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Anyone have insight regarding buying an estate sale?
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nicopico13
that year flew!
Member since 11/09 3008 total posts
Name:
Nicole
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Anyone have insight regarding buying an estate sale?
We've been house hunting for months now. Recently an estate sale popped up, from the pics it looks like it needs a ton of work, but the potential is there.. The asking price is high for what needs to be done to it. Is there room to negotiate or are estate sales pretty set?
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Posted 2/17/15 10:53 AM  |
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Prudential Douglas Elliman Real Estate
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jellybean78
:)
Member since 8/06 13103 total posts
Name:
Mommy
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Anyone have insight regarding buying an estate sale?
We are purchasing an estate sale and negotiated the price not by much though because the house was priced fair and was very well taken care of.
We were also considering another house which was also an estate sale. The house started at $399K then dropped to $349K. It needed a lot of work..A LOT like everything needed to be redone including sheet rock. We were planning on starting our offer at $300K and were only willing to go to $310K. The house has been on the market a few months though.
Do you have an agent? If not search Redfin for comps in the area. If it's an estate sale and priced fair than I wouldn't low ball. If it's priced high then I would start off with what you think you should offer based on the condition of the house. Good luck!
Message edited 2/17/2015 12:28:27 PM.
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| Posted 2/17/15 12:27 PM |
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nicopico13
that year flew!
Member since 11/09 3008 total posts
Name:
Nicole
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Re: Anyone have insight regarding buying an estate sale?
Thanks! We are working with an agent, trying to set up an appt to see it in person. There was only a few pics and from that I could tell it needs to be fully renovated. Im going to research the surrounding houses, it's a great location but doesn't warrant that asking price!
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| Posted 2/17/15 1:29 PM |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Anyone have insight regarding buying an estate sale?
We bought one. Do you have an agent? If so the agent should be able to pull comps for you. Ours needed work and it was priced basically for it.
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| Posted 2/17/15 1:37 PM |
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Re: Anyone have insight regarding buying an estate sale?
The process is no different for an estate sale than a regular sale. You can often get a good deal because the sellers (who are most often children or other close relatives of the deceased owner) don't want to have to pay the carrying costs of the house or pay for upkeep. So they often price it for a quick sale and are willing to negotiate.
On the downside, there may be deferred maintenance on the house of the owner was elderly or ill, and the sellers don't often know what was done when (age if roof, heating system, etc) or have all of the paperwork pertaining to the house that you would expect a sellers have.
Estate sale sellers often want to sell "as is," and will be less apt to agree to make repairs. But if course, everything is negotiable.
Also, estate sales can take a little longer if there are multiple people with ownership interest in the house. So I've had some where there are 4 children of the deceased owner and everything takes a little longer (negotiations, etc) because you are dealing with multiple parties who must agree.
As others have said, you can't assume there is a lot if room to negotiate just because the house needs work or it's an estate sale. It all depends on fair market value...what are comparable homes selling for in the area? If it's priced at $399K but "done" homes of the same size in the area are selling for $100K more, then the work is obviously accounted for in the price. Also, you may perceive that the house needs $50K of work to bring it to your cosmetic standards, but that clearly doesn't translate to assuming it's $50K overpriced. You really have to look at the market, with your agents help, and analyze comps to come up with a good offer strategy.
I know lower priced homes in a lot if great areas Re getting snatched up quickly (and you may be competing with investors who can pay all cash and close ASAP, which certainly would appeal to sellers of an estate sale).
Good luck!
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| Posted 2/17/15 1:54 PM |
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nicopico13
that year flew!
Member since 11/09 3008 total posts
Name:
Nicole
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Re: Anyone have insight regarding buying an estate sale?
that helps, thank you! I looked at the surrounding houses....its priced low for the area I suppose. Asking price is $399,990, the house next door has one more BR and zillow has it at $425, other homes are valued up in the 6's..... that said this home looks like it was original owners, wall to wall wallpaper, everything is dated. Is it wrong to offer a much lower price to factor in fulling gutting it? We will finally be able to actually see it in person next weekend so we can see if the big things like oil burner, cesspool etc needs to be replaced. I'm trying not to get my hopes up, but its in a great location and I can see the potential!
