I am curious what you would offer? This isn't political...it's a word

[texpatriot2004]

problem,like the kind I hated in math class and it involves real estate in Northwestern New Mexico...a horrid, horrid market.

House has been on the market since Oct 2006. Owners went back to Austin Texas shortly after listing the property. Except for an occasional visit, it has been vacant since April 2007. One of the owners is "very stubborn" initial list price $379K. Home was built in 1991 - custom built by a wealthy, eccentric woman (may she rest in peace). The current owners are the 3rd owners and they bought the house approximately 2-3 years ago for $303K + a (I am not kidding) $10,000 custom built-in bookshelf/wall-unit thing that is, frankly, ugly. Asking price is now $350K but "bring all offers" was what the ad said. The design is "unique" and it basically has 2 bedrooms and a finished basement (that they are trying to market as a 3rd bedroom - whatever). Square footage is 2,683. Great view. Nice neighborhood/location. The house is very dated and someone was very fond of "country blue" (we are not and mind you it is not a "country home"). Country blue counter tops in the laundry area, country blue ceiling in the kitchen, country blue faucet in the master bath (along with shiny gold accents). Beautiful hardwood floors. Old appliances in the kitchen. Apparently everything is mostly the same as when it was built in 1991. Overgrown yard (front and back). Tax appraisal value was $270K in 2006 and $290K in 2007.

Given all the above, if it were you, what would you offer if you wanted the house?

[babylonsister]

1. I'm not trying to dissuade you from posting this here, but I wanted

to share this group if you didn't know about it. There are many knowledgeable folks there, some from NM.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topics&forum=287

I cannot help you at all; I live in a 1700 sq. ft. house with a pool that cost about 69,000 in 94. It's nothing grand, but it's home. And it's getting old, having been built in 76. 91 sounds new to me!

[texpatriot2004]

5. Hey, thanks for the link. Yeah. A pool and 69K way yeah but I

know what you mean our last place was built in the 70's so something in the 90's is like brand new.

[Suich]

2. How many bathrooms?

Have they been updated at all?

[texpatriot2004]

7. There are 2 baths upstairs. Never updated. The decor in these

baths...guady (? spelling, you know eccentric, strange, ornate) Also one full bath in the basement...also never updated.

[Warpy]

52. Most of the NM market stinks, especially for big houses

People are looking at heating and cooling and thinking "downsizing."

What are houses in that area going for per square foot? That should tell you approximately what to offer. Personally, I'd offer $230,000 on the place as a first offer and see what they counter with.

The place has been costing them at least a thousand bucks a month in mortgage payments (assuming 20% down) for 13 months. My guess is that they're ready to start the bargaining process.

It sounds like a 10 year project just to get it up to today's standards.

[John Q. Citizen]

3. What is other property in the same area, and the same size lot and house going for?

Does the basement have an egress, so it can legally and safty be used as another bedroom? (Fire danger)

[texpatriot2004]

9. Not sure about comps. This house is not really comparable as

it is unique, and only has the 2 bedrooms as opposed to 3 or 4 in the comps. Regarding the basement...no egress, there is no way out in the event of an emergency but there are many windows...with burglar bars (yuck).

[flvegan]

4. How badly do I want it? What's the location, etc?

What does the inspection look like (sitting for almost a year)?

[texpatriot2004]

10. Haven't seen their inspection yet and haven't hired one out yet

either. Just started the process of inquiring about the property. The seller's agent says everything is "functional" but for $350K it need to be more than functional (I am from TX where the housing is cheap and although we have been de-sensitized to some degree that is just not acceptable).

[flying_wahini]

6. not a penny over 290,

the blue decontamination process will cost you -
the downstairs "bedroom" will need it's own bath and closet
space to be used as a bedroom....
the tv/media bookcase will have to go.
don't overpay because of your emotions.
let them deal with the emotional fallout.

and watch the fine print on your contract -
GET an inspection and withold final offer until you
get a walkthru with the inspector. don't use theirs, either.
get your own inspector. list in detail your demands.
stick to your guns......
all this is just my opinion, but I have bought and sold 4 homes in
the last 8 years....

