What do you want? Open Discussion
This is a multipart thread for Sunday.
First, I'd like to ask everyone why they visit this blog and what I can do to give you more of what you want. Do you enjoy the Price Reduced and Lowball features? Do you look for local news recaps? National news? Economic viewpoint? Real estate statistics? Any ideas that you would like to share?
Second, I'd like to know the towns that you are interested in. I'd also like to know the average prices you are willing to pay. If you are willing to provide pricing info, please do so anonymously.
Lastly, I want to know what would be the argument or statistic that would finally convince you that the bubble has burst.
Please, take some time to provide some feedback. It helps me to understand what everyone is looking for.
Caveat Emptor!
Grim
First, I'd like to ask everyone why they visit this blog and what I can do to give you more of what you want. Do you enjoy the Price Reduced and Lowball features? Do you look for local news recaps? National news? Economic viewpoint? Real estate statistics? Any ideas that you would like to share?
Second, I'd like to know the towns that you are interested in. I'd also like to know the average prices you are willing to pay. If you are willing to provide pricing info, please do so anonymously.
Lastly, I want to know what would be the argument or statistic that would finally convince you that the bubble has burst.
Please, take some time to provide some feedback. It helps me to understand what everyone is looking for.
Caveat Emptor!
Grim
75 Comments:
i've been visiting this site for a couple months now and reading your entries was what gave me an actual reality of the markets...i've convinced my brother and parents to hold off on buying a house as well since, especially in the price range we are looking at 400 - 500K , even a 10-20% reduction can mean a 100 K , which is what our downpayment would be. Its been tough to convince my parents since they are old-school and have a hard time believing that real estate could be a negative investment. I am primarily looking at Middlesex county. I know they list in GSMLS, but for some reason you never mention that county in your list of counties from GSMLS - any particular reason. Always wondered why, but this is the first time I'm actually posting a comment. I really enjoy LowBall and your comprehensive collection of current articles etc. You're doing a great job!
I'm also looking in Middlesex County. Does anyone have information on S.Brunswick or Monroe, NJ? I'm interested in the $650 $800K price range. Are the homes in these towns being repriced?
Looks like some of new construction homes are owned by investors. They are built and completely vacant. Some of the homes have been on the market for more than 90 days.
I visit this website several times a day and I find all the postings very helpful.
Off to some open houses, will post what you've asked afterwards!
I'm keeping my eye on upper Bergen County. I bought a home (foreclosure) in '91, moved up to a larger one in '95 and sold due to d-i-v-o-r-c-e in '00... damn.
Before I bought that last time, I thought I would never be able to afford a decent home where I wanted to. But then the market dropped. I'm waiting for the same thing to happen.
I'm here to keep my pulse on the market and to exchange thoughts & opinions on the cost of housing.
They can call it a boom, a bubble or a donut. I just know that prices are out of line with basic financials and should come down.
FYI:
Bergen County Active Listings
Sat. 3/04: 3,129
Sat. 3/11: 3,233
Today: 3,240
Informative blog! My husband and I would like to eventually buy in either Metuchen or Westfield (400-500k) but have been holding off because of the crazy imbalance between home prices and median income. How is it that a household income well above median only buys a well-below-median kind of house?? Unless the median income in NJ suddenly doubles, I can't see how the market can sustain itself. Investment? We might as well throw our money into a sports car! We pay next to nothing on an apartment not much smaller than what a mortgage 3x the expense would buy, so we're sidelining it, hoping patience will win out. If anyone has specific information on Metuchen, Westfield and the surrounding towns, we'd really appreciate the guidance!
i read you site ofter, love the lowball and price reduced.
i am looking in union, essex and bergen, specifically, westfield, glen ridge, glen rock, tenafly, millburn basically something pretty close to NYC that also has a good school system, even thought this is my first home and i dont have children, i would not like to be over 500 (although with todays prices it seems like i have to be), and would like a place to stay a while, from the past boards, and site, i guess some of the concensus is to offer a price that has between 5-7% price appreciation since 2000 for the avg price of a neighborhood. however by doing this for homes in my range almost all homes are 75 to 100g's overpriced. I would like some more insight on this and if anyone is getting a good deal from current listings and sold prices. otherwise, i love your work and this site.
