Serious newbie question on Irvine property we're interested in.

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interestedinirvine_IHB

New member
Hi all. I met someone today who said this may be a good place to ask this question....



We're looking at a property in Irvine - 2000 sq ft, 4 beds, 2.5 baths, in Northwood. Redone kitchen and baths; floor redone, but not well.

Biggest stickler is the roof is the original wood shake roof and there's a tree on the property line that is causing some superficial damage to the paved side of the home.



Asking price 699k. What do you think a good offer would be on this home. Also the house has been on the market for over 200 days. It looks like a flip that is not doing too well.



Any thoughts would be appreciated. Thanks in advance.
 
Too much money, even if it is in perfect shape. That's still 350 a sq ft. No rush obviously if it's been on the market for almost 7 months. Keep your deposit liquid in a high yielding CD for another 12 months, and then come back and house shop. At that time there will be nicer homes for sale @ 699k
 
So, being Captain Obvious, the bid of 630k we're contemplating of making is WAY TOO high and we should wait? If it were at 203, wouldn't that mean the house should really be priced at 406k. School me, cause I think I need it.
 
interestedinirvine,





In all seriousness, properties like this one will be going for $200 / SF in 2 or 3 years. If you make any offers on houses in 2008 or 2009 which are accepted, you will have overpaid -- perhaps by a lot of money.





I suggest you review the newbies post at the top of the forums or the analysis posts on the top of the main blog. All the information you need can be found there.
 
<p><em>In all seriousness, properties like this one will be going for $200 / SF in 2 or 3 years.</em> </p>

<p>$200/sf less the cost of replacing the roof, and termite damage, which will likely be substantial.</p>

<p> </p>
 
<p>Interestedinirvine, the median home value should be 500k by the end of 2008. In Northwood, the median value should be 600k by the end of 2008 due to its location premium. I doubt you'll be able to buy that house for less than 600K this year. If you want to buy in 2008, the best you can do is get the house for 2004 prices.</p>
 
<p>I wonder if you can even get insurance on a wood shake roof...what with the fires and all....</p>

<p>Anywho newbie....listen up.....put your ear close to the monitor........WAIT TO BUY !!!!! </p>
 
How do you arrange to view a house if you don't have an agent (assuming there is not an open house going on)? If you call the listing agent they always seem to ask if you have an agent, and if you say no they to want to have you "deal with their office" as a buyer. It seems to me the commission is set betwen the seller and the agent at 6% or 5%, and if you come in without a buyer agent the seller will end up paying this commission anyway. This is the main challenge I have found in home shopping - you see a house that looks interesting, you want to see it and try to have the fact that you don't have an agenet help you in your eventual lowball price, but you don't know how to get this message through directly to the seller. Maybe a note in the seller's mailbox is the best way....
 
Chuck



Most listing agreements are Exclusive Right to Sell contracts between the seller and the broker. The agent is a representative of the broker. Under these contracts the seller pays a comission regardless of who sells the property. In this case it does not make sense for a person not to use a buyers agent to represent them since they will be paying the same amount but have no representation. Any savings in commission is usually passed on to the seller not the buyer.



If you made an offer on a home that I had listed and did not want representation I would have you sign a disclosure that states you acknowledge this. That is one reason agents don't want to deal with you directly. There is case law relating to "implied agency". I would then do everything legal to represent the seller as I have a fiduciary responsibility to them and none to you.



Most sellers do not want to let a stranger into their home. At least if a prospective buyer is represented by an agent there is a trail of who they are and hopefully the agent qualified them as to ability to buy. I would certainly not let a stranger into my home would you?



Unless you were experienced in buying and selling you would probably be at disadvantage in the transaction and would not save money.



Why would one do that?



If the home is not listed at all you how would you be aware of it being for sale? If it is a FSBO then that is a different situation and the transaction is between you and the seller.



Regards
 
<p> <em>Any savings in commission is usually passed on to the seller not the buyer.


</em></p>

<p>If I bought without a buyer's agent, I would demand 3% right off the price of the home. I don't care that the seller is paying a fixed 6% !<em></em></p>
 
trooper



The sellers choice is to either discount the home by the 3% or not sell to you.



I have recently put in low offers where buyers didn't respond. We moved on. It is easy to state here what you would or would not do but it is a little more realistic if one had really made a recent offer. An example is the fact that Lennar let a guy walk over 5K which is a very small percentage in relation to the price.



Remember the goal is to find the home that fits your needs at a price you feel is fair in todays market.



You know the old saying about 'talk is cheap".



Regards
 
<p><em>An example is the fact that Lennar let a guy walk over 5K which is a very small percentage in relation to the price</em></p>

<p>I think Lennar was quite nice to this buyer, whom appeared to be disqualified by the builder; I think in part because he/she is first timer. I have seen much worse treatment such as builders gave buyers stern condition to 'take it or leave it within 24-hr, or to deal with law suits if no action'. Builders know exactly when to stop negotiation andwhen to take the appropriate actions.</p>

<p>Disqualified buyers do develop reputations in the builder community and may have difficulty of doing future business.</p>

<p>Troop,</p>

<p>If you can convince the seller to like you as a buyer, you can get much more than the 3% commission discount, guaranteed. </p>
 
NIR



I would think that if one were to find a suitable property at an acceptable price without a buyers agent and then to demand an additional 3% would probable kill the deal. Maybe I misread Trooper's post but I agree that a target price more than 3% below asking should be negotiated in todays market but the sales price should have no impact on what the commission is to a buyer.



As you are aware in negotiating "demands" are usually met with brick walls.



Example I am currently involved in an offer on a short sale listed at $990K which is under the last comp of 1.2 mil. We still went at $980K and are awaiting the banks response. It will be interesting to see what the bank says.



I think Chuck asked a legitimate question and I was trying to give a real world answer.



Regards
 
<p><em>If you can convince the seller to like you as a </em>buyer Oh cripes, does that mean I would have to write another one of those stupid letters? </p>

<p>Xsocal. I would want the 3% either in price reduction, or kicked back to me in the end. Why should the brokerage get the whole 6 for double ending it ? Honest question. And BTW, I'm a very likeable person. People would jump through hoops to sell their house to me ! Right NIR ?! </p>
 
<p>You could hire a lawyer to do the negotiating, and it would be much cheaper than 3%.</p>

<p>When I was looking at houses on the space coast, occasionally I would see a sign, march up to the door, try to look my most charming, and about half the time people would let me in and let me look around.</p>

<p>We got tired of the agents driving us around to unsatisfactory houses, and just went to open houses for a few months and found the house we are now living in. The kitchen was so ugly it was worthy of being included with the ugly house postings. In fact, there was a Motel 6 ad a while ago, that showed the ugly non Hotel 6 motel you'd have to suffer with--and I pointed out to the hub--look--that's the carpet that was in our house. So it just wasn't me; the carpet was so ugly it was an ad metaphor for ugliness. But the design was great, so I got to rip off virtually every surface and pick colors and carpets to suit my self. </p>

<p>I was just going to rip off the top of the cabinets to save money, but decided to get the new cabinets as well as the surfaces, and I'm glad I did--there was a NEST of palmetto bugs living in the damp under the sink. Gigantic roaches for those who, unlike ISM and Screw Real Estate, have never lived in Florida. (And for newbies, yes, they do fly.)</p>
 
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