[babylonsister]

8. FWIW, inspections were mandatory here, thankfully. We saved money. nt

[texpatriot2004]

11. "the blue decontamination process"...love that. LOL. BTW

there is a full bath in the basement and a kitchenette. There are also 2 closets down there but no exit in case of an emergency.

[flying_wahini]

14. NO exit? that could be a problem - what if there is a fire?

wouldn't want to put the kids down there....

hmmmm, can you add an exit? would it be too cost prohibitive?

[texpatriot2004]

15. No idea about the cost of adding a door but it might be possible.

Interesting that they are marketing it as a 3rd bedroom (in my opinion) it isn't safe and it isn't a bedroom.

[texpatriot2004]

16. Oh, and the mechanical room is off the full bath down there so

there is a potential danger. Thankfully, we have no children but we do have parents who may want or need to be with us at some point.

[John Q. Citizen]

18. So it's not legally 3 bedrooms, it's 2 and a basement. Does the Sq.ft include

the basement? (probably does)Full basement?

Where i live, you couldn't rent that out. If you did, major liability.

[texpatriot2004]

21. Yes, square footage includes full basement. It is a very large

area down there. But it isn't a 3rd bedroom. We are concerned about resale but it is such a nice location and the view is great and for us, it would work. Just think they have it way overvalued.

[John Q. Citizen]

24. They aren't going to want to sell it for less than they paid is my bet. That would be

probably their rock bottom price.

That get's them out without taking a hosing.

[texpatriot2004]

27. Yes, that is my take on it. They want their 303K + the 10K for the

bookshelf per my conversation with their agent that is what they are hoping for at the very least but I'm not willing to pay that and so far neither is anyone else except for the 1 or 2 who would but can't get the financing.

[John Q. Citizen]

37. Tell them 303K and they take the book case. That is if the nieghborhood

is good enough to warrent that price.

[texpatriot2004]

19. So, do you think it would it be insulting to the sellers if we offer

somewhere between 240 and 260K? I can see an easy 20 - 25K in work to be done.

[OzarkDem]

12. Real estate is much more expensive down south than up north

That amount of money in the Great Lakes area could buy 5 BR and 3,000 sq ft minimum. Why do people live in the south anyway?

[texpatriot2004]

13. Damn good question eh. Mind you I come from a very long

line of Southern folk. Seriously...5 bedrooms and 3,000 sq ft. WOW. I have always wanted to live in Boston...or Vermont. Currently, we are in the Southwest and it is ridiculously overpriced unless you compare it to California or Colorado.

[flying_wahini]

17. real estate is a screaming deal in Texas, compared to almost

everywhere.

My last house was 4 yrs old, 3875 SqFt. 4 br,3.5 baths 2 story
on a private CDS. pretty and well built. 272K. you couldn't touch it for under 700K in most parts of the country. Just sayin',,,,,,,,,,

[texpatriot2004]

20. Exactly. We had a huge 4 bd rm, 3 bath, with a pool and 3 car

garage in TX about 2800 sq ft + or - only paid $169K big corner lot golf course community on a cul-de-sac...miss that, can't touch it here for less than 350 - 400K at least.

[PassingFair]

33. They have jobs down there.

So I've heard....

[OzarkDem]

49. We have jobs up here

with benefits. And with less expensive housing and cost of living. I remember being so surprised when I lived a couple of years in Texas at how many people's jobs (college grads, management level) didn't have any benefits - no health insurance, no 401 k's, nothing.

Back then nearly half the people living in Tarrant Co, TX had no health insurance.

[On the Road]

22. Depends on How Much You Want the Place

If you really want it, and the owner is "really stubborn," offer something close to what they want, maybe $340k.

If you're willing to walk away without a good deal, take what they owe on the property and add $10k. (Or alternatively add $10k to their purchase price). This is the way the "We Buy Houses" people operate -- they basic to take over the mortgage and give a few thousand dollars of pocket money. The majority of people don't take their offer, but some motivated buyers do. If you keep trying with different places, you can get some unbelievable deals.

