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Thursday, October 7, 2010
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37 comments:
VA_Investor and Harriet, you had asked me to keep you posted on FX7390907 we discussed previously (7/18/10).
Harriet said...
I think there's a good chance it will fetch $750K, though, as long as there aren't serious mechanical issues.
VA_Investor said...
Keep us posted. Looks like a fair price to me.
It dropped to 725k over a month ago and still no contract. 83 dom and counting. I don't think the market will get better over the winter either. They paid 670k in 2007, I don't know why they'd think the house is worth more than that today.
After reading the remarks I'm guessing their kitchen remodel is why they think they can get 55k over what they paid. Judging by the 2007 listing photos they definitely didn't do anywhere near 55k of work. New countertops and refinished existing cabinets is all I see.
Jeremy,
I share the sentiment you expressed in your last sentence.
They claim the cabinets are "new." Are they new or are they just refinished?
Another sign that they are clueless is that they consider power-washing the deck a capital improvement worth mentioning in the short amount of space available in the description. Even I, who is probably more sympathetic than anyone else here with the cost of renovations and how they can increase value, consider that maintenance, even if the deck was a moldy mess before. If that is among their top "investments" in the house, then they haven't made many costly changes.
I don't know the Oakton market, but obviously you're right that it hasn't moved up the way these sellers hoped it had.
"...your last sentence", of your first post, that is.
I'm kind of curious as to what you would think of a house that was priced according to recent solds and actives but was a previuos short sale where they bought at a substantial savings..would you consider the house over priced because they bought a SS even tho its a deal with current market?
Arkey I know what you're getting at and I agree that any home should be based on its present value - not what the previous owner paid. In this case though I think this home is not as nice as any of the nearby solds. The lot is located on a weird pipe stem and the solds aren't, and this house just doesn't have the same curb appeal from the outside as the nearby solds. I think they are overpriced (regardless of what the previous owner paid) and I think the price drop and 83 DOM bear that out.
I was just curious what could give the seller the idea that this house was worth so much more than they paid since they priced it initially 80k over what they paid in 2007. Do they really think they got that good of a deal in '07, or do they think the minor kitchen sprucing up is worth all that money?
Ok, gotcha..I'm not in the least familiar with that market but I do remember 07 as being foreclosure packed with them hitting and killing the market in 08 in PWC. We sold a ton of 07 forclosures in PWC in 08...literally thousands a month.
I wish '07 had been foreclosure packed in Oakton. I don't think I'd have nearly as many saved listings with 100+ DOM if there had been a lot of fire sales back in 2008 to show a bit of reality to today's sellers. It is very frustrating knowing a home will sell for much less, but not being able to bid on it until the seller has had time to realize that too.
Yeah, a quick search on frankly reveals few foreclosures in that price range in Oakton over the past few years.
Here's a prettier (IMHO), but smaller, Oakton house that sold recently for $710K.
Miller Heights
jeremy,
It all boils down to whether you have motivated/distressed seller's.
You can't arm-twist someone to sell if they don't have a need to. Maybe prices will drop overall in Oakton. I seriously doubt people will run for the gates if they don't have to.
Ace..it looks like it is priced according to sales..but..Jermeny says the lot sucks. If you take what they paid and plus realtor fees their price doesn't sound so unreasonable to me.
Arkey, I can understand why they want to get what they paid plus Realtor fees, but they bought nearer the top of the market, and the market has declined since then in that neighborhood (take a look at the decline in the assessed values).
So my guess would be that Jeremy will be able to find another house that is priced more in keeping with the current market, where the seller is able/willing to sell at today's values.
How about this (ugly) house?
Bank forecloses in the $800s; Arlington's assessed value is around $860K; Zillow says it's worth close to $900K. But the bank decided to ask $1.1 million. Huh? That's on the high end of houses of comparable size that have been updated with excellent taste and quality, with nice yards.
Maybe it has a spectacular interior (no photos are provided), but without seeing the photos, I think Zillow's probably pretty close on this one.
