Five Signs that a Property Might be Ripe for a Lowball
Bid

post from Free Money Finance on 01 July 2008 11:15:00 AM. © Free Money Finance

As most of you know, we're house shopping -- trying to improve our housing situation (better location and some land) during the recent drop in housing prices. If we can find a good place at a great deal, we'll be moving!

As such, anything related to buying or selling a house is high on my radar. And I was particularly interested in this Newsweek piece that listed five signs that a property might be ripe for a lowball bid. Their list:

The seller has to move, or has already vacated the property.
The home has been listed 90 days with no price change.
The seller has plenty of equity in the property and isn't at risk for being "underwater."
The home is the last one in a new development.
The home is being sold as part of a divorce or estate sale.

In my experience, this is a good list, though someone needs to tell this seller about these factors. They have already moved and are nearing 90 days with no price change, yet they somehow think the market is solid at this point in time. Strange.

We also looked at a home in foreclosure a couple weeks ago that fit much of what we're looking for, though it's a bit "over-the-top" size wise. The details on it:

4,800 square feet
Four years old
In a great township (the best in our area)
On 10-acres of land
Was on the market a year or so ago for $569k (when the owner was trying to sell it)
The fair market value based on the comps in the area is somewhere between $488k and $550k (I have two methods that use comp sales to estimate current value of places we see)
The bank is offering to sell the place at $425k

As I said, it's a bit over-the-top for us. We're a family of four and we really don't need 4,800 square feet (who does?). That said, we'll keep an eye on it and if the price gets crazy (in the $300k range) we might bite. It does need new carpeting and paint (strange for a 4-year-old house) but it's in pretty good shape otherwise.