62 replies to this topic

[Dave Burrell]

Of the 85 sales reported for May so far, 25 sold for more than listed price and another 12 sold at listed price.

Does that mean 48 sold for below listed price/value? Not to be a downer or anything, just trying to get my head around these stats better.

[Steve Heard]

Does that mean 48 sold for below listed price/value? Not to be a downer or anything, just trying to get my head around these stats better.

Yes, it does, but the news media would have one believe that the sky is falling and I think one would expect the number to be much greater.

For the month, homes sold for an average of 98.15% of asking price.

One caveat, though, is that this number reflects the price listed at the time the offer was accepted. In other words, some people start off with unrealisticaly high asking price and then lower it until they get an offer.

[caligirlz]

Forgot to address this. The sales are literally all over the map. It's more about the property. The sweet spot seems to be somewhat modest homes, 3 bed 2 bath between about 1500 to 2000 sq ft, give or take, in the $275K to $325K price range.

And also homes that are less than 275K, it seems regardless of the condition, because then the investor comes in, fixes it up & flips it in the sweet spot range you mention.

Our rental property manager says that if you have a Folsom house for rent, you'll have 10 applicants as soon as you advertise it, more if you allow pets. Investors make up about 1/3 of the market in Sac County right now, because they know they can get positive cashflow. Properties are more expensive in Folsom than similar homes in other areas, and the rents aren't that much greater, but you generally get a good quality renter here and lots to choose from.

The rental homes I've seen in Folsom are significantly higher than other areas. It looks to me, and I completely understand, that the owner is charging the mortgage payment rate. It's rare to find anything in the $1200-1300 range. Prices usually start at $1600 (or higher) & go up. IMO, if I'm going to spend that much in rent, then I might as well buy/own. That is, if I can find one, and so far I have not.

It's not so much that property values decline before the appraisal is done, it's more about appraiser opinion or buyer excitement and motivation. I do have a friend who turned down an offer because it was too high and I know REO agents who reject financed offers which are too far above asking price because they don't want to go through the appraisal/renegotiation/rejection process.

So these REO agents who reject offers because the financed offer is to high, or it is too low and they don't want to deal with it..is it possible the real reason is partially due to lack of experience or some other reason other than not wanting to go through theappraisal/renegotiation/rejection process? What I find absurd is those who won't communicate their issue, or somehow they have personalized the deal...acting like they are the seller and not the agent.

It just seems if there are multiple offers on a place that is bank-owned, it doesn't matter if there ends up being multiple bids at the asking price or above if the value isn't there. I'm only bringing this up because I know someone it has happened to and the bank went ahead and let them have it for the lower appraisal price rather than renegotiating and putting it back on the market.

With most offers to purchase, there's an appraisal contingency stating that it must appraise at no less than the specified purchase price.

In one case, a property was listed for $320K, and there were multiple offers. The highest was for $345K, using FHA financing with 3.5% downpayment.

This sounds crazy to me, only putting 3.5% down. That's going to result in a huge house payment. Whatever...

Based on comparable sales, it was unlikely the property would actually appraise that high, so the seller rejected the offer, choosing a more reasonable one and avoiding having to delay closing by renegotiating or putting it back on the market.

Some buyers have purposely bid more than they thought the property was worth so they'd get the deal, then renegotiating after the appraisal came in. The danger is that with appraisals being subjective, it may appraise for that higher price and they are then obligated to complete the purchase at that price.

Isn't that the same mentality that contributed to driving up prices in the first place?