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| Posted 2/22/15 12:45 AM |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Re: Anyone have insight regarding buying an estate sale?
Posted by nicopico13
that helps, thank you! I looked at the surrounding houses....its priced low for the area I suppose. Asking price is $399,990, the house next door has one more BR and zillow has it at $425, other homes are valued up in the 6's..... that said this home looks like it was original owners, wall to wall wallpaper, everything is dated. Is it wrong to offer a much lower price to factor in fulling gutting it? We will finally be able to actually see it in person next weekend so we can see if the big things like oil burner, cesspool etc needs to be replaced. I'm trying not to get my hopes up, but its in a great location and I can see the potential!
You will most likely get and offer rejected for a much lower price. If the prices around it are in the 600's and they are similar size etc then this house is priced right. Cosmetics alone is not a reason for a low ball number IMO. And cosmetics is not a gut job.
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| Posted 2/22/15 8:26 AM |
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jellybean78
:)
Member since 8/06 13103 total posts
Name:
Mommy
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Re: Anyone have insight regarding buying an estate sale?
Posted by alli3131
Posted by nicopico13
that helps, thank you! I looked at the surrounding houses....its priced low for the area I suppose. Asking price is $399,990, the house next door has one more BR and zillow has it at $425, other homes are valued up in the 6's..... that said this home looks like it was original owners, wall to wall wallpaper, everything is dated. Is it wrong to offer a much lower price to factor in fulling gutting it? We will finally be able to actually see it in person next weekend so we can see if the big things like oil burner, cesspool etc needs to be replaced. I'm trying not to get my hopes up, but its in a great location and I can see the potential!
You will most likely get and offer rejected for a much lower price. If the prices around it are in the 600's and they are similar size etc then this house is priced right. Cosmetics alone is not a reason for a low ball number IMO. And cosmetics is not a gut job.
I agree. If it's already priced right for the area I wouldn't lowball. Remember when you do an inspection you can always try to negotiate the price if major issues arise during inspection although most houses are sold as is and an inspection is mostly an FYI of what needs to be fixed.
Most of the houses we looked at in our price range needed cosmetic work and the one we are buying needs cosmetic work but it's priced right for area so we didn't lowball.
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| Posted 2/22/15 9:12 AM |
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cets1290
LIF Adult
Member since 6/14 1051 total posts
Name:
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Anyone have insight regarding buying an estate sale?
we purchased from an estate and got the price down by like 20k- definitely negotiable- estates can be tricky around closing time, so don't be upset if he gets pushed back often... idk exactly what happened, but there was an open permit on the kitchen from the 60s that they needed to get sorted out, and the family was having issues. Ended up pushing us back close to 10 months. To us, it was worth it though. We haven't seen any homes in the last year listed anywhere near the price we got so I know it was worth it!
ETA: also bought from original owners. Things were outdated, but home was in great condition! I love that only one other family was here before us
Message edited 2/22/2015 9:19:19 AM.
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| Posted 2/22/15 9:13 AM |
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cets1290
LIF Adult
Member since 6/14 1051 total posts
Name:
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Re: Anyone have insight regarding buying an estate sale?
Posted by jellybean78
Posted by alli3131
Posted by nicopico13
that helps, thank you! I looked at the surrounding houses....its priced low for the area I suppose. Asking price is $399,990, the house next door has one more BR and zillow has it at $425, other homes are valued up in the 6's..... that said this home looks like it was original owners, wall to wall wallpaper, everything is dated. Is it wrong to offer a much lower price to factor in fulling gutting it? We will finally be able to actually see it in person next weekend so we can see if the big things like oil burner, cesspool etc needs to be replaced. I'm trying not to get my hopes up, but its in a great location and I can see the potential!
You will most likely get and offer rejected for a much lower price. If the prices around it are in the 600's and they are similar size etc then this house is priced right. Cosmetics alone is not a reason for a low ball number IMO. And cosmetics is not a gut job.
I agree. If it's already priced right for the area I wouldn't lowball. Remember when you do an inspection you can always try to negotiate the price if major issues arise during inspection although most houses are sold as is and an inspection is mostly an FYI of what needs to be fixed.