Grim:
In my opinion, finding evidence of accepted lowball offers where the seller is actually taking a capital loss would be critical.
You had an example from Union a couple of months ago.
It's difficult, because it would have to be either be a flipper, or someone who purchased later than roughly mid-2004.
It would take having to cross check your lowballs with tax records to see whether you had a sequential drop in sales price.
As we know, the is so much that goes one behind the scenes, and the sales price may only tell part of a story (e.g., purchase price + huge capital outlay for upgrades - sales price = capital loss, even though purchase price < sales price).
People can rationalize taking less profit than they would have hoped, but the act of having to go into their own pocket in a effort to get rid of a money losing investment is a sign or PAIN or PANIC.
I know this request is a lot of work, but you asked :)
chicago "bubble boy"
I am (sort of) in the housing industry and I visit a number of housing bubble related sites daily.
I find your work to be among the best on the net, you're factual, relevant to my situation and a clear writer who provides real insight into the mechanations of the real estate industry.
Your site is of particular interest because of excellent features such as lowball and price reduced that provide information that you simply cannot get anywhere else.
It also is very helpful to me that you are in New Jersey. I work in Monmouth/Ocean County and while there are some differences in the market forces, your site is as close to an accurate picture of the local real estate market as I can find. If you could provide some Shore real estate info I would be ecstatic.
This was not intended as a suck up post or to blow up your ego, you simply do a good job and I wanted to let you know what I appreciate about it.
Addendum to the post from Monmouth/Ocean.
I think history will say the bubble burst in June/July 2005. Look back at the sentiment's expressed before and after that period.
The "no bubble" voices went silent and the market really did start to slow down in a lot of places.
I have tried to remain non-committal as to how this would end, but on Thursday or Friday I heard something that made me certain the end is going to horrible.
The Bush administration released a statement that said there would be a stable correction with a soft landing. Since they have been wrong about everything else, I can only conclude that we are in for real pain real soon.
Anon 2:58AM:
There is already the NJ Shore Bubble Blog. I don't think that Grim wants to infringe. NJ Shore is also a good info source, it's just that Grim overshadows the others.
I would actually go as far as to say that this Blog is better than the Ben Jones site. I think that Ben Jones doesn't really spend the time to analyze and create original content. It also doesn't help us that it focuses mostly on the Southwest and CA.
Grim:
I think that if you could get someone on the ground in Edgewater/Fort Lee, you would have some of the best information and anecdotes about a Bubble Pop. A "canary in the coalmine" as it were.
We discuss NNJ as a whole, but I would bet that this little micro-market in the Southeast corner of Bergen County will be the site of a bloodbath like no other.
I like lowball and price reduced. I would really like comps on price reduced - sale prices from the neighbourhood from previous years. The problem now is working out whether the prices were just set too high or if people are getting less for their houses.
I think I am at the lower end of the scale price wise. I have been keeping my eyes on older properties with big yards, that were $190K in 1998 and go for $350 - $400 now, I would like them to drop down at least to the mid $200's, I want to keep this affordable on one income so that when I return to work we can afford a good savings rate and comfortable lifestyle.
To anon re South Brunswick, Monroe.
Not seeing price drops but properties definitely sitting on market. Problem is area overpriced by even more that neighbouring areas, probably due to school hype (schools are good but not as good as many are led to believe - they have a lot of social problems they cover up).
I enjoy reading what is really going on. Brokers like Nancy Cook of town & Country Realty in Chatham Lie and overhype things to get listings. Then houses sit. One house recently sold in Chatham borough for just a little over $1 million. The house sat since last April with Price reductions from 1.595 million. Nancy has confided to my wife, during a discussion at our country club, that its all about the image realtors portray. She says the key is to keep buyers "on the hook" and tell them prices may be dropping in other towns but they continue to rise in Chatham. She also will say that things continue to go up, only now its single digit increases. My wife and I would like to upgrade in town, but our house that we paid $315,000 for in 2000 is now supposededly worth $900,000. The kicker is, the house I would like that should be $500,000 is now $1.7 million. things are way out of control in Chatham and these realtors are no more than glorified stock brokers and car salesmen.
