Seller Concessions?
Can anyone tell me about seller concessions? It’s been recommended… am pining for a particular house, seller wont budge below a certain #, it needs a ton of work. Other ideas? TIA.
Can anyone tell me about seller concessions? It’s been recommended… am pining for a particular house, seller wont budge below a certain #, it needs a ton of work. Other ideas? TIA.
“what are your real thoughts on pricing for 2011-2012?”
Either half off or continued declines towards that. Nothing else. The defaults/pre-foreclosures, nationwide and local (Brooklyn lis pendens up +180% from 4Q08 to 4Q09), need to be cleared out into the open. But banks are not moving on them so they can keep the market tight. This also hinders them from lending. This can’t last forever although it could drag on for some time. This shadow inventory has to be cleared before things get “better”. They’re starting to do this in Greece.
All of the above is driven by the price fundamentals of 3x median income and 10x annual rent.
“Many people walked away in 1998-2001 andd have regreted it ever since.”
We weren’t in a bear market then. Case-Shiller YOY would have told them so (it was “green” through that period). And that was when we had credit capacity. Have you seen the chart of total US debt since then to date? We’re contracting now. We’re entering a deflationary spiral that will take housing with it.
“I’m not sure BHO even thinks we’ll survive as a species to see 2012.”
It’s Team Bull that thinks everyone will die if the paper value on their property collapses in half. Wah wah wah…
***Bid half off peak comps***
Seller’s concession means the seller pays some of the closing costs. They take the money out of what you’re paying them for the house.
It is rare that the seller or the buyer get exactly what they want, and the best deal leaves both parties slightly unhappy. The best advice here though, imho, is that which relates to your ability to survive financially after the purchase. If you simply pay more than you wish, enjoy the house and don’t get in trouble financially, it really doesn’t matter as long as you enjoy the house over time. There are reasons to pay up – location – you can fix a run down house in a great location, but you can’t move a great house in a crappy location; specifics of the property – it has exactly the space and layout you need, or other features you consider important.
But you do have to be willing to walk away, always.
As for whether the market will go down or up – that’s a dangerous game as there are other factors such as your time frame, your personal situation, the cost of financing…
good luck….
We did a Seller’s Concession (different than negotiating a Lower Price) and it worked great–it covered part of our closing costs, which freed up some money to do some needed reno. Basically, the seller agreed to a price 3% HIGHER than listed, but then they gave us that difference at the closing table. So our mortgage went up a bit, but we got cash in our pockets. The only downside for the seller was that they had to pay taxes on that extra income, but in our cases it was worth it for both parties involved. Don’t know how banks like this arrangement nowadays though.
Lincoln, You must not be a regular reader. I’m not sure BHO even thinks we’ll survive as a species to see 2012. Although his post here was a more nuanced and personal one than I’ve seen from him in the past.
DIBS, is that at me? My suggestion to her was that she walk away if it means overextending. Many people bought things they could not afford during other times in our history and they are now dealing with sick relatives, joblessness and a mortgage they will have to walk away from. Don’t be an ass.
Buy now or be priced out forever. It will be worth a trillion in 5 years once those sub primes and no doc loans come back.
Many people walked away in 1998-2001 andd have regreted it ever since.
BHO,
I am looking now too, and I keep wondering when the time will come. I don’t have any regrets for passed up houses, but what are your real thoughts on pricing for 2011-2012?