What are reasons for price reductions in home sales?
July 12010
So we have finally found the right price. In a small village in upstate new york, the price was about 150,000. It is a foreclosure and comparables have seemingly showed that it is currently worth 160,000 and after a few "cosmestic renovations," it should be worth $200,000.
Great! We decided to put an offering of $115,000 on it as it seemed like a good starting negotiating point.
Actually no. The realtor gave us a certain date and said "by this date, the banks will be collecting offers, and there are already 3-4 offers on the house so if you really want to do it, you have to be quick." He even faxed us all offer papers and said "make sure this is faxed asap." By talking with him however, it seemed that there weren’t a lot of offers on the home (he seemed too happy to help us get the house.)
Now.
The date was supposed to pass yesterday. We didn’t send in the offer due to a small delay of paperwork by lawyer. Sad that the house may be gone, I checked today and the house has been reduced a little over $10,000!
What are the reasons that the house could have been reduced to a bit less then 140,00 when the house was already in a very low price! (When I checked the house it seemed okay but it needed a lot of cosmetic renovations.)
Does this mean that nobody put an offer on? What offer should I put on now?
By a few cosmetic renovations, what i mean is that the structure of the house is good, but it needs new carpet, painting, basement windows, small roof repair, flooring, appliances and new bathtub and toilet, basically less than $30,000 of work.
Ive really fallin in love with the house but i dont want to make a bad decision.
I agree with Blair—if you are dealing with the sellers agent I am not a bit surprised….It is their job to get the most money as quick as possible which results in the biggest Commission…If you have your own agent they should be fired….I would certainly retain your own agent who can cut through the BS.Since it is illegal to put a pending offer out to others interested this often happens.
July 1st, 2010 at 5:31 pm
Get yourself an agent. There seems to be some funny buss. going on and he will be able to help out.If you do get the house get a home inspector to look at it from top to bottom.
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July 1st, 2010 at 6:15 pm
I agree with Blair—if you are dealing with the sellers agent I am not a bit surprised….It is their job to get the most money as quick as possible which results in the biggest Commission…If you have your own agent they should be fired….I would certainly retain your own agent who can cut through the BS.Since it is illegal to put a pending offer out to others interested this often happens.
References :
Landlord
July 1st, 2010 at 6:50 pm
I am going to assume that this is a property owned by one of the large national lenders. That being the case, understand that the department which prices such properties rarely communicates with the department which receives offers on same. Most of the time, these departments are not even in the same city.
I’ve encountered a few over the years on which the price of the property was reduced AFTER an offer for more money was accepted. Sadly, Joe and Jane don’t always communicate the way they should.
The pricing department has guidelines to follow. After a certain time period elapses without a successful sale, the price is automatically reduced. That there is a good offer on the table in a different department does not seem to matter.
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