Grim,
This blog is now an addiction :-) I find everything written by yourself, and all the people who respond very useful. Many thanks for providing all this info and for making this a vibrant forum.
Although resident in NJ since 1997 as guest-workers, renting an apartment, we gave buying real-estate a thought only last year after becoming landed immigrants.
With one child in college since last fall and the second going in 2007, the amount of house we need is small. 3 bd, 2 bath, some storage space in attic or basement is what we need/want. In 2003, such houses in Iselin in Middlesex county (where we are living and looking) were 250K, and townhouses were 200K. That is what I am willing to pay, since that is our maximum affordability as a 1-person earning family, with 2 in college, and old age not very far away.
To wait this madness out is our only option. If prices do not come down enough within our affordable range, we will leave the town in 2007, once the second child finishes school. We might even leave the state !
The low-ball is a good morale-booster, but since asking prices themselves have been so ridiculous these past 2 years, the asking and actual sale prices dont give an indication whether the prices are really making a retreat. An idea of what the house might have sold for in 2003 or 2004 would provide persepective on market direction. I know that is very difficult to do, given that every individual house is unique in so many ways, but at least an approximate range would help.
My husband and I absolutley love your blog. It allows us to receive all pertinent information in one spot. The low balls and price reduced segments are our favorites.
We are specifically looking in Basking Ridge, Bernardsville, Mendham, and Chester. Our price range is 550-650k.
It is just very depressing that in this range, we can't find a thing. We now know where the less desirable sections of all of the above towns are located. Very sad!
What are your thoughts on Bridgewater? I feel that this town may have the potential to become similar to Bernardsville and Basking Ridge, but I wonder how everyone else feels. Let me know your thoughts.
Thanks for all of your help!
Hi,
I have been looking for house in Parsippany/Morris Plains/East Han over area since 2003. I have been told back then that price will be drop but instead it is increased by 10-20%.
I think there no consistancy in the lisiting price. Seller list their homes at very high price then CURRENT market.
Real estate agent does not care. They will list any home at any price as seller want. They think that if I don't list then some one else will..
For an Example,
MLS #: 2102708, was listed at $678K and reduced to $649K then it was widraw from the market. Now, it is listed by owner at $620K
http://www.owners.com/Search/ShowListing.aspx?l=1723023&sp=sl&s=cc+53060%3br+10%3bz+07054%3bp+1
MLS#2246828, on the same street, is listed for $799K.
Now, how would you compare the market?
If MLS#2246828 is sold by 10-15% less then listing price, Do you think it is a lowball?
Anon - Re Bridgewater
Basking Ridge and especially Bernardsville are compact towns full of old money. Bridgewater is more spread out with a lot more new money / salesman stuff and a LOT of townhouses and condos that are currently badly overpriced. Bridgewater schools are hyped up and aren't bad (though rapidly becoming crowded) but there are drug and crime issues, a lot of dealers hang out around the restaurants on Route 22. A little bit further out is nicer but still expensive and if commuting to the city will take a long time.
I think you can be pretty irreverent, which is a really good thing. I like the "Lowball" threads and the "Priced Reduced" threads because they show just how grossly overpriced many listings are and that folks who really need to sell will sell for a lot less. More stats and data from other parts of the country might be nice, but don't kill yourself -- there are tons of local real estate blogs for different areas of the country already. I guess just keep doing what you are doing. Your irreverence ("Lowball!!!" makes it fun to read
We are home shopping and visit this blog all the time. We are interested in Ocean County, shore area. Our price limit is $500k. The houses we have seen in that price range are in need of total renovation.
We have seen many listings expire and relist. We hear, "Things are picking up for the spring" from realtors, but there is nothing selling.
We would like to see the listing prices, reductions and sales price of homes in the 08735, 08742, 08730, 08736 zip codes.
A few local builders we know have dropped their spec. house prices to make sure they sell.
Realtors have not had to work for thier commissions for quite some time, and are trying to ignore the changing market. It is going to take honest reporting to let buyers know they now have the upper hand in this market.
