How Much Less Than Asking Price Does a Home Sell For?

That is a tough question that really varies on many things. Each home is different but the average in Haverford Pa. is 5 to 7% less than the original asking price. Here are the variances that will determine the final price.

1. Condition Of The Home & Price Relative To The Competition. If a home is move in condition, meaning everything has been upgraded recently and you just have to unpack and start enjoying your home that property is going to get close to it's asking price or a little more if more than one bid is on the home. It has to be priced within it's competition though. The seller cannot say " I have a great home and put $20,000 into it so my home is worth $20,000 more than the top priced home." Your home will not appraise if a buyer agrees to a high price. The appraisers look for comparables within a mile. They have to have settled at that price. If the home does not appraise the buyer can withdraw from the transaction. So normally the seller has to reduce the price to sell it at the appraised value anyway. You also will reduce the traffic of buyers who are intimidated by the high price.



2. Time on the market. This is related to condition of the home and pricing. A move in might go the first week on the market if it is priced right. A home that has a major negative like needing the basement dug up and repoured or waterproofed or a new roof or electric might sit for quite a while without any serious offers. The seller might be trying to get top dollar regardless of the negative, feeling it is still a strong home. After living with a problem in a home, over the years it becomes less important and the owner loses sight of it's importance on the value of the home. I know we have a particular skylight that drips when the rain is blown a certain direction that I have been moving down on my list of repairs as the years go by. Each month a home sits on the market it loses more of it's buyer base. Everyone that is interested in the home has already seen it and only a major price drop will bring them back in. So that home might be reduced 2 or 3 times at $5,000 or $10,000 at a pop. A home that started at $350,000 might be down to $330,000 after six months on the market so it is already down more than 5%. Now most buyers interested in the home will offer $10 or $15k less if a home has been on for quite a while because they feel there will be no other buyers to compete with. Naturally the seller will come back with a counter unless they are under a lot of pressure to get the transaction completed.



3. Short Sales & Foreclosures. These homes typically get substantially less than their competitors because the sellers are distressed financially or the bank owns the title now and wants to get it off of their books. They usually are sold "as is" meaning they will not fix anything the inspector finds. Even the township inspection is sometimes stipulated as the buyer's responsibility. These homes may need major updating since the funds available to keep them updated were not there. Buyers typically drop down 10 to 20% off of the latest asking price. The negotiations will be long and arduous as the bank tries to get the best price for it's asset. They could drag on for months instead of a matter of days in a normal transaction.



So know going in what similar homes to the one you are purchasing are on the market for and what they actually settled for. An informed client is the strongest client to deal with. Sellers react differently to lower offers. Some accept it as a business tool and some get insulted and have a knee jerk reaction. Even the agent's preconception of the home's worth may have a bearing. We have had agents tell us not to even bother bringing in a low offer but they should have the courtesy to check with their clients first before they make that decision.



One other factor determines the offer. If the buyer is sure that is their dream home and knows they are not going to find another like it anytime soon we advise them to give the seller what they are asking. A few thousand dollars over a thirty year mortgage is not going to have a huge impact.



Century21 Alliance Jim & Deborah Brady

610-853-2700 Ext 416

www.bradyhometeam.com

Chang Mai Restaurant In Conshohocken Pa. A Nice Stop To Relax At

We went to Chang Mai http://www.mychiangmaicuisine.com/ Fayette St in Conshohocken last night and it was very pleasant. It is cozy ( about 20 small tables) and is a BYOB.The decor is pleasant and the noise was muted. The staff was courteous and sat us quickly and we had our food in about 15 minutes. Prices were reasonable between $12 and $15 for entrees at dinner time and I believe they have a luncheon special. I had drunken noodles and they were spicey and delicious. There were six of us so the entrees ranged from a Sweet Pineapple Chicken dish to the 3 pepper rating Bold & Spicey Shrimp. Everyone loved the food with no negative comments. We had a birthday cake with us and the server put it in the fridge for us and brought it out at the end of the meal and some of the diners joined in on our Happy Birthday Song. Overall it was great and we would go back again.


