How much to offer on home? (Chicago, Naperville: comparable sales, for sale, real estate)

[cubfan3]

I've been looking at home all over the Chicago area and am wondering: in this market, what percentage of ask would be a reasonable initial offer, and ultimately to pay?

I know it depends on what other houses are selling for in the neighborhood and so forth, but I'm talking about all things being more or less equal. Naperville prices in particular seem completely all over the place, making price comparisons difficult. Some sellers seem to think their granite countertops and new sump pump add $40K to their home value over their neighbor down the street.

One agent told me to expect to ultimately pay between 95-99% of ask, but I find that tough to believe in this market. I know of one couple that got a place in one of the southwest burbs (which one escapes me right now) for 85% of ask.

I'm just confused at this point. What is a sane benchmark in an insane market?

[middle-aged mom]

There is no such thing as a benchmark as it relates to real estate.
What matters is where comparable homes in comparable locations are closing .

One seller might be priced $50,000 out of the market and another listing might be positioned to sell at the asking price. Anyone can ask any amount for their property.

Homes selling for steep discounts are usually foreclosure properties, sold as is, where is. These may or may not be the best deals in town.

Make sure you have an agent who knows the local dirt and why a home sold for what it did when it did.

[cubfan3]

I've been trying to do that...look at comparable sales...with whatever available sources I have (e.g. Trulia)...but in this market there doesn't always seem to be much to compare to. Plenty of homes for sale for comparison, but not always much quantity of comparable homes sold. If, for example, the last truly comparable home in that (or a similar nearby) neighborhood sold for, say, $400K, but that was way back in August, well then what?

A friend of mine told me that just as sellers can sell at whatever pricepoint they like, a buyer can offer whatever they like, and the home is worth whatever both parties agree to. While obviously true, that didn't help me much at all...lol.

[Pete MUFC]

Originally Posted by cubfan3

I've been trying to do that...look at comparable sales...with whatever available sources I have (e.g. Trulia)...but in this market there doesn't always seem to be much to compare to. Plenty of homes for sale for comparison, but not always much quantity of comparable homes sold. If, for example, the last truly comparable home in that (or a similar nearby) neighborhood sold for, say, $400K, but that was way back in August, well then what?

A friend of mine told me that just as sellers can sell at whatever pricepoint they like, a buyer can offer whatever they like, and the home is worth whatever both parties agree to. While obviously true, that didn't help me much at all...lol.

Cubfan, this is just my experience.
My offer was 80% of ask, and I ended up buying the house for 85% of ask.
It's all individual and depends of many factors. Most importantly is how willing the seller is to sell his property.
In my case the house was on the market for more than a year.
Not a forclosure or short sale and house was move in ready.

[BurrRidge Cub]

Originally Posted by cubfan3

I've been trying to do that...look at comparable sales...with whatever available sources I have (e.g. Trulia)...but in this market there doesn't always seem to be much to compare to. Plenty of homes for sale for comparison, but not always much quantity of comparable homes sold. If, for example, the last truly comparable home in that (or a similar nearby) neighborhood sold for, say, $400K, but that was way back in August, well then what?

A friend of mine told me that just as sellers can sell at whatever pricepoint they like, a buyer can offer whatever they like, and the home is worth whatever both parties agree to. While obviously true, that didn't help me much at all...lol.

Trulia is a horrible tool to use when trying to find a price point. Sometimes it's in the ballpark, and sometimes it's way out of the ballpark.

Trulia is fun to look at, but that's about it.

[GolfLover2]

cubfan3: Trying to figure out this market on your own is going to be very hard. Plus, with appraisals needing to be made on properties, the ultimate sale and financing is very dependent on what the most recent comparables are in the area ... and what an underwriter will accept. Please .. please do yourself a favor. Do some homework and find the most qualified real estate agent servicing the area(s) you are considering for purchase. Together you will be able to figure out your best course of action and the offer you should make for a property. That being said, the very first step you should take when considering a purchase is one towards a qualified, reputable lender. I cannot stress that enough. They obviously will do all the preliminary prequalification needed, but they are also a good referral source for the agent (and other real estate professionals) you seek. Buying is all about being as educated as possible about the process, the professionals you use, and the property you are buying. Education is your best protection moving forward. Best of luck to you ... and write again if you need more info.

[US-Traveller]

Generally people are getting 90-95% of asking. Some homes in the upper price ranges ($2+ million) are selling for 80-90%, but that just means they were overpriced.

[cohdane]

Get on Redfin.com

You can enter your search parameters and then narrow it down using the map to the exact street(s) you're looking at. You can also click an option to show sold prices for the last 10 years, which will give you an idea of where the price trends are.

As for what a good current price would be, each area is different. That said, if you can find a few comparable homes that sold before the bubble started (1999-2000ish) and adjust their prices using an online inflation calculator, you'll at least have some idea of where prices MAY be headed, based on traditional, non-bubble appreciation.

FYI, Redfin also shows history on list price to sales price ratios going back about two years in the "stats" area, as well as current inventory levels and sales rate (the sales figure represents the total number of homes sold in the last 90 days).

Lastly, check out Real Estate Statistics | Altos Research for realtime trends and stats.

Good luck.

[cubfan3]

Thanks for the advice everyone...I do have a good agent, but I also like to get unbiased personal experiences from people who were in my position, and have no skin in the game, to supplement those opinions.

cohdane, by sheer coincidence I actually stumbled across redfin.com just an hour or so before you posted that. It's a great site for sure. It's already dug up better comparables than what Trulia cranked out for me (or perhaps it just made them easier to find).

[middle-aged mom]

The amount and duration of unsold inventory is what determines local market trends.