"What do you think? For a guy in his mid-20's it's pretty bleak."
How long have you been in the job market, 3 years? Relax, skip this bubble mania, you've got plenty of time.
I read this blog because I personally know many realtors. They are the most uneducated, ignorant, morons in town, but on the other hand, portray wealth and arrogance.
The realtors I know lie, cheat and scam people out of thousands of dollars. I think this blog should have a weekly post to expose these liars and cheats to the public. We are no longer at the mercy of the housing market and do not need to pay outrageous prices/commissions to these jerks.
I found this blog a few weeks ago by running a Google search for "NJ housing bubble" and am glad I found this place.
I really wouldn't suggest changing a thing, it's pretty on the mark as-is.
And it's best to be realistic in your blogging objective, rather than take on some mega-super-duper-blog-for-everyone and burn yourself out. Focus on what you know, and what your time allows, and we'll keep enjoying the excellent site.
As for houses, we're looking in the Millburn / Short Hills / Summit / Chatham area.
We had considered paying into the $800s, but it seems the market will allow us to pay into the $700s within the year. We may wait longer still.
The most relevant statistic that there's a bubble, is how far out median home prices are from median income. As for the statistic that the bubble has burst, this one stands out: last year there were 3,500 properties for sale in Phoenix, and today there are 38,000 (not a typo) properties for sale in Phoenix!
As for bubble busting locally in NNJ, I'm watching desirable properties sit for weeks and months, and have also observed several such homes come back onto the market after the buyers bailed during the 3-day attorney review period.
This 'spring market' will be the turning point. There are still some buyers out there who are clueless and bidding up overpriced properties, or who are perhaps relocating for work and must buy, but sane buyers who are paying attention to the market are waiting for prices to return to realistic levels.
Grim,
Thanks for the excellent work you are doing.
Love the LowBall feature.Would be glad if you can include Edison ( Middlesex ) and Somerset County. I'm planning to buy in the price range of 350-375.
If home prices take a plunge of 15-25% in NJ would be convinced that the bubble has burst.
Grim:
This whole soap opera is going to make a good book. Make sure you document everything and keep it organized. Back-up all the files and come up with a good filing system. All your effort should pay off for you at some point.
Maybe you can launch a career as a real estate agent (just kidding).
chicago
FYI - in reverence to the Sopranos, there will be a moratorium on all North New Jersey blog activity from 9PM-10PM EST this evening.
Don't disrespect the Bing.
Hi, thanks for your time in maintaining this blog. I particularly like lowball. I there any way a photo or any other info can be posted on these sales.
I am a renter who wishes I bought some time ago and does not want to pay retail at the moment when things could get cheaper. I have noticed that UK home prices started to lift again so I am not convinced that this can't happen here too. Strangley, the UK seems to lead the US in many things financial and economic
Fab site, Grim. You do more original, fresh reporting than any journalist out there writing on housing. And you don't even get paid for it! A thousand thanks.
Just saw a television ad from Century 21, which is apparently aimed directly at those waiting out the bubble.
The ad features a young couple, with the wife prodding the husband to buy a house.
It went something like this:
WIFE: Come on honey, we can handle that house, the neighborhood is good, the schools are good...
HUSBAND: Our kids are only 1 and 3 years old.
CENTURY 21 AGENT ON ANSWERING MACHINE: The house is perfect for you, it's a great opportunity.
WIFE: [Looks longingly at husband]
HUSBAND: OK, let's do it.
WIFE: [Smiling]
[Screen fades to black]
TEXT APPEARS: "Century 21: Because Life Happens"
(This may be slightly off from a verbatim transcript, but it's pretty darn close.)
I love this site esp the inventory report and lowball. I've been looking in Middlesex County (Woodbridge, Edison,Carteret areas.) and Rahway/Linden in Union County. There currently seems to be alot of inventory in the 319-359 range. I'm looking to stay below 280.
Great work grim,
I read your blog religiously.I like RE statistics and economic viewpoints. I also live your lowball and price reduction weekly articles.
i would like to see more articles on Manhattan RE market. A lot of ppl live in NNJ are former Manhattan residents who work in the city. They moved out here because they could't afford decent space in Manhattan. I suspect Manhattan RE prices drive NNJ towns with good school and easy commute to Manhattan.