One thing that could change the equation is an appraisal -- not the tax appraisal, but what neighboring homes are actually selling for. As a start, you might try Zillow.com. Although their estimates are sometimes a little off, you can see on map what nearby houses are selling for. If the house appraises for $320k, buyers may not be able to get loans, and you have a solid basis for offering a lower price.

If none of this works or looks reasonable, check again in six months. Right now,they're carrying the mortgage, insurance, and property taxes and getting nothing for it. The buyers may have changed their atitude, or it might actually foreclose and you can get a bargain.

[texpatriot2004]

23. Apparently they are having trouble getting buyers who can

qualify for the mortgages. There have been 3 offers in the year it has been listed. The last 2 ran into issues about money. I think the "very stubborn" owner and the other buyer couldn't agree.

Thanks for the Zillow link I will check it out. I don't know what the comps are but I know that this is a smaller house in a big neighborhood many homes are much more expensive there albeit nicer and newer.

[John Q. Citizen]

25. Always buy the worst house on the block. Location is a lot more important

than the house is in many ways.

[On the Road]

26. Are You Working with a Real Estate Agent?

Sometimes the best way to get the inside scoop is for one real estate agent can talk to another. Both have an interest in getting a deal done.

If you could get the amount of the previous offers, that could set a range, especially if the owners accepted some and rejected others. And if the process got that far, there was probably an appraisal done, which would be good to know (taking into account that if property values were dropping, oldre appraisals may be higher than newer ones).

[texpatriot2004]

28. I think we need to get an agent. I do have one in mind. I have

also entertained the thought of using the same one as the sellers...probably not the best idea but I was thinking we could maybe save some money if we did, you know maybe they would take a little less and save the sellers some $.

[On the Road]

35. There Might be Restrictions on Using the Same Agent

You could even ask for a rebate of part of the commission if you like. You have more bargaining power now than a couple of years ago. The most important things are that the agent knows the neighborhood, possibly the other agent, and that he or she likes and has experience with helping customers with this kind of negotiation.

[John Q. Citizen]

38. I'm not up on New Mexico real estate law, but if you went without an agent,

presumably the deal could go through for 3% instead of 6% commision, and on 300,000 that would be 9k extra to work with. In this case I'd knock the whole chunk (or almost the whole chunk) off your price, since it's definatly a buyers market kind of deal.

[rucky]

29. In NW New Mexico?

Farmington? Gallup? WTF is a 15-yo, 2br home going for that much around there for?!

Buy some land, custom build, save some money and make the countertops any color you want.

[texpatriot2004]

31. The market here is horrid. You would not believe the prices

they get here in Farmington NM. Houses built in 1950 something or 1960 something going for 250K and they aren't even remodeled. CRAZY!

This one is "new" compared to many we have looked at.

[begin_within]

44. If you think that's expensive, try San Diego

Probably three times the price for the same house.

[Mojorabbit]

30. My house was built in the fourties

We did some renovation and added a few rooms and it tripled in price. We loved the land and view. The house we knew needed fixing up and it has been great fun to do it.

[texpatriot2004]

32. We are in a fixer upper that was built in the 30's now. Nothing is

to code and it needs like, new ceilings, new walls, new floors, a new roof...it is way beyond our DIY skill level. It is however cheap. It is technically a 2 bedroom 1 1/2 bath but it would have to be only 1 bedroom if we remodeled because it just isn't big enough. 1300 sq ft.

[Mojorabbit]

34. We had to replace pipes and wiring.

and we are replacing windows as we go.We redid the kitchen too. The old bedrooms were ten by ten so we made one of them a closet and built on a master suite that is huge. We still have only 2 bedrooms.It was expensive. We plan to stay here forever so it was ok for us. If you are not looking for a permanent location the cost of renovation of the new house is something to look at for sure.

[SheilaT]

36. Paying more than what it's appraised for

strikes me as a very bad idea. Depending on how much you'll be financing, you may have a lot of trouble getting a mortgage. I'm under the impression that banks don't generally loan out more than a house is worth. It is NOT your problem that they overpaid for the house in the first place. You don't have to bail the owner out of his bad financial decision. Surely there are other places that are priced at something closer tho their appraisals.

