Is Baltimore More Receptive To Real Estate Counter Offers
There is an interesting article on Inman News that discusses data from Trulia highlighting areas that make second or even third price reductions to real estate listing prices. What is interesting to note is that real estate in Baltimore MD came in fourth with 48% of properties listed requiring a second or third price reduction before selling. This prompts the question as to whether or not it is worth submitting a second counter offer for any real estate you are interested in.
It’s the old-fashioned bargaining game – a home is listed for $300,000. You offer $250,000 and they come back with a reduction to $280,000. If the home has not had any significant price reductions, and it has been on the market for 70 or more days, then a counter offer may well be worth following up on. You may strike a deal at around $265,000.
The data from Trulia suggests that first reductions are up around 10% in Baltimore – that’s $30,000 on a $300,000 home, bringing it down to $270,000. A second price reduction of 5% (or $15,000) would lower the price to $255,000 – a seller would most likely settle for $265,000 given the opportunity.
There is a word of caution in these figures, however, and Trulia’s Tara-Nicholle Nelson puts it quite plainly:
“We also see a pattern of sellers making early, deep and multiple discounts in foreclosure hot spots such as Michigan, Florida, Maryland and California – a bad omen for the future of home values in these already depressed areas.”
While it is a bad omen in the short term, a market correction will occur at some time into the future and there comes a time when short term drops in prices has to be countered by low prices. You can buy at low price now and perhaps face a small drop in prices over the next 12 months, or wait and possibly see a recovery start to lift prices again. You also need to consider the slowly rising interest rates – paying $20,000 more at today’s interest rates could be better than saving $20,000 on price, but paying one or more percent extra in interest rates in 12 months.
Baltimore MD could well be an area worth a closer look. It should be remembered that in any city there are good areas and bad areas to buy in. Catch a good area and you could score a bargain that doesn’t drop in value over the next 12 months. It’s interesting data to absorb if you’re a buyer.
Related posts:
