John wrote:
[snip]
- quote -

Some property now on the market was purchased for speculative purposes
- or perhaps I should be precise, and use the word "flipping". It
doesn't make sense to lose what is clearly a good deal by acting
arrogantly or foolishly, but some sellers were in the market purely for
"the flip" and may have bought several properties. Some may have tried
to back out of their contracts with the developers - when the
realization set in that they were losing tens of thousands in payments
every month. In the meantime, those guys may well have squeezed out a
young couple who were hoping for a home.

"Flippers" are not in it for a win-win, and are becoming unpopular *in
some sectors* on the perception that the economic damage they cause
exceeds the economic value. IPO flippers are not popular, and I believe
real-estate flippers are not popular, either.

Take a look at the historic market appreciation trend, and adjust it
for the local conditions, to give you a ballpark of what prices should
be. Find out how long properties have been sitting unsold. Then try to
find what the financial problem you are "solving" is, and how big it
is, and when you see that, you will have some idea what the seller
should be willing to accept. Depending on how much they are asking
above what will get them out, under-bid by that same amount, leaving
some room to come up a little.

IMHO we're just at the beginning of a real estate bubble bust, and
should wait until prices decline by 40%, as they did in some areas out
West when the last bubble burst, and people simply walked away from
negative equity. I'm renting a place just down the block from a condo
that now has at least 30 units for sale (in part because a new
high-rise condo is going up next door to them, but also in part because
speculators realize prices are not going higher). I would expect that
current asked prices will not hold, and will be lower next year.

There are always motivated sellers in any market (bear or bull)

Paying less than retail or obtaining concessions on other aspects of
the transaction should be standard. In a bear market you can get a
bigger discount or better concessions.

Hence it makes sense to view the cash as more valuable than the
property and negotiate hard. Come way with a deal that you can be happy
with. It does not mean you have to make the seller suffer. Your cash
can buy any property. They only have one to sell. When your cash is
worth more to them than their property they will do the deal and feel
they has a win-win situation. You solved some larger problem for them
by doing the trade.

John Corey

"Don" <dwzimm[at]telus.net> wrote in message
- quote -

Standard Purchase Agreement used by realtors in this area (Hampton Roads)
requires that information. As a seller you would consider the buyer's
source of funds in deciding which contract offer to accept assuming you get
more than one offer to buy. For example, if you had two offers to buy at
approximately the same price - one for all cash and one where the buyer is
getting a mortgage - the all cash offer looks like the best deal. There
could be complications in the mortgage approval process even with
pre-approvals and VA mortgages.

On Fri, 25 Aug 2006 02:22:33 -0500, "dapperdobbs"
<GeorgeCFL[at]hotmail.com> wrote:

- quote -

I wonder though, does a seller necessarily know where the buyer's
money is coming from if there is no financing contingency in the offer
of purchase and sale? I can't recall ever knowing about that until the
actual closing date when the source of the funds is spelled out in the
closing documents.

beliavsky[at]aol.com wrote:
- quote -

Heck, yeah.

- quote -

Wave a certified check under his nose until salivation commences. (The
seller receives cash whether you take a mortgage or not. I've wondered
why there is not more leverage to a cash buy. Seems there should be.
The best I can offer is that seller doesn't have to wait for your
mortgage approval.)

On Thu, 24 Aug 2006 03:56:46 -0500, Charlie <charlie[at]comcast.comwrote:

- quote -

That is all excellent advice, but come to think of it, I don't see any
reason why the same advice doesn't apply to buying a house as an
investment, if not more so!

Buying a house and buying a car for regular personal use, that is, not
as an "investment" or as a showpiece probably have some things in
common. Salesmen for both like to use razzle-dazzle and tricks to get
the prospective buyer to jump on too high an offer. To buy a car, I
will repeat what an old salesman- a friend- said. Go to the sales lot
where you want to buy. Do this 6 weeks or 2 months before you are ready
to actually put your money on the table. Find a car you like. Leave.
Go to another lot you might buy from. Find another car. Find a third
car somewhere else. Do not make a secret of your time frame or that
there are other places you are looking. About once a week stop by each
dealer and look at the car you want. If one car actually sells, find
another. There is really little difference between any of those chunks
of steel and plastic anyway. They are just tools. A house in any
neighborhood you consider acceptable is just shelter from the wind and
rain. After a few weeks the salesmen will become desperate to make the
sale, and if you are nice but mainly firm and sane they will treat you
well, they will increasingly give a better deal. A salesman who cannot
deal with it all and becomes abusive is not worth your time. Pick
another dealer or agency as a place to look for the new car or house.
Finally, even when you get to the point of buying, carefully go over
everything. Expensive options can be deleted. Things you do not want
or like or are unwilling to pay for can be deleted. Try it. Be firm,
they are not your friend. They are trying every trick known to mankind
to take advantage of you, to take as much of your money as they can.

On Wed, 23 Aug 2006 07:22:27 -0500, beliavsky[at]aol.com wrote:

- quote -

Spend a lot of time researching the housing market in the area before
approaching anyone concerning your intention to buy. If you find
something you like after looking around a lot, call the listing agent
and say, "Please show me xxxxxxx." If that one turns out to be
unsuitable and the agent then asks "Can I show you something else?"
say "No thanks" and be gone. Continue looking on your own. When you
find something you want, you will be in a strong position because of
your all-cash or mostly cash offer. Negotiate. While negotiating with
the seller, don't overlook your strong position with lenders. If you
need only a relatively small mortgage, don't take the first one that
comes along, but shop around. Personally I still see myself as a pure
wet-behind-the-ears amateur in these matters, but still the above
methods have served me well in a few house purchases over the years.

There is a story in the Wall Street Journal

After the Boom
Housing Slump Proves Painful
For Some Owners and Builders
'Hard Landing' on the Coasts
Jolts Those Who Must Sell;
Ms. Guth Tries an Auction
'We're Preparing for the Worst'
By JAMES R. HAGERTY and MICHAEL CORKERY
August 23, 2006; Page A1

about falling house prices in some areas. The article gives an example
of a woman getting a good deal on a house by bidding less than the
seller's stated minimum price at an auction and later raising her offer
slightly. I wonder if this is a good tactic in general for getting a
good deal on a house in a bear market.

I should be able to pay for my next house in cash or mostly with cash.
What is the best way to exploit this? I am looking for a home, not an
investment opportunity.