An Overpriced Home Can Be a Bargain
‘Stale’ properties may sell for less
San Francisco Chronicle -- Smart Moves
by
Ellen James Martin
Picture this: an elegant Mediterranean-style
residence with ornate French doors and corwn
moldings from the ‘30s, yet a beautifully
updated kitchen. And all this in a coveted
neighborhood with good schools.
That doesn’t sound like a place that would
languish unsold for more than three months in a
decent market.
But that’s exactly what
happened until a computer engineer bought the
house for a song.
Why did the classic residence go begging?
Because the seller priced it $30,000 over
market value, which ultimately meant letting it
go to the engineer for $7,000 less than it was
truly worth, recalls Bobbie Kostos, the
Coldwell Banker agenbt engaged by the
computer specialist.
While most buyers refused to consider the
house – the computer engineer persisted. And
after four contract volleys, he caught the home
he desired at a very favorable price.
“If you absolutely love a home, you should go
for it, even if it seems overpriced,” Kostos says.
Why are bargains to be found among shopworn
houses? Because of a strange irony: that the
greedy homeowner is usually humbled into
selling for less tan he might otherwise get.
“If a seller comes in 15 percent over the
market, he eliminates 90 percent of the buyers,”
says Bob Todd of the Re/Max real estate chain.
How can you get a terrific deal on an
overpriced house?
► Look for houses that have gone “stale.”
What’s a stale property? Market conditions
vary wildely from one neighborhood to
another. But in most cases, a house that goes
unsold for two to six months is stale, meaning
it’s not longer getting attention or offers, says
Ray Ugone, an agent for Prudential Realty.
The very fact that a home has long been on the
market raises suspicions among most buyers.
But the wise buyer knows that price alone is
probably the problem.
► Don’t set too low a price limit. Since so
few do it, shopping above your true price limit,
be perhaps 10 percent to 15 percent, could be
worthwhile, says Kostos of Coldwell Banker.
That’s the realm where you may find an
extraordinary deal on a stale home, she notes.
If you’re dealing with someone in the first
group, why not continue to reply to good-faith
offers? Kostos asks.
► Forget the seller who moves in and out of
the market. A minority of sellers continue to
hold out for too high a price, even though their
houses go begging on the market. Perhaps it’s
pride of ownership. Or perhaps they’ve poured
more money into the property than they can
reasonably expect to recover.
► Be ready to act when the time is right.
Getting a terrific deal on an overpriced house
doesn’t alwas require patient bargaining.
Sometimes the owner of a stale property
suddenly recognizes he’s charging too much
and offers a steep discount.
Sellers who move in and out of the market,
changing agents often, are not truly motivated
to sell, Kostos says.
When that happens, it’s time to act decisively,
says Todd. “You can’t lie back and wait,” he
counsels.
Stubborn sellers are not the ones with whom
you want to bargain, she says, “because they
never come around.”
Universal Press Syndicate
► Have your agent go in person to present
your first offer.
Fax machines are a
convenient way to transmit offers. But sellers
who think their houses are worth more than
they trule are need a more personal touch,
according to Ugone of Prudential.
If you’re coming in with an offer well below
the seller’s asking price, the danger is that you
will so offend the seller that he’ll sever all
discussions. Bt you can often avoid hurt
feelings by asking your agent to present your
first offer with the warmth and personal visit
which, ideally, also involves the homeowner.
Make sure your offer is accompanied by
information on the sale prices of like homes, to
focus the discussion on reason rather than
emotion.
“If you offend the seller, you can kiss that deal
goodbye,” Kostos says.
► Show tenacity with an owner willing to
move down in price. Ugone says the owners
of overpriced homes fall into two categories:
those wiling to move down in major increments
and those only willing to inch their way down.