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FSBO to Listed

 
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AgentGrn



Joined: 28 Sep 2006
Posts: 82

PostPosted: Fri Oct 26, 2007 5:22 pm GMT    Post subject: FSBO to Listed Reply with quote

Crew,

My wife has had an eye on a house for a while now. She's pointed it out to me several times for the past 6 months when we've driven by. The address in Zillow is:

http://www.zillow.com/HomeDetails.htm?zprop=57609671

At first, there was a huge FSBO sign outside ... for something along the lines of 6 months. Now it's listed for 244,900. Given the Zestimate, it's not too bad. A closer look on ZipRealty shows that it's clearly in move-in condition ... and at my wife's suggestion, we stopped and snooped around outside and looked in where we could.

However, what concerns me is looking at the prior sale history:

10/05/2006: $202,000
07/23/2004: $155,000

Apart from someone who watched just a little too much "Flip This House", what does the crowd here think about why the prior sale prices are so far below the given estimate? I know that Zestimates aren't the best measure, but they seem to be somewhat close. There is some feel of dysfunction about it that I can't place.

It seems to be a nice place, but I'd really rather build up a larger down-payment arsenal and I expect that the price will reduce after some time since a number of other homes in the area are at or below that price and the summer is now behind us. We've also got no real pressure to buy outside of our 1 year old who continues to grow like a weed.

Thanks for your thoughts!
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Fri Oct 26, 2007 5:51 pm GMT    Post subject: Reply with quote

They may have padded the price so that they had room to negotiate for starters.

Second, if they bought full amount $202k ONE YEAR AGO, either they are upside down very quickly, or there is a relocation, a divorce or they are out there fishing and like something else better. Hell, they didn't last 6 months right (it's been on the market for 6 months....) This is bizarre.

Third, if they bought for $202k and they need to sell and PAY THE TRANSACTION COSTS, they need to recoop the $202k plus the realtor/transaction fees of say $12 to $15k so they are at $217 to not come to the table and pay. If they are greedy, they want another $15k out of it to use as a down payment for their next transaction. A $245k asking price aligns with the $15k of down payment they want, $15k of transaction costs they lose and a little bit of wiggle room in the negotiations.

Look for any indications as to the basis of why they might be moving.

Lastly, make your own footprint, don't worry about the other guy's scenario once you've got an educated guess formulated. The truth is, if you see a healthy consumption of properties in that area at that price point during this down market, that should make you feel better. If the market has gone down a certain percent for that price point, actually deduct it from the $202k.

This might not be a good seller to deal with beause they need a certain amount to make the deal work. You want someone who paid $120k for that place, they might take your $180k offer...
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Mike



Joined: 01 Nov 2006
Posts: 28

PostPosted: Fri Oct 26, 2007 5:55 pm GMT    Post subject: Reply with quote

Here's my take. Worcester County was VERY cheap earlier this decade and appreciation didn't start picking until after Boston and the inner suburbs starting increasing in value. It also started declining before any the inner suburbs. So in general, it had very rapid appreciation for a short amount of time. That might explain the sales history.

As for the house and town itself -- do you think you'll be staying in Leicester for the next 10 years? Sure it's schools are better than Worcester, but they're still mediocre compared to the typical MA town. It's an economically depressed region which might not see price appreciation in a long time. The only reason they saw any appreciation to begin with is due to a somewhat tolerable commute into the Boston area, which priced out many young families. I think Grafton, Shrewsbury or anything East of Worcester would be better bets, unless there's something that is really drawing you to Leicester.
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Fri Oct 26, 2007 6:08 pm GMT    Post subject: Reply with quote

I wouldn't trust the ZEstimate very much. The estimate on my place went has gone from $404k to $294k back up $377k all within the last year.
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AgentGrn



Joined: 28 Sep 2006
Posts: 82

PostPosted: Fri Oct 26, 2007 11:58 pm GMT    Post subject: Reply with quote

The draw to Leicester is because that's where I'm from ... my folks still live there, and that would allow my son to go over to his grandparents' place after school once he gets that far. I work in Worcester and like the location on the east side.

The other place we're looking at is Sutton, where she's from ... but the "New Sutton" as we call it, is loaded with yuppie transplants and McMansions. The frightening part is that the New vs. Old is really a pretty solid demarcation.

East of Worcester is still a bit more expensive than I'm interested in ... but that could change in the next couple of years.

Here's a thought that just crossed my mind. I can't remember the site that I crossed this first at, but it explained a major metro price rise like a wave that rides out from a major urban center (like Boston), out to the suburbs. For example, the late, but rapid appreciation. As things cool off in the metro area, it creates a sort of vacuum so people move back towards it, eventually depressing the prices along the outskirts .. at least until the next big cycle moves along.
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Mike



Joined: 01 Nov 2006
Posts: 28

PostPosted: Wed Nov 07, 2007 6:28 pm GMT    Post subject: Reply with quote

AgentGrn wrote:
The draw to Leicester is because that's where I'm from ... my folks still live there, and that would allow my son to go over to his grandparents' place after school once he gets that far. I work in Worcester and like the location on the east side.

The other place we're looking at is Sutton, where she's from ... but the "New Sutton" as we call it, is loaded with yuppie transplants and McMansions. The frightening part is that the New vs. Old is really a pretty solid demarcation.

East of Worcester is still a bit more expensive than I'm interested in ... but that could change in the next couple of years.

Here's a thought that just crossed my mind. I can't remember the site that I crossed this first at, but it explained a major metro price rise like a wave that rides out from a major urban center (like Boston), out to the suburbs. For example, the late, but rapid appreciation. As things cool off in the metro area, it creates a sort of vacuum so people move back towards it, eventually depressing the prices along the outskirts .. at least until the next big cycle moves along.


It's been a while since I've been on here. Family's a very big draw, I understand. I wish I had family in a cheaper area so I can just move near them. I believe you're referring to Eric Janszen's theory which is presented on his site www.itulip.com
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steverino
Guest





PostPosted: Thu Nov 08, 2007 3:48 am GMT    Post subject: First thing Reply with quote

check masslandrecords.com for the scoop on their current mortgage. Might tell you something.

Anyone who asks a price for a property in Massachusetts over what it sold for last year is on crack. So is anyone who buys it.
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Mike



Joined: 01 Nov 2006
Posts: 28

PostPosted: Thu Nov 08, 2007 4:11 pm GMT    Post subject: Reply with quote

Also, it wouldn't hurt to call the owner and ask for a tour. You guys can get to talking about the place and he might give away some info. Or you can just ask him straight up how he got the place so cheap last year. Maybe he bought the place as a fixer-upper and he put in all new finishings or electricals.
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