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

What are absorption rates… and why are they the best indicators of Market Performance?

Absorption rate is the average number of homes sold per month over a particular period of time and how long it will take the homes that are on the market to sell. Absorption rates are a great means of tracking market performance and predicting trends. Although they are usually used to indicate overall market performance they can be just as powerful when tracking sales by price range or by neighborhood.

Buyers market, sellers market or neutral market?

The amount of inventory determines which way the market swings. A neutral market is 6 months of inventory and anything less than that is a sellers market. Conversely, an inventory of more than 6 months is a buyers market.

What do absorption rates mean to a buyer?

Absorption rates can help a buyer to understand market supply and demand and this can be helpful when crafting his/her offering strategy. The longer a home has been on the market and the more competition that it has in its price range, suggests a lower offering strategy and a greater possibility of increased reduction off asking price.

What do absorption rates mean to a seller?

Absorption rates help a seller understand how long it might take a home to sell. They can also assist the seller in determining their pricing strategy. The most desirable home in a price range always sells first. If a seller wants to sell quicker, they want to have the most desirable home in a price range… even if that is one price range lower.

Disclaimer:

Absorption rates are a great tool that can be used by either a buyer or seller to understand the real estate market and to be in a better position for success. But they tend to fluctuate dramatically by neighborhood and by price range. Absorption rates are more accurate if calculated in smaller segments. A good example is the rate for Fishtown is 6.23 weeks and the rate in Queen Village-Pennsport is 4.33 weeks but the above rate for all of Philadelphia is 11 months! If you would like to know the absorption rate for your neighborhood, send me an email and I will publish the rate.

Potentially Related Posts:
The State of Philadelphia Real Estate
Philadelphia Forclosure Rate

Technorati: Philadelphia real estate, absorption rate, Philadelphia real estate trends, market conditions

posted by janice

For most of recorded history, sellers got all the agents and buyers jumped without a net. But since the late 1980’s, Buyer Agents have also become popular.

86% of buyers have Buyer Agents. So should you.

You need your own representation when you’re talking money. And experience has shown us that buyers who don’t have a Buyer Agent end up regretting it at the worst possible moment.

Any REALTOR® or agent can act as a Buyer Agent for you, but we have taken it one step further by earning our ABR designation (Accredited Buyer Representation). Only 13 % of agents worldwide have taken this extra step.

Buyer Agents costs you nothing. And gain you everything.

Usually, the Buyer Agent is paid from the seller’s commission. But he or she is legally obliged to place the buyer’s interests above all others.  Here’s what you should expect, and we deliver:

*Undivided loyalty

*Respect for your requests

*An explanation of all paperwork, so you understand everything you sign

*Coordinating work with third parties like mortgage brokers, insurers and inspectors, so you stay on schedule

*Objective advice, including honest pros and cons, so you can make up your own mind

Buyer Agents. Don’t leave your old home without one.

Technorati: buyer agent, philadelphia home buyers, accredited buyer representation

Do you worry about identity theft?

Buyers do this prior to even being preapproved for a mortgage as it takes about 10 days to become active.

When a creditor pulls your credit report all three bureaus put you on an active list and then  sells your name and information to companies buying mailing lists. Your private information is for sale. When you move most junk mail will not be forwarded to your new home. Will the person moving in after you be so diligent in shredding your vital information? Probably not. Here is what you need to do.

Stop credit card, home equity loans and mortgage solicitations in your mail before you move! All junk mail solicitations for credit cards, etc should be shredded before you throw it away.

          *Call-Opt Out 888.567.8688 from your home phone number. An automated 
             system will ask you to verify some information.

          *Wait a few days to receive the paper work that need to be signed or go directly to
            Opt-Out to print out the registration from, sign, and send.

That’s it. The entire process takes about 5 minutes and you will see a reduction in your junk mail. No more shredding!

Technorati: identity theft, junk mail, opt-out, mortgage, home buyers

posted by janice