We are renting in Summit. We would like to buy a house along Midtown direct line with good school system in the next few years. We particularily interested in Summit and Chatham. We want to spend around 500k for a "move in" condition 3bed2bath starter home.
Bubble bursting conviction...hummm...I guess 20-25 % reduction from current price level in 18 months. Although I believe fair RE prices are 40-50% reducted from current price.
I'd love more info on 2-3 unit homes in Hudson County, particularly Jersey City near the Journal Square PATH station!
I am 26, still living with my parents, and have been able to accumulate substantial savings.
A 2 or 3 family home is more desirable as the rent income can offset a chunk of the expenses.
6 years ago, one could purchase a multi family home and rent all the units to cover all of the expenses of the house. Sadly, this doesn't seem to be possible in today's market as the average rental rates have not gone up in proportion to home asking prices.
This blog has prevented many people from making huge financial mistakes. Thank you for your work!
My ultimate goal is being able to retire young while living off of the rental income of several smart real estate purchases. I definately do not want to have to rely on a dual income just to make ends meat!
--ChrisXS
Grim,
This is a fantastic board. The price of houses have gone beyond our incomes. How are people buying these over priced houses?
Can you show what a house sold for 5-8 years ago?
Just to show the extreme increases that have occurred in such a short period of time.
Thanks and keep up the good work.
Great work and great blog, Grim
Looking in Bergen, Passaic, parts of western Essex and eastern Morris county in the 650+/- range. Trying to stay patient but family needs may compel us to buy in the coming months.
In my opinion the best info is the data - especially inventory figures. Price info is good too.
On a purely selfish note, I'd like to have some insight on when a seller might be open to accepting a lowball offer - would you have access to a "Days On Market" counter or something like that? to go along with Price Reductions?
(Alternatively, we could solicit smarmy agents to betray their clients' confidence anonymously on the blog - I visited one property in Passaic this weekend where the agent was practically begging us to offer 600k for a 900k mansion (debatably whether it was a mansion, but it was among other $1MM homes) I say this kind of as a joke but it is amazing to me how freely agents will expose the negotiating position of their clients.)
Hi Grim
This is absolutely the best (and only?) site for NNJ RE info. It is an addiction for me as well. You and everyone here has saved me from rushing into something just to get my kids into school by September. I would love to see more links to good websites on the right side of the page and I would like to see the comments numbered so I know where I left off
I am looking in Northern Bergen County, Wyckoff, Ridgewood, Allendale, Ramsey and Hillsdale. I've chosen these towns for the school systems. We don't want to pay more than $550 but unfortunately you get such a POS for that amount.
I will be convinced the bubble burst when houses in Allendale start to come down and have price reductions on the listings. Most of the houses, if they are decent and on quiet streets, sell pretty quickly.
I've been around here a minute, enjoy it almost every other day. Basically looking for something in the 240-260 range in Somerset county, hillsborough or franklin. I've put bids on places, but never went past a counter offer because I am not getting into a pricewar for overpriced housing. Keep up the good work. Octavio
Grim, this is great, keep up the good work. I think a great enhancement to this site would be some type of forum listing so that WE can create topics to solicit feedback on specific issues.
Anonymous (9:59AM) said:
I am looking in Northern Bergen County, Wyckoff, Ridgewood, Allendale, Ramsey and Hillsdale.
You might also consider Oakland and Wayne - both have good school systems and aren't much farther from the city if you're looking in Wyckoff already, and prices tend to be a bit lower (in Oakland, in part, because many homes are on a septic system)
Keep up the good work, Grim
Grim,
I think that the strength of your blog comes from the sum of its parts. Lowball and Price Reduced provide the factual basis for the editorial side while overall you compile for us the "other" side of the story that the major media outlets and papers so frequently miss.
It was because of your blog that we felt that we could lowball an offer on our house - which as you know worked quite well as our lowball was accepted.
Keep up the good work!
I'm going to attempt to include Hunterdon and Middlesex to the Lowball! and Price Reduced! features.
