I started writing a post last week about real estate websites. The title was going to be something like, “10 Good Real Estate Web Sites,” but I got stuck on about #3 before I had to run off and show more houses. Then I came across this article over on Inman News and I didn’t feel so bad about not being able to get to #4. After looking at the first 100 results returned by Google when searching the term “real estate,” the author says that all 100 websites came up short. What were they lacking?

…and he’s not gonna take it anymore! Mr. Nielsen is a local builder, who, according to the Knoxville MLS, currently has 5 homes for sale in Saddle Ridge in Farragut. I got a mass email sent out by Jan the Builder today and he’s not happy about what the media is saying about home prices:

“I am sending this message out of frustration with articles in the media telling us that home prices are down and going further down. Nothing could be further from the truth here in Knoxville.The News- Sentinel, and other media, report prices DOWN over 8% for 2007, but this is based on the Case-Schiller index which measures only the 20 largest metropolitan areas.On the contrary, the OFHEO, which is HUD’s office measuring same house sales across the nation, reports that Knoxville had an average appreciation rate of 5.8% UP for 2007.Furthermore, Tennessee was UP (4.1%), our East South Central region was up (4.1%), and the nation was up (0.8%) for all transactions (includes appraisals for refinancing.) You would never guess that 2 out of 3 states reported positive appreciation rates in 2007.You can check this yourselves by visiting ofheo.gov. I bring it to your attention because everyone should know that prices are continuing to go up, not down, in Knoxville.”

OFHEO, for the uninitiated, is the Office of Federal Housing Enterprise Oversight. When I actually have time to breathe, I’m going to check out Mr. Nielsen’s numbers.

I did have time to check out the House Price Calculator located on their website. According to this nifty tool, my home, which I bought 2nd quarter ‘06, had a little more than 8% appreciation by 4th quarter ‘08. I’ll take it!

According to Property Scope, the mixed used town center project, Downtown at Farragut, is moving forward:

“Developer Michael Bates said his firm expects to buy the property and break ground on the site within two months.

The project is slated for 68 acres on Kingston Pike between the Town Hall and Kohl’s, land that is currently owned by the family of Farragut mayor Eddy Ford. Bates’ plan calls for a town square surrounded by more than 175,000 square feet of retail/dining/entertainment space and 150,000 square feet of offices. Loft residences would be located on upper floors of the buildings.”

Check out the rest of the article-

Downtown at Farragut update - Property Scope

Most homeowners in our area know they have to fill out a Property Condition Disclosure form when they are selling their home. And most people know that they are supposed to disclose any adverse facts about the home’s physical structure, such as a past water leak or a problem with the foundation.

1. Whether anyone who has ever lived in the home was infected by the HIV virus or “other disease which has been determined by medical evidence tobe highly unlikely to be transmitted through the occupancy of a dwellingplace.”
2. If a felony occurred on a the property.
3. If a suicide occurred on the property.
4. If a homicide occurred on the property.

Oh, and rumor has it that we also do not have to disclose whether or not a home is haunted. Boo!

Could you describe Knoxville in just six words?

Lowball offers are the new black. Every time I go to the office, I hear another horror story about someone’s client who insisted on submitting an obscenely low offer on a home, because said client has heard about how horrible the real estate market is. 9 times out of 10, two things are going to happen in this scenario:

1. Seller counters back at near listing price, offended by the lowball offer.

2. Seller rejects offer outright, offended by the lowball offer.

And a lot of times the buyer winds up losing the house either because someone else submits a reasonable offer, or because negotiations break down due to seller’s aforementioned offense at low ball offer.

I blame all this lowballing on the media hype over “the national real estate market.” The fact that there is no national real estate market escapes these people’s notice (more on that later). Buyers think that the collapsing “national market” means they are going to steal houses in Knoxville.

As I’ve said here before, just because every business pundit on every news channel in the country is saying the real estate sky is falling, that does not mean that it’s falling over Knoxville. Yes, we’re in a buyer’s market and buyers can definitely get away with asking for more concessions now than they could a few years ago. And that’s a great thing for all you buyers out there. But with few exceptions, you’re not going to get that $250,000 home for $200,000. Really, you’re not. Sellers in some parts of the country may be desperate to sell, but most sellers here aren’t. They’re just really anxious to sell and there’s a big difference between those two.

Having said all that, the lowball offer definitely does not have it’s propert time and place. But let’s start off by looking at where and when it is not a good idea:

• You really want the house.
• You’re doing it “just to see” if you can get it, even though the comps and condition do not support a number anywhere near what you’re asking.
• You want/need a lot of concessions from the seller.
• Your agent has strongly advised against it, knowing that you really want the house and/or the comps & condition don’t support it.

If any of the above is true, you can stop reading this post and go make a reasonable offer.

If you’re still in the running to lowball, you need to find out a few things. Ask yourself and/or your agent the following questions:

• Is the home overpriced?

Or maybe even grossly overpriced? Your agent can pull comps for you and help you find this out. If it is, your lowball offer is not really a lowball offer at all - it’s a reality check for the seller

• Is the house falling apart, but is priced as though it’s not?

Market comps ususally assume a home is in market ready condition. If the seller has priced his home at market, but the roof is falling in and it’s 1972 inside, a lower offer might be justified.

• How long has the property been on the market?

The current listing sheet may say the home has only been on the market 30 days. But a quick look in the MLS may show you that this is the 3rd time the home has been listed, and all told, it’s been on the market for over a year. Longer time on the market means more negotiating power for the buyer.

• Is the property vacant?

Has it been that way for a while? Nobody likes to have a house sitting empty, epecially when the house is in Knoxville and they are in Honolulu. Insurance companies don’t like it either. And nobody likes making two mortgage payments.

• Is the seller motivated?

This is something you can’t always know up front. But if you somehow find out the seller is getting divorced/about to go bankrupt and has to move that property, stat, then strike while the iron’s hot.

• Are you hoping/needing concessions in the contract?

I mentioned this before, but it bears repeating. This is a can’t have your cake and eat it too thing. If you need the seller to pay closing costs or pay for repairs up front, lowball is probably not the way to go. It adds insult to injury.

• Are you prepared to walk away from the house?

Repeat after me: the lowballer shall not get emotionally invested in a property. The lowballer must always be willing to walk. Lowballing is gambling, so be prepared to lose.

Ok, so you’ve asked the important questions and you have a yes answer to two or more. Now you want to lowball! Slow down, grasshopper. You have one, last very important task to complete -

Find out what the seller owes on the property.

It is very rare that a seller is able to afford to write a check at the closing table, much less agree to do it. In some situaitons coming out even will suit the seller fine, but paying someone to buy their home will not.

Once you know what the seller owes, you and your agent can formulate your offer accordingly

At this point, I will ask you one more favor. Please, please, please, please -

Because you do have an agent, right? And he or she is a professional, correct? Real estate is their job and negotiating contracts is their bread and butter.
If you don’t trust your agent enough to listen to their advice, then maybe you should find another agent. Seriously.

Once you have your agent’s blessing, go forth and lowball. It’s apparently the hip thing to do.