Most of the houses we looked at in our price range needed cosmetic work and the one we are buying needs cosmetic work but it's priced right for area so we didn't lowball.
I couldn't disagree more! Definitely lowball and stick to your guns. If the terms with your offer (down payment is high, good credit, no loans, etc.), they will pick you offer over a higher one with worse terms. They had like 4 all cash offers but we didn't up our price at all. Turns out, all 4 offers were contingent upon the sale of their previous homes, and the estate didn't want to rely on the fact that their home would sell for what they thought it would.
Worst case- you lowball and they negotiate up a little bit
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| Posted 2/22/15 9:16 AM |
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Re: Anyone have insight regarding buying an estate sale?
Posted by cets1290
Posted by jellybean78
Posted by alli3131
Posted by nicopico13
that helps, thank you! I looked at the surrounding houses....its priced low for the area I suppose. Asking price is $399,990, the house next door has one more BR and zillow has it at $425, other homes are valued up in the 6's..... that said this home looks like it was original owners, wall to wall wallpaper, everything is dated. Is it wrong to offer a much lower price to factor in fulling gutting it? We will finally be able to actually see it in person next weekend so we can see if the big things like oil burner, cesspool etc needs to be replaced. I'm trying not to get my hopes up, but its in a great location and I can see the potential!
You will most likely get and offer rejected for a much lower price. If the prices around it are in the 600's and they are similar size etc then this house is priced right. Cosmetics alone is not a reason for a low ball number IMO. And cosmetics is not a gut job.
I agree. If it's already priced right for the area I wouldn't lowball. Remember when you do an inspection you can always try to negotiate the price if major issues arise during inspection although most houses are sold as is and an inspection is mostly an FYI of what needs to be fixed.
Most of the houses we looked at in our price range needed cosmetic work and the one we are buying needs cosmetic work but it's priced right for area so we didn't lowball.
I couldn't disagree more! Definitely lowball and stick to your guns. If the terms with your offer (down payment is high, good credit, no loans, etc.), they will pick you offer over a higher one with worse terms. They had like 4 all cash offers but we didn't up our price at all. Turns out, all 4 offers were contingent upon the sale of their previous homes, and the estate didn't want to rely on the fact that their home would sell for what they thought it would.
Worst case- you lowball and they negotiate up a little bit
Sounds like you got a great deal! But keep in mind - this is just your ONE personal experience. It's hard to generalize based on that. In some scenarios, you can negotiate, or come in aggressively low, in others, there are multiple offers and you can't. I also can't agree that the worst case scenario is that you negotiate... a seller doesn't have to counter, and won't always counter an offer. Sometimes, especially if there may be more than one offer, the lowest offers and cast aside with no further opportunity to negotiate. There is really no "always" or "never" in real estate because so much depends on the individual circumstances of the sale and the players.
For example, you prevailed over all-cash offers (or so you were told). But generally, all-cash offers are very appealing to estate sale sellers -- all cash buyers usually low-ball because they are usually buying to flip and want to maximize profit margins. But sometimes other factors come into play - - like if the C/O issue was known (like the one that cropped up in your sale), it could influence sellers to take an all-cash offer to enable them to sell "as is" (whereas a mortgage bank will often require C/Os). I just sold an estate sale in Wantagh at the end of last year, and they really needed an all cash offer because the out of state sellers (one lived in Seattle, the other in CT) didn't want to spend the time, money, etc. to obtain missing C/Os.
But that doesn't mean that every estate sale seller would do that, or that everyone has the same motivation.
My advice -- whether it's an estate sale or not -- is always to analyze comparable sales and market conditions when coming up with an offer strategy. It doesn't make sense to say "definitely lowball" without knowing how the home is priced for the area, size, condition, and without knowing what competition a buyer may face in that area, or how motivated the seller is. Sometimes the last two factors are just unknowable (at least until you start negotiating), but a buyer can always do their market research upfront, especially with a buyer's agent (relying on things like Zestimates is not really a useful gauge, as they are often so inaccurate).
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| Posted 2/22/15 2:44 PM |
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