Low-Ball Offer???

[TheSheep]

Owners/Realtors - GROW UP!

Realtors- ask your Owners what is a true sale price subject to the major parameters in a Sale Contract.

Buyer Cash
Closing within x Days of Written Offer
Etc.


Owners: Give your Realtors the sale numbers; call them if things need to be modified.

That's it, verbal offers are tested by Realtors to make certain nothing has changed in te Owner's range of requirements.

 

[ClintClint]

Thanks again to all the inputs. From a buyer/consumer perspective, while Cork's view of equity may be definitional correct, the homeowner's gut feeling about their net worth and and equity is aligned with Fisher. I think that's why Buyers are expecting to buy property at at least 10% less than the asking price even if the asking price is very close to an appraised fair market value. Buyers aren't trying to get instant equity, they are trying to buy some protection from continued decreases in value and the instant "depreciation" they buy in the form of a future sales commission. I think that an almost instant way to clear the inventory of foreclosures would be to eliminate all capital gains tax on properties bought in foreclosures. What do you think?

 

[AAbsolute]

Thanks again to all the inputs. From a buyer/consumer perspective, while Cork's view of equity may be definitional correct, the homeowner's gut feeling about their net worth and and equity is aligned with Fisher. I think that's why Buyers are expecting to buy property at at least 10% less than the asking price even if the asking price is very close to an appraised fair market value. Buyers aren't trying to get instant equity, they are trying to buy some protection from continued decreases in value and the instant "depreciation" they buy in the form of a future sales commission. I think that an almost instant way to clear the inventory of foreclosures would be to eliminate all capital gains tax on properties bought in foreclosures. What do you think?

That would make those properties whose owners walk away from properties and let them go into foreclosure have a competitive advantage over people who keep their properties out of foreclosure. It would act as another shifting of burden, and when looked at closely, would give the lenders (who probably helped create this ) an advantage as well.

 

[TheSheep]

Kick your "agent" to the curb like the flaming fudgebag that they are and get yourself another--problem solved.

.

Another flaming fudgebag solves the problem? Hmm.

 

[TheSheep]

I've been thinking about your answer for a few while I was reading mail and posts. Isn't it instant equity if a person buys a home, there bank appraises it at 150,000 more than the purchase and someone offers to purchase it for 50,000 above their purchase price?

Is it only instant equity if you sell it to someone else? I'm not sure it would be called equity if you don't own it anymore. I think equity is when you own something and it is encumbered for less than it's worth. That difference is equity. I think what you were describing as equity is actually called profit.

What do you think?

The classical, financial definition of equity is difference between an assets booked value and its liabilities, it displays the interest of the asset owner in accounting terms. Equity can be + or -.

Profit (in home ownership) would include the investment cost of the Owner's $$ in the deal. What is he losing by having his $$$ in an illiquid asset. V.S. putting it in the bank at CD rates, for instance. From this assessment comes the use of the present and future values of money computed at a discount (interest) rate. Profit is also an accounting term with realization.

Equity is a booked value; profit is a realized value. Neither have anything much to do with "sheepables". Sheepables is what Ram can spend on hookers and plasma TVs.

:shock:

 

[Cork On the Ocean]

I think that an almost instant way to clear the inventory of foreclosures would be to eliminate all capital gains tax on properties bought in foreclosures. What do you think?

That would make those properties whose owners walk away from properties and let them go into foreclosure have a competitive advantage over people who keep their properties out of foreclosure. It would act as another shifting of burden, and when looked at closely, would give the lenders (who probably helped create this ) an advantage as well.

Yeah, I have to agree with AAbsolute here. While I am no fan of paying taxes and think its so sad that people who lose their homes get slammed by the IRS, I know of people that have no business asking for short sales trying to dump it back on the lender only because they can buy the same product much cheaper than what they owe. I'm talking about strong rental units that are not behind in payments. I actually had one client where the house is owned in the wife's name and they wanted to sell it as a short sale to the husband? I think that the forgiveness of capital gains on homestead property is the only way to go.

In Florida we have a hotline at the Florida Bar where homeowners can get free legal help to save their primary residence only. In case anyone needs it:

Florida Legal Services and the Florida Bar Association have partnered in establishing a toll-free hotline – (866) 607-2187 – that consumers can call. They’ll be asked a few initial questions about their situation to ensure accurate placement, and then be sent to a free attorney. The attorney will then negotiate with the lender on behalf of the client to keep the home from being foreclosed.

 

[30ashopper]

Well I don't have a crystal ball so I can't say if it's headed up or down and some areas are stronger than others. I've plotted the average sq ft price of sales in seacrest beach for the past 2 years and it appears that prices have stopped dropping and may be headed upward. We'll know a little better towards the end of the year but many people are watching this data very closely to buy before prices go up. I'm working on additional community trends and will continue to closely watch the market.

Seacrest Beach is a fascinating case study in all this. I've generated the same graph and have been watching the pp/sf there as well. 200-225 might be a floor, assuming the number of reo doesn't get any worse. There's about 2 years of inventory overhang in that community alone though and sales have tapered off. It'll come down to how long the current owners can tread water.

 

[AAbsolute]

I'm adding to Cork on the Ocean's post about the short sale bull. I know of at least 1 owner who can't pay his bills , but is trying to buy his own property out of short sale with a front man for a partner.

 

[scooterbug44]

Can you sic the law on him? Buttheads like that trying to work the system are part of the reason we're in this mess for a long time! :angry:

 

[Cork On the Ocean]

Seacrest Beach is a fascinating case study in all this. I've generated the same graph and have been watching the pp/sf there as well. 200-225 might be a floor, assuming the number of reo doesn't get any worse. There's about 2 years of inventory overhang in that community alone though and sales have tapered off. It'll come down to how long the current owners can tread water.

I feel the same. I'm thinking we may be at the floor too. I'm sure there will be some isolated cases still, especially since we're moving into the off season. I'm thinking if we can get through till February without another drop, that it will start inching up again. Who knows, maybe it's headed there now. It's just too early to tell. It will be interesting to chart other groups. I'm thinking beachfront condos, rosemary, watercolor. It will also be interesting to watch some condo complexes in PCB.

I'm adding to Cork on the Ocean's post about the short sale bull. I know of at least 1 owner who can't pay his bills , but is trying to buy his own property out of short sale with a front man for a partner.

Perhaps the solution is for lenders to adjust loan interest rates or something. It's the interest and late charges that are putting so many people into forclosure that might otherwise be able to hang on. I understand they're in business to make money but when lenders forclose, they not only lose their profit but often lose their investment so why not forget the greed right now, forgive interest for a year or so and let people that qualify pay only principal and escrow. I'm not a financial analyst but wouldn't this be a better scenario than billions in bad debts they've got right now?