Albemarle
Fair enough Ace but this house was assessed at $807,330 in 07 and is currently listed for 10% over 2010 assessment which I think with the history provided here of limited foreclosures that it is reasonable.
I'm not arguing that I would pay that for this. I happen to agree that its over priced for ME but maybe not that area or buyers interested in that area.
Arkey said...
If you take what they paid and plus realtor fees their price doesn't sound so unreasonable to me.
Now if buyers aren't allowed to look at what the seller paid when making valuations - then why should a seller be allowed to tack on realtor fees when it comes time to sell? By that logic, a house would go up 6% every year if it was resold every year.
Didn't we conclude that what a seller paid and spent on improvements is irrelevant to FMV?
Back in the 80's, we looked at a dog of a house. When I asked the seller how he arrived at the asking price, he listed every cent he had ever spent (on god-awful crap). People actually think this way. Some here reverse it and believe that they should get the same "bargain" the seller did. This, too, is ridiculous.
I just got a CMA/appraisal on a property I bought in 2005. It's a 300% increase. Do you think I care if someone tells me "prices" have dropped?
VA_Investor,
Can you explain why there was a 300% increase in a price of property you bought in 2005? I do not believe that it is possible, seriously.
I would believe something like that happening to an abated/gutted $20k property in the inner city, in the area that was later on gentrified. Without that --- no way.
Arkey, I think that the main thing is, as Jeremy posted, the house has been for sale for 83 days and hasn't sold at the asking price, so in today's market, it's not worth that amount to other buyers either.
The assessments are time-lagged so it's hard to know exactly what's happening, but if you look at the 2007-2010 time period, they have gone down a lot, and it's possible that they were still declining since the last assessment. I think his point, and I agree with him, is that given that values have gone down in that market since 2007, it's hard to understand why the seller would think his house has actually gone UP in the same market, especially, when it hasn't sold in all this time.
Kostantin,
You make my point. It takes alot of time, effort, quick action, risk and guts to get those type of deals.
If you've done your homework, there really isn't much risk. Many here have been looking for quite some time - but still want a bunch of contingencies (not willing to take a risk).
Still other's require a "sure thing". Sure things don't make you $$$. It's one or the other.
The majority here claim that a home is not an investment and then chart stuff like a stock broker.
Interesting WaPo article on Reston-based "MERS":
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/07/AR2010100702742_pf.html
Va_investor said: "When I asked the seller how he arrived at the asking price..."
This. Has to be one of the best questions to start any negotiation with.
VA investor,
IRS tax records of AGI do not measure wealth, it just measures income. Everything invested in the stock market, or real estate, or savings, is not reflected in the IRS tax data. So to say that 1 percent of the population that paid taxes had an AGI of 350K or more is not a true measure of wealth. I am surprised you do not know that.
Thanks, my two cents
You have it right from the discussion in the previous thread. People are not thinking through what I wrote and immediatedly take it as a rich versus poor fight, when my comments are far from it.
Yes, very wealthy people got there with a lot of good luck on their side. They should feel blessed that they have been able to attain that wealth. And if fact, they can AFFORD to pay more taxes so others who were less blessed have a chance to attain an education, which is the key to earning a decent living.
It is funny, I read an article recently that banks were warning executives about wealthy people wanting all the services, but did not want to pay for these services. It appears the wealthier people get, the more they want to hold to everything they have and the more stingy they are to even pay for what they should.
Going back to my orignal post, without an education, if you read my post correctly, you will have a very hard time affording things such as a home in your lifetime.
No one should say people have no right to buy a house. Who are you to judge? Everyone has a right to fulfill their dreams, and if that is to buy a house so be it. I am not saying people should be given houses, but people should have a right to the right conditions so they can all have a shot at a college education, a decent salary, and yes eventually buy a home. Since buying a home is a key also to ensuring you do not have to work until you drop dead.
The problem with society is that people are extremely self-centric. They do not realize that whatever blesssings they have received, many have been just being in the right place at the right time. Not because someone made it and is wealthy means everyone will have the same opportunities, and above all good luck. (Statistics prove this point.)
