ years ago

5. Property needs cosmetics but not total rehab

6. Property is vacant and seller has moved on

One word of caution: It isn’t worth anyone’s time to submit a ridiculously low offer, often it just enrages the seller who then refuses to negotiate. If the property is priced close to market value then an offer of 8-10 % below asking is low-ball. Properties that are priced using the “I would like to see how much I can get” or “I need to make this much” method are better just left alone.

The WORST time to submit a low-ball offer:

1. Seller has not reduced asking price

2. Property is less than 4 weeks on the market

3. Open House is crowded

4. Property is priced slightly below market value already

5. You have been looking for awhile and the house is “the one”

Some examples would be:

1913 Green St #1 - Reduced from $725k to $575k; Reduced 5 times. On market since 6/21/2006 (I think they are finally close to market value now).

36 Strawberry St #26 - Reduced from $290 to $247k; Reduced 3 times. On market since 9/17/2007 (they have moved on and are motivated).

850 S. 5th Street - Reduced from $415k to $315k 299k; Reduced 9 10 times (now we’re talking). On market since 5/19/06.

Potentially Related Articles:
NY Times: Lowball Offers on the Rise

Technorati: Philadelphia real estate, Center City Philadelphia real estate, market conditions, low ball offers

posted by janice

Make no mistake we still are in a buyers market in Philadelphia and probably will be for some time. The housing market took a much needed correction after a number of years of unwise purchasing but unlike what the media would have us believe, a correction in the housing market doesn’t equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision. This has caused an overall slowdown in the marketplace.

The National Association of Realtors says the US housing market showed signs of stability in February and existing home sales rose 2.8% nationally and up 11.3% in the Northeast, up for the first time in 7 months.

True, the numbers of homes sold in 2007 have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for 2008 projected to be even higher than the levels seen in 2002. Inventory in the Philadelphia region still remains high but is moving in the right direction. This equates to good news for buyers who have more homes at more price ranges from which to choose.

Philly Median Home Prices:

        • The median sold price for 2006 was $180,503
        • The median sold price for 2007 was $185,204
        • This represents a 2.5 % increase in price (nationally there was a decrease of
           8.2%)

Philly Sales Volume of Houses Sold:

        • There were 17,667 homes sold in 2006 for a sold volume of $3,188,950,036
        • There were 15,735 homes sold in 2007 for a sold volume of $2,914,195,066
        • There were 1,932 fewer homes sold which equates to a decrease in sold volume
          of 8.6% (nationally 23.8%)

Summary:

        • Philly has faired much better than the national average both in median sold home
           prices and in volume of homes sold
        • Housing demand in the Philadelphia region is down from 2006 but still relatively
           strong
        • There is a smaller percentage of supply in Philly than there is in the majority of
           the country

Houses that are priced consistent with market guidelines are attractive to buyers 

        • Attractive listings increase Buyer demand
        • Increased demand reduces supply
        • Fact-based pricing creates a healthy real estate market

Potentially related website:
Search All Philadelphia Homes For Sale

Technorati: Philadelphia real estate, Philadelphia median home price, Philadelphia home sellers, Philadelphia home buyers

posted by janice