Home price question (Huntsville, Madison, Albertville: sales, rental, house prices)

[Surge0001]

Originally Posted by RocketDawg

I suppose my question is - in the case Lindy's $220K asking and actual selling of $265K (and similar situations) - why not just ask $265K in the first place? It looks like most houses, maybe all, are selling for more than asking, so just go ahead and set the price higher to begin with? Or is it all part of the game?

Keep in mind that I'm no economist or realtor, just an engineer, so may not have a clue whether this would be the right approach. I think I took a credit course in engineering economics at some point many years ago though ....

Yea, I'm an engineer too, (or rather, soon to be). I just recently got into realty as a little side hobby when I'm not doing work or other hobbies. I may be wrong since I'm not an actual realtor. I get the impression that it's an actual bid war (such as the show Storage Wars or an auction house) where you start off with a base bid (in this case $220k) and a group of people just bid until everyone else opts out. OR, it's like how government contract work and it's all blind bids with a minimum of 220k and whoever gives the highest bid gets the house. I have a feeling that it's the latter as that would be easier

[dwhisent]

Yeah, pretty much blind bidding. The seller realtor is not allowed to reveal the other bids. You just have to kinda guess what the other offers will be, and you do know whether there are multiple bids. My realtor said she believed what clinched my winning was that I did not put in a contingency that the house appraise for the amount, which was not a problem for me. Note, I did NOT waive the inspection, as I have heard some do.

[RocketDawg]

Originally Posted by Surge0001

Yea, I'm an engineer too, (or rather, soon to be). I just recently got into realty as a little side hobby when I'm not doing work or other hobbies. I may be wrong since I'm not an actual realtor. I get the impression that it's an actual bid war (such as the show Storage Wars or an auction house) where you start off with a base bid (in this case $220k) and a group of people just bid until everyone else opts out. OR, it's like how government contract work and it's all blind bids with a minimum of 220k and whoever gives the highest bid gets the house. I have a feeling that it's the latter as that would be easier

Make sense. So it's basically a reserve price in an auction. You still would think there would be a little better estimate of true market value, and what people will likely bid, and then set the base price, or reserve, higher. I suppose you might hit the point where the reserve might not be met, but you could always try to sell later on a bit lower. I suppose it doesn't really matter as long as the homeowner gets what he wants and more out of the sale.

[lindy112]

Originally Posted by RocketDawg

I suppose my question is - in the case Lindy's $220K asking and actual selling of $265K (and similar situations) - why not just ask $265K in the first place? It looks like most houses, maybe all, are selling for more than asking, so just go ahead and set the price higher to begin with? Or is it all part of the game?

My current listing plan is to look at the comps and price the house slightly above those. My example house (asking $220K, sold for $265K) was priced appropriately for the neighborhood but our inventory is so low (only 346 houses currently for sale in all of Madison County), we ended up with 16 offers, including 10 with escalation clauses. We actually had an offer for more than $265K but the potential buyer wouldn't waive the appraisal contingency. It's a stressful market for everyone, including sellers, who are afraid they're not picking the best offer. I normally put together a spreadsheet to show all the different offer scenarios: required home inspection vs no home inspection, closing cost help vs no closing cost help, if the buyer is willing to waive the appraisal contingency, does he/she actually have the cash to make up the difference between the sales price and the appraised value, is the buyer using a local lender or an internet lender, etc.

[RocketDawg]

Originally Posted by lindy112

My current listing plan is to look at the comps and price the house slightly above those. My example house (asking $220K, sold for $265K) was priced appropriately for the neighborhood but our inventory is so low (only 346 houses currently for sale in all of Madison County), we ended up with 16 offers, including 10 with escalation clauses. We actually had an offer for more than $265K but the potential buyer wouldn't waive the appraisal contingency. It's a stressful market for everyone, including sellers, who are afraid they're not picking the best offer. I normally put together a spreadsheet to show all the different offer scenarios: required home inspection vs no home inspection, closing cost help vs no closing cost help, if the buyer is willing to waive the appraisal contingency, does he/she actually have the cash to make up the difference between the sales price and the appraised value, is the buyer using a local lender or an internet lender, etc.

Wow - that's less than 1 house for sale per current 1,000 residents. And new folks coming in all the time (do you know how many new residents per month are moving in?).

Sounds like you're doing your job and doing it well. I'll know who to get in touch with if I ever want to sell. I wish now that 31 years ago we'd at least have built a house with the master bedroom on the first floor, but you don't think about things like that when you're young. Can always install an elevator I suppose.

[RocketDawg]

Originally Posted by Surge0001

Yea, I'm an engineer too, (or rather, soon to be). I just recently got into realty as a little side hobby when I'm not doing work or other hobbies. I may be wrong since I'm not an actual realtor. I get the impression that it's an actual bid war (such as the show Storage Wars or an auction house) where you start off with a base bid (in this case $220k) and a group of people just bid until everyone else opts out. OR, it's like how government contract work and it's all blind bids with a minimum of 220k and whoever gives the highest bid gets the house. I have a feeling that it's the latter as that would be easier

When you get your degree, are you moving up this way? It's a great place to live, but totally different from Mobile.

[AU HSV]

Originally Posted by RocketDawg

Wow - that's less than 1 house for sale per current 1,000 residents. And new folks coming in all the time (do you know how many new residents per month are moving in?).

Sounds like you're doing your job and doing it well. I'll know who to get in touch with if I ever want to sell. I wish now that 31 years ago we'd at least have built a house with the master bedroom on the first floor, but you don't think about things like that when you're young. Can always install an elevator I suppose.

the city has said approximately 100 new residents a WEEK

[RocketDawg]

Originally Posted by AU HSV

the city has said approximately 100 new residents a WEEK

Well, that explains all the new apartment housing construction, even with building materials being sky high (read a few days ago from someone who should know that a sheet of OSB now sells for about $70; looked at the Home Depot site and a pine stud is $8 plus tax).

[Surge0001]

Originally Posted by RocketDawg

When you get your degree, are you moving up this way? It's a great place to live, but totally different from Mobile.

My goal is Mobile, but I'd settle for Huntsville, really only 2 areas I would have good chance of finding a job in the State. Both have good concentrations of Chemical Engineering jobs

[pathrunner]

I grew up in the 50's and 60's in Southern California when it was absolute paradise. No freeways, no logjams stuck for hours in a car, low population, no pollution, no sprawl, no cheap clap-trap housing, respectful people. I used to hear my parents talk about the "dog eat dog world." Little did they know what would eventually happen when it REALLY became that way only 20-30 yrs later.

I'm concerned that Huntsville is growing too fast for my taste. I love the small city of Huntsville and the small town atmosphere of where I live, even though things aren't nearly as readily available and stocking of the local stores sucks a lot of the time. I've already seen traffic increase on the 231, only been here six months.

Met a young couple at the dog park, they moved here 9 months ago. They looked at a house, it was $100K. They decided to wait to buy. Now regretting it. That same house is now valued at $200K. They are kicking themselves. Sellers love it though. My advice to the OP, buy as soon as you can.