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GreenEggs Cafe In South Philly. An ecclectic menu worth the trip

Went to the GreenEggs Cafe in the 1300 block of Dickenson for lunch and it was outstanding. http://greeneggscafe.net/ is their website and you can download the menu. Read about it in Craig Lebain's article in the Philly Inquirer. They serve breakfast all day and have some interesting items on the menu. I had a cheesesteak that was not your normal South Philly one. It was chipped rib eye with carmalized onions, arugula mayonnaise, Gruyere béchamel, on a grilled ciabatta roll with fennel slaw. lol I told you not your regular sandwich. It was off the charts.




My wife had a cheeseburger that was better than one we had on Rittenhouse Square recommended in Food & Wine Magazine and half the price. We had house fries and sweet potatoe fries as our sides. How about this one.



Kobe slider trio 9.5

Blue cheese, maple glazed bacon • shiitake mushrooms, white cheddar • quail egg, arugula and truffle oil The menu is at http://greeneggscafe.net/GreenEggsCafe-BL-menus.pdf



It was about 15 tables, clean and quiet with helpfull staff and the food was on the table in about 10 minutes. We were there after lunch on a weekday but I heard on the weekends there is a line outside.



There breakfast looks fantastic. How about



The kitchen sink 8.5

Two eggs with cheese, our signature potato, choice of breakfast meat topped with homemade jumbo biscuit and sausage gravyin a cast-iron skillet

or

Crème brulee French toast 9

Vanilla bean custard, Fresh berry compote, drizzled with vanilla anglaise warm 100% maple syrup and topped with Chantilly cream

or

Breakfast burrito 8

Flour tortilla with eggs, olives, corn, chorizo sausage, signature potato, tex mex cheese, topped with Pico de Gallo, sour cream, avocado,

and fire roasted red pepper black bean sauce



Not your everyday coffee shop. I would go back again in a minute. Price was $25 for lunch with 2 drinks for the two of us.

What Is An FHA Loan And Why Are They So Popular?

FHA does not make loans. Rather, it insures loans made by private lenders. The first step in obtaining an FHA loan is to contact several lenders and/or mortgage brokers and ask them if they originate FHA loans. Believe me, In this market you will be hard pressed to find a lender who does not write FHA loans. It is a no brainer for the lender. They write the loan, have it insured by the FHA and still get to charge interest and fees for writing the loan. If the buyer defaults on the loan they are covered.




Most lenders are requiring 10% down plus a credit score of at least 650 plus the closing costs. On a $300,000 home that is $30,000 down plus around $18,000 closing costs. How many first time buyers do you know with $48,000 available? The interest rate is around 5.25 right now and you would also have to pay PMI insurance that insures the lender gets his money if you default.



If you qualify for a FHA loan you only need 3.5% down and can finance some of the closing costs. On the $300,000 home that is around $10,500 for the down payment and $9000 if you finance half the closing cost for a total of $19,500 versus $48,000 for a conventional loan. If you have strong credit you can also beat that 5.25 interest rate and eliminate the PMI insurance since the FHA is insuring the loan.



FHA has more than doubled the number of mortgages given in the last three years and is now 30 percent of the

housing market’s mortgages. In 2007, FHA issued 400,000 loans and last year, two million were issued.

This trend is evident throughout our three local counties; Chester, Delaware andMontgomery. In 2009, 28.7% of homes purchased in these three counties used FHA

financing. Compare this to only 5.3% who used FHA financing in 2007 in this same area.



FHA had a reputation in the past for causing headaches for the sellers with a seperate inspection but they have eased up on some of their requirements. A typical home inspection is much more thorough than an FHA one. FHA just uses a checklist while a home inspector goes over the home from top to bottom. We have not seen any deals broken down by an unreasonable FHA home inspection.



I hope that clears up some of the confusion surrounding an FHA loan. Please contact us if you have any questions.



Century21 Alliance

Jim & Deborah Brady Realtors

Licensed in Pa #RS276048

Office: 610-853-2700 Ext. 416

Direct: 610-853-8416

Cell: 610-613-3381

Fax: 610-853-4835

Website: http://www.bradyhometeam.com



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