I'm not going to add these counties to the weekly inventory update, simply because I do not have historic data for these counties. Instead, I'm going to refer readers to the Otteau reports for these counties, 2005 Q4 data can be found at the Otteau group website.
Middlesex
Hunterdon
grim
Michelle,
Tells us a little about your lowball bid.
Thank you
Anon 11:26
Love Oakland, but taxes are outrageous considering you have septic. Schools aren't good enough to warrant those taxes.!
"Brokers like Nancy Cook of town & Country Realty in Chatham Lie and overhype things to get listings. Then houses sit. Nancy has confided to my wife, during a discussion at our country club, that its all about the image realtors portray. She says the key is to keep buyers "on the hook" and tell them prices may be dropping in other towns but they continue to rise in Chatham. She also will say that things continue to go up, only now its single digit increases. things are way out of control in Chatham and these realtors are no more than glorified stock brokers and car salesmen."
To anonymous: I am a realtor in the Chatham/Summit/Madison area and I am sorry to read your comments re: the realtors in the area. Although I do not agree with some of Nancy's comments I do agree that there will be single digit increases in the area. And it for the same reasons that you brought your home in Chatham - Midtown Direct, great schools, great area. People clamor to get in this area because of this and you have A LOT of people in the town who do not want to leave town but know they can sell at top dollar (which most of the time they do) and move to the McMansions in the Rolling Hill section of town because they have gained so much equity in their home from the past couple of years. I don't think it is necessarily overhype because the numbers don't lie. This area is now on the map so people are going to continue to pay top dollar for the best.
Please know there are some realtors that do enjoy reading this blog for another perspective and provide this info to our clients - - there are some of us out there. :)
Dear Realtor from Chatham,
Do you really think the homes in Chatham today are worth 100% more than they were 4 years ago?
Was Chatham not nice 4 years ago?
We are in a speculative real estate bubble -- which has begun to burst.
"i really don't see what all the hype is about in places like chatham. ... i looked there for a while and after mingling with the locals i said thanks but no thanks."
I'm in Chatham often and never sensed a 'snotty vibe' -- has this happened more than once?
Chatham is filled with lower-priced homes, so I don't see where you're coming from.
It's a nice town, but the high prices come mainly from the school system, it seems to me.
Hi Grim,
Really great site; I too am addicted and visit often. For a number of years I've been pretty focused on the Jersey City (downtown) market; bought a condo here and then sold in August 2005 and am renting 2 blocks away.
Would be interested in any JC info, particularly as there are a massive amount of new developments underway and on the books- literally thousands of condo units coming online in the next 1-2 years.
I'd ultimately like to buy a bigger place (than my recent condo) but am sitting it out until I see some real evidence of a bottom- still quite a way off, I think. What did it for me was watching my mortgage lender, Countrywide, get steadily more and more aggressive in offering financing to anyone with a pulse. When I saw the negative amortization, no doc, no down payment interest only ARMs, I said time to bail. I saw friends buy 2 bdrms for $480k, sell 1.5 yrs later for $700k. I don't kid myself... no reason it couldn't drop back down there again.
This is site is great- keep it up, and thank you!!
Steve
This site is a breath of fresh air for those of us who have suffered through this ridiculous NJ real estate bubble. I've lived in Montclair for 11 years and have tried to buy a condo here several times. Each time I have been outbid, including the last time when I offered $52,000 over asking price and still lost the place! The real estate agents in this town are crooked and devious, and I have despaired of ever getting the truth or anything close to it from them. I'm going to enjoy watching the prices fall, and hope to snag a decent place one of these days for around $300,000.
I would appreciate some longer term perspective in terms of numbers. With the bubble numbers, its hard to get the right perspective.
So Phoenix goes from 3000 to 38,000 houses. What does that mean? If you look over the last 20 years, has the average been 5000 or 50,000?
Some longer term data would bev very helpful.
Simmssays...americaninventorspot.com
"Michelle,
Tells us a little about your lowball bid.