I also mentioned IQ in my post. If you were born with an average IQ to no fault of your own, chances are you are not going to be very wealthy, particularly if you could not afford to go to college.
Perhaps by stating the opposite people will start getting it: There are a lot of people who work very hard all their lives but are not able to buy a home in their lifetime and die in abosulte poverty. Do you understand this now? Where is your moral compass?
Thanks for the update, Jeremy.
Price drop!! Hurry!!!
I can't recall who toured this house and said it was a dog. The sellers have dropped the price $100. I guess some Realtors have no pride.
Taft St
trickydonut: Good question for the seller and an equally good question for the buyer is "how did you arrive at the offering price."
dc2: agree with you about wealthy people but still think some people who become very wealthy are not stingy. My wife says we are not wealthy but "advanced comfortable." As we became more financially comfortable, we followed the philosophy "to whom much is given, much is expected" and tried to help people. I counseled people who got into trouble with the bad mortgages and have paid many a security deposit so that people could start over in a rental.
Ace: I did not comment on that house on Taft St but when someone did, it piqued my curiosity and I drove over to have a look at it. I only saw the outside but it looked pretty ordinary. The park across the street is nice but the house faces the parking lot and there were cab drivers there doing their morning prayers. Nothing wrong with that but it wasn't really the parkland view the listing mentioned. You have to walk past several neighboring houses to see the parkland overlooking the GW Pkwy.
Thanks, Reecon, it really seems to be a ridiculous price for a small, undistinguished house.
VA_Investor,
I know that sometimes people get abnormal returns for their investments, but in general it requires taking abnormal amount of risk. Otherwise it will look a little bit like arbitrage to me. Winning deals like one you mention means lack of competition --- which is a little bit strange.
As far as people on this board go --- they do not seem to be interested in transitional neighborhoods, thus not much possible upside for their purchases and some caution naturally required when you deal with houses in 600-800k segment.
Ace,
This Taft house is great! Just look at these beautiful window A/C units! It is a bargain at 925k!
K,
The purchase price was over 800K. Pulling the trigger immediately (because I had been watching and waiting for this type of situation for a number of years) and, due to a lot of work and effort over the years, being able to pay cash produced this result.
Luck had nothing to do with it. The property was out there (on the MLS) for others to see. They took a few days, and that was a few days too many.
There have been many that have "gotten away" and I try not to kick myself. We bought our first house at 22 and had 10 by 30. Clearly, we have little in common with most folks here. I'm a risk-taker (but an educated one) and in the early days I used to think "what's the worst that could happen?". Bankruptcy? OK, I'll deal with it - not that I ever thought that the "worst" would happen.
VA_Investor,
So you say that you bought a property for more than 800k in 2005and now it tripled in value?
Won't believe it unless I see it.
K,
I am not giving out an address or my recent appraisal. I don't really care if you believe it or not. I've got many others that you wouldn't believe either.
VA_Investor,
May be you have them, or maybe not.
It is kinda rare situation for home prices to increase 3 times (or did you mean 4 times when you mentioned 300% increase?) in 5 years. I would say extremely rare. I would say one of the few periods when you could get such a deal (if not only) was 2000 to 2005. I've seen some multifamily properties changing hands for $1 million in 2000 and then being sold to some crazy developers in 2005 for 3 million (and this was absolutely highest appreciation possible).
But to experience such growth from 2005 to 2010 something really funny must have happened to the property and to the area where property was located. So funny that I would be very surprised to be so lucky to meet the happy owner.
I have to admit that you were able to show the area where prices grew a lot from 2008 to 2010 last time I asked for proof. I agree that you know local RE. But this 300% thing kinda bothers me from statistical prospective.
K,
What you miss, or fail to take into account, was that the property was worth 3X the listing price at the time I bought it.
I don't count on appreciation, I concentrate on underpriced property. I make my money going in. This has been my plan since I was 22.
Listing price 3 times below the fair value and no bidding war?
That's cool!
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