Archive for Ask Betty...
Getting Your Offer Accepted
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Dear Betty,
We made an offer on a home that was about 5% below the asking price. The sellers rejected our offer! What can we do to make Kokomo sellers more reasonable? (We sold our home in Florida for 20% less than we were asking for it.)
Moving from Florida
Dear Florida,
Who says the sellers aren’t reasonable?
Just because you sold your house for less than your asking price doesn’t mean your neighbor in Florida or a homeowner in Kokomo should sell for less than they are asking for the home. Each situation is different.
That being said, offering within 5% of the asking price seems (on the surface) to be a reasonable offer. Note I said it seems to be a reasonable offer – not an acceptable offer! The only one who can decide whether an offer is acceptable is the seller. There are so many unknowns here:
- Did the homeowner make a counter-offer or simply reject your offer?
- Was this your first offer on the house or were you and the seller playing “volley ball” with the price and terms?
- Were there other offers and you were asked to make your “highest and best” offer?
- What else was in your offer that may have scared the seller?
- Did you ask for a longer than “normal” closing period?
- How much earnest money were you offering?
- Did you submit a preapproval letter from your lender?
- What kind of financing are you getting?
- Did you ask the seller to pay your closing costs?
There is so much more to getting an offer accepted beside the price. There are the terms and the contingencies among other things. And if you were dealing with a foreclosure there are a whole new set of rules buyers need to honor – but that’s another posting.
Ultimately, sellers set a price for their home and hopefully do it with the expertise of a professional who knows the local market. If they can get that price within a reasonable time frame, then they have realistically priced their home.
If they can’t get that price, they will either have to lower the price or the property will languish on the market and eventually expire or be withdrawn.
The main thing to remember is that your experience in selling your home doesn’t mean the same logic applies when you are buying a home in Kokomo or anywhere else. It also doesn’t mean that your choice to sell for less should in any way impact the sellers of this home.
Perhaps it would make sense to restructure your offer. You might raise your price but seek better terms. Or you could change the terms so they are more in line with what the seller is seeking. Your best bet is to talk with your realtor (hopefully you have one) who can advise you on how to structure your offer to get it accepted.
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Sites with Kokomo Foreclosures
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Are there any websites where I can get a list of all Kokomo foreclosures without paying to see them?
Looking for a Bargain
Dear Bargain Hunter,
I believe most of those sites you are referring to are paid sites. And unfortunately the data on those sites is usually outdated or inaccurate, making it useless.
An investor client of mine recently asked me about these sites. She was considering subscribing to one of them. I actually went to the site she was considering and did a check of the houses on the public portion of the site. All of the houses had either sold (some as far back as a year ago) or they were currently listed for sale in the MLS.
The sole purpose of these “paid” foreclosure sites is to get money from you and me!
- They get you to sign-up and pay a membership fee.
- They turn around and “sell” your sign-up information to realtors, lenders, etc.
There is no “secret” way to get a list of foreclosures in Kokomo – 99% of all foreclosures in Kokomo are listed in the MLS. For heaven sakes, I can give you a list of foreclosures and I won’t charge you a single cent! All you have to do is go to Free List of Kokomo Foreclosures, fill out the form and I’ll send you a list of foreclosures in Kokomo.
So save yourself some money and some frustration!
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Appraisals Go Down in Kokomo
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Kokomo Home Appraisal Goes Down!
Dear Betty,
We bought our home in Kokomo a little over two years ago. It was brand new and we got a really good deal on it. The builder was leaving Kokomo and slashed the prices on their last few houses. It appraised for almost $20,000 more than we paid for it!
Now we want to refinance and we had to get an appraisal. We got the appraisal back and it says our house appraises for $10,000 less now than when we bought it two years ago.
How can that be? Something has to be wrong!
Bewildered Homeowner
Dear Bewildered,
First, let me explain a little about what an appraisal is and how your current appraisal can be less than the one done when you bought the house two years ago.
An appraisal is an estimate of “fair market value” for a home at a certain point in time. Fair market value is what a buyer might pay – or a seller might receive – for a home at a certain point in time.
You may be thinking, “But I’m not trying to sell my home, I just want to refinance it.”
You are right; but your lender has to look at your house from the stand point of its “fair market value” in case you default on your loan and they have to take it back and sell it.
An appraisal has two purposes:
- to protect you from spending/borrowing too much on a home
- to protect the lender from loaning more money than a home is worth (This applies in your case – the lender protecting themselves.)
There are several steps in an appraisal. Perhaps the most important step is using what are called comparable properties or “comps” to estimate the “fair market value” of a home.
“Comps” are properties that have sold in the recent past. They are located in the same area and are similar in size, age, style, amenities, etc. Ideally the homes have sold within the past three to six months. The key here is homes that have sold – not houses that are for sale now; not houses that were on the market and didn’t sell; but houses that actually sold!
Now to your 2 appraisals…
Appraisal 1 – 2007
Let’s say you closed on your house June 1, 2007. When your house was appraised, the comparable homes had to sell between December 2006 and May 2007 – three to six months prior to your June 1 closing. The appraised value was based on homes similar to yours that sold before you closed on your home.
Appraisal 2 – 2009
Now, fast forward to August 1, 2009. You know you got a good deal on your house and you know it appraised for much more than you paid two years ago. But this appraisal for your refinance was based on home sales of similar homes in the past six months – homes sold between February 2009 and July 2009.
Why has the appraised value of your home gone down?
There are several reasons why the “market value” of your home and every other home in Kokomo has gone down:
- General economic down-turn
- Fewer homes selling
- Discounted prices on foreclosures
- Unemployment or fear of unemployment
- Fewer buyers qualify for financing
It may not be any consolation to you; but you are in a much better position than many homeowners in the Kokomo area. Your home is still worth more than you paid for it and what you owe on it. Most homeowners (including me), who bought in the past 5-6 years, have lost “market value” on their homes. We can’t sell our homes for what we paid for them. And depending on how much equity we have in the house, can’t refinance them either.
Should We Buy a House in Kokomo?
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Is Buying a House a Good Idea?
Betty,
I just read your blog on buying a home in Kokomo. My wife and I are teachers and at the moment feel pretty good about our job security. However, we don’t know how long we will stay in Kokomo. We are thinking 5-7 years at the most and it could be as little as 2-3 years. Should we buy or wait until we know for sure what we are going to be doing?
Thank you so much,
First Time Buyer
In Kokomo Is it a Good Time to Buy
or Sell Real Estate?
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Should We Buy or Sell Real Estate in Kokomo
Dear Betty,
With everything going on in the economy right now, is it a good time to sell our Kokomo home and buy another one?
Thinking About Moving