Thank you
2:24 PM"
In a nutshell, we fell in love with a house that we desperatly wanted, but nonetheless we offered 25% below the originial listing price. We negotiated with the seller and while we mainly focused on how much we love the house, we also spoke a bit about the market softening using some of Grim's info. We agreed on a price that was 20% lower than asking (and feel like we got a great price).
Incidentally, we presented our offer ourselves to the sellers in person, verbally, not in writing. And we didn't use a buyers agent - we just used their agent to help us close the transaction.
This isn't the first time someone has suggested using dual disclosure to handle a lowball transaction.
grim
I would like to see information on homes in Bergen County. I am particulary interested in Paramus and Mahwah. I am hoping for prices to go around 300 to 350k for a 3br. I don't know if they would ever go down that low again. I do enjoy the Price Reduced and Lowball features.
Michelle,
i like that personal touch to negotiation.
We got a great deal?
Based on what criteria? Besides loving the house.
What did the house sell for in last sale? What were comparable sales in neighborhood 5 years ago?
How did your sales price compare to zillow valuation?
Just curious?
Any thoughts around Robbinsville and Allentown/Cream Ridge (I know, its not exactly NNJ), but thoughts appreciated
Michelle,
I'm curious as to how you got to the owners personally... how did you get past the agent's gate?
We got a great deal?
Based on what criteria? Besides loving the house.
What did the house sell for in last sale? What were comparable sales in neighborhood 5 years ago?
How did your sales price compare to zillow valuation?
There's no previous sale, our sellers built it themselves in 1958. Zillow had put us around $1.2, we bought for under a million. We appraised above purchase, and our insurance company won't allow us to carry replacement only coverage for under $1.2M. My purchase has been discussed in some other threads so I don't want to waste Grim's space here, but basically we bought to stay here for a long time, and just because I think it's a good deal doesn't mean that it won't still decline in value when the market does - I just think the price we paid has already taken into account some of the forthcoming decline.
As far as personally presenting our offer to the sellers, I first called the listing agent to show the house to us. I then called her back and said that we wanted to make an offer but that it had to be in person, to her and the sellers (she was there when we presented). I told her that we weren't working with an agent, and that we would use her as our buyers agent (double commission for her) so she was happy to let us take a crack at making an offer. She had nothing to lose and lots to gain. We negotiated the contract and had everything in writing that night before we left.
I don't think it's the right strategy for everyone, but it was for us.
"So Phoenix goes from 3000 to 38,000 houses [on the market in 12 months]. What does that mean?"
It means people have stopped buying in the last 12 months.
It means the flippers and speculators are bailing out fast.
It means the tide has turned.
"Incidentally, we presented our offer ourselves to the sellers in person, verbally, not in writing. And we didn't use a buyers agent - we just used their agent to help us close the transaction."
How did the agent react when you bypassed them, and cut your own deal? Not kindly, I'd imagine.
"As far as personally presenting our offer to the sellers, I first called the listing agent to show the house to us. I then called her back and said that we wanted to make an offer but that it had to be in person, to her and the sellers (she was there when we presented)."
Very interesting.
How did that work out in practice, was the meeting business-like? Did it get heated? ("25% below asking, are you nuts, get out of my house!" Etc.)
Was the agent reasonably helpful to your needs during the closing process, etc, since they were a "dual agent"?
How did the agent react when you bypassed them, and cut your own deal? Not kindly, I'd imagine.
We didn't "bypass" anyone. We didn't HAVE a buyers agent. I found the house on gsmls.com and called the listing agent to see it. The listing agent was present when we gave our offer. Their She then helped us close the deal (basically just recommended inspectors and stuff). She got both the buyer's AND listing agent's commissions, for much less than double the work.
How did that work out in practice, was the meeting business-like? Did it get heated? ("25% below asking, are you nuts, get out of my house!" Etc.)
It sure could have been like that! We were nervous as hell going into it, and it could have been ugly, but it wasn't. We told the listing agent before the meeting that we would not be bringing a full price offer, but didn't say how much. We needed a drink to steel our nerves before the meeting!
Was the agent reasonably helpful to your needs during the closing process, etc, since they were a "dual agent"?