Oh, and as for the basement bedroom, if there are decent zoning laws it's not a legal bedroom. Legal bedrooms (where there's effective zoning)require an exit that is usable by normal sized adults.

Surely this isn't the only home for sale within 30 miles. Or is the "horrid, horrid" market one with no houses for sale? Is there no vacant land to buy?

[texpatriot2004]

39. I do not yet know the appraisal value, only the tax appraisal

value but that is my inclination not to bail them out. It isn't a legal 3rd bedroom I am sure, just their marketing. As for my "horrid, horrid" market comment I just mean that I don't like what I see and most of it is way overpriced for what you are getting. For instance, a 3 bed, 1 1/2 bath, no garage...about 260K. Or the nice new homes for 450-600K unless you want the new (badly constructed in a new neighborhood) cracker jack box for 1700 sq ft or less for 270K. The neighborhoods are mostly wierd...nice home, nice home, trashed out home, next street over trailer park. I am from Texas where homes are cheap and the selection is wide. There isn't much to choose from here it isn't a large town. Lots for sale...75K to 100K or more plus the house you build and decent builders are generally booked into the future. I really don't know enough about having a home built but that maybe the best thing. We are told that we can't build for less that 175 - 200 per sq ft at least. ?

[texpatriot2004]

40. Thank you all for your input. Your feedback is very helpful. I am

going to call it a night. Sweet dreams DUers.

[texpatriot2004]

41. So, do you think it would it be insulting to the sellers if we started

the bidding around 240K or so? 269K maybe?

[SheilaT]

42. I would suggest that you absolutely

need to get a real estate agent involved. You can use their agent and insist on a cut in the commission. We bought a house that way some years ago in Colorado.

I think the idea of starting at what they paid for it plus 10k is a good starting point. It's their problem that they put 10k into an ugly bookcase. Their realtor should be explaining to them that just because you put something in doesn't mean the next purchaser has to eat the cost. The realtor can also tell you how close the tax appraisal is to actual appraisals, because that varies widely across the country. In my area (Overland Park, KS) they are extremely close to what a selling price would be.

You have nothing to lose by starting with a low offer, other than the owner might refuse to even counter. And other than the view, it does not sound like you like this place all that well. Other places will come on the market.

Is there any new construction in that area?

[begin_within]

43. It seems like they are asking too much for that area of the country, but if

you post some pictures that might make a difference.

[texpatriot2004]

46. I don't have any pics of my own, here is the link to the realtor

http://www.maryjowalters.com/our_listings.html

bottom of page 2 - $350K white house w/tile roof

[begin_within]

47. A house identical to that, within the city limits of San Diego, would go for

$800,000 at the minimum now. Assuming it's in a relatively desired neighborhood here. If in a rundown neighborhood or right next to a freeway, $100k or even $200k less. Two years ago, it would have gone for $1 million in San Diego, but prices have dropped about 20% in the last 2 years. $350,000 for it seems like a good deal compared to houses here. I guess there is less demand in Farmington than there is in San Diego. That house must have a good view, otherwise they wouldn't have put those 3 large windows there. The landscaping is drab, but that could be corrected. The bookcase doesn't really bother me that much. The bedroom with the blue curtains is ugly. The whole interior of the house could use an "extreme makeover." I would probably buy a house in a more rustic area with more trees around it, but that's just my taste.

[karynnj]

48. Wow It's gorgeous - It would be way more here in NJ

As they have had difficulty selling it, it may be they overpriced it. Do you know the prices that they had agreed to in the offers that fell through? If you do, that would give you a maximum. As they have had buyers fall through, presenting the Realtor with the reasons you will have no trouble being approved would help.

On resale questions, it is a beautiful unique home. I can understand the concern as it has stayed on the market a long lime. It looks perfect for a couple who might want to retire in that area - if this is a retirement area.

[texpatriot2004]

50. Actually, it is a retirement area. It could use an "extreme

makeover" that is certain. I am not sure what offers have been made? We'll see what happens.

[karynnj]

51. good luck with that one or another (nt)

[librechik]

45. my house was built in 91, too--1891.

The entire outside of the house is country blue. And I don't like country blue. (maybe we'll paint it someday--we've only lived here 15 years.

I love it because it's old.