She was OK, however I should say that I was very involved and didn't expect or want the agent to do much for me but tell me what the process and rules were in NJ. I don't think the agent is very useful anyway once the house is in contract unless you plan on nickling and diming after the inspection (we said during our offer than only major problems, if any, would need to be dealt with if they were found, and promised that we would not be niggling over knicks and scratches after inspection).
There are downsides to dual agency, as the agent's fiduciary responsibility is to the seller. But I think that if you're really involved in every step of the process and feel comfortable making your own decisions then it's fine. Frankly even if I had a buyer's agent and I asked them "what do you think I should do?" I wouldn't necessarily abide by their answer anyway.
This was our second dual agency purchase as sellers and I think we benefitted both times. We did NOT let our listing agent represent an interested buyer when we were selling our house though - I think the benefit lies mainly in the buyer's camp.
"The listing agent was present when we gave our offer. Their She then helped us close the deal (basically just recommended inspectors and stuff)."
Surprised she let you present to the sellers directly. Was she reluctant to do this?
Great story, though.
While she mentioned it normally "wasn't done", she wasn't reluctant after we told her she would get double commission if the offer was accepted!!!
Grim, Info on northern jersey - from montclair, out to the more rural areas of sussex county is very helpful. We will be buying in the next couple of years. Our price range is probably 300,000-450,000. Although, of course, the less money the better.
Great job on the blog, and thanks for asking for our feedback.
Zillow had put us around $1.2, we bought for under a million.
Zillow ? Did that exist when you made the bid ? I thought it only came on last month.
our insurance company won't allow us to carry replacement only coverage for under $1.2M.
General comment -- replacement only coverage (guaranteed) is very often higher than market value for older houses (even excluding land). THe cost of building a house almost always goes up, but the market value fluctuates. Still its a good idea to get replacement only insurance rather than market value.
Zillow came online after we were already in contract. I had checked our value out the day after someone mentioned it on here.
I have a friend whose significant other has access to a real estate appraisal database and I asked her to pull comps, tax maps, assessed values, and a listing of all recently sold homes in the neighborhood, which she did. I used this info to help determine the value of the home as well. I haven't unpacked all my notes so I can't state the numbers but the price per square foot was pretty low compared to the comps.
Thanks for the info on the insurance. I was completely confused at that stuff as I'd never even heard of the replacement value option.
Michelle: Really asking nicely here. Please stop posting about your recent purchase. This is a great blog and you are ruining it. Seriously, really starting to feel bad for you. Begging you here. Thanks.
I really enjoy this blog and check it obsessively. I have read news articles about other local areas, and they will have statistics on how many people have gotten interest only loans or financed 100% of the purchase price. Have you ever seen any information like this for northern new jersey?
Dude, people asked me questions and I answered them. Chill out.
"Dude, people asked me questions and I answered them. Chill out."
Have to agree, it's a free country.
Grim,
I've been reading your blog since last November and as others have said here already, I think I'm addicted! I'm a newbie to financial markets. I've only recently taken an interest in how they work, especially the real estate market. I find this blog and the postings of many of the other participants extremely valuable. I feel that I am learning a great deal by spending time here. I'm grateful that you dedicate your valuable time to this site---it's a valuable community service.
I am interested in the Rutherford area, particularly the coop/condo market.
I'm enjoying the Lowball and Price Reduced. Houses in my neck of the woods seem to be hanging their "for sale" signs for at least 3 months. But they are refusing to reduce their asking price. To me, a realization that the bubble has burst is being able to get a mortgage for less than $1500/mo for a 2 bedroom house.
We bought a house last December and before doing so I came here a lot. I liked all the statistics. And since you asked for some specifics here they are: Bought a 3BDR, 1 1/2 half bath Splitlevel in Wayne, Passaic County. Asking Price $499000. We bought for $ 485000, 10% downpayment. Don't remember the MLS. It took us over a year to find something suitable and I wished we could have bought earlier. We are now very happy first time homeowners.
Great work Grim :)
Can you give me some data about Dumont, Bergen county?
This place has good schools as well as descent priced houses compared to neighbouring towns like Creeskill, River Edge, Tenafly etc
You have a very intersting blog. Team Member's Forum
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