Made An Offer On Home In Raquet Club

Hi All,

I found a home, made an offer, but I have to say the "buying" experience is, well, uniquely different. The home on the market was clearly overpriced; it's definitely a "fixer upper". I asked for comps... :) People in heck can ask for ice water too... hahaha. I explained that I wouldn't mind making an offer but the owners may consider my offer an insult. The home across the street from the home I'm interested in sold 3 or 4 months and was being remodeled so I asked for details. I got the "comp" and I have to admit the agency was very kind and got an appraisal for the home I'm interested in; they are also the listing agency. It appraised for about $70,000 less than asking price; I wasn't surprised. I viewed another home, same asking price, that was in good condition. The owners started out asking $200,000 more than it's current "reduced" price. Once the agent realized I buy on logic and "real numbers", and this would not be an emotional purchase, she was onboard with where I was coming from. I'm not trying to low ball, but I don't want to be screwed over.

I had the home inspected by a licensed architect/contractor and also got a "ball park" figure for the complete remodel. Not surprisingly, the electrical is substandard (dangerous IMHO), the plumbing is galvanized and needs replacing, and the cistern has damaged interior walls. Got a price on those repairs, and a separate price on all the cosmetic changes I would like. I made a very reasonable offer based on the inspection, the cost to repair, and the appraisal. The offer is still $115,000 below list so we shall see.

Good luck! ????

SunshineyDay wrote:Good luck!  ????

Hahahaha.  Yes.  Facts and figures...  I'm not expecting miracles.  Maybe when it sits for a year the owner will come around.  Owners (and I'm one) always think their home is better than others and worth more.  We get attached and think everyone else will feel the same way.  Unfortunately we find out they don't.  It's based on numbers.  Buyers ask; what can I buy at the same price? not; what does the owner think it's worth?  The home that was listed at the same price as the one I made an offer on has been on the market more than 19 months, and they have reduced by $200,000.

Yep some people price their home around what they paid for it 10 years ago when prices were sky high plus add on a profit. 2008 to 2012 prices dropped 50% or more. They just started to recover a couple of years ago. Probably up 20% to 30% from the bottom of 2012.

CanuckBob wrote:Yep some people price their home around what they paid for it 10 years ago when prices were sky high plus add on a profit. 2008 to 2012 prices dropped 50% or more. They just started to recover a couple of years ago. Probably up 20% to 30% from the bottom of 2012.

Yes, everyone took a hit. People don't understand, or we don't want to understand. Probably more the latter than former.

If you have to upgrade both electrical and plumbing you may be in for a shock... I would get two or three estimates from known local contractors with good reputations... If floors need digging up there is tile replacement. Is the roof solid? Another possible expense...

Buying a fixer-upper here is no different than NOB... The cost of repair is normally twice the cost of new build because of the unknowns...

My dos centavos

I respectfully disagree with the statement that "the cost of repair is normally twice the cost of new build". Been there, done that. There is no way my old casa's repairs would begin to approach the cost of building the same square footage new.
The price of getting competent plumbers, electricians and other craftsmen is way lower than it is in the States.

I'd beware of any contractor who advertises his services in the local magazine or newspapers. The best ones are very busy with work they get through referrals from satisfied customers.

If the OP needs a reference to a good crew, especially for plumbing and electrical work, PM me.

I do agree that when doing renos there is always the unknowns and they usually cost 25% to 50% more than estimated. I am currently redoing a patio roof on one of my casitas and what were thought to be good solid beams turn out to be infested with termites. That just added another $8800 pesos to the job.

I don't think tbeck3579 is in any imminent danger.

tbeck3579 wrote:The offer is still $115,000 below list so we shall see.  

Guess it depends on the asking price. $115k under asking isn't bad on a 1.1 mil house.........

Good luck. Don't let them haggle you at the last minute on extras costs. Don't be afraid to get up and walk. They will call you back. HOME SALES ARENT THAT EASY NOW. THEY ARE LUCKy FOR A GOOD OFFER.

You have to be tough at closing. Beware of the Realtor, they always have little ways of taking on costs or charges.
You can always talk another day......hang tough!!!! and don't trust anybody except yourself.
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CanuckBob wrote:Guess it depends on the asking price. $115k under asking isn't bad on a 1.1 mil house.........

On the other hand, the seller might choke on it if the asking price is in the 4 to 5 hundred k. range.

Tis true however the market is good right now so anything listed for more than 180 days probably isn't priced right or has some major failings.

A real estate expert once told me never fall in love with a property, it will end up costing you more than a divorce.
These old houses are a real pain to maintain. Always some minor thing and it is hard to find reliable house fixers.

Maintenance on an older place should definitely be a concern for those unable to repair/maintain the minor things on their own or have the $$$$ to continually hire someone. The quality of construction on these older places is dismal. I've seen plumbing and electrical that would be criminal NOB.

Remember that when you want to sell, it will not be an easy place to unload in that price range.

You have some bargaining chips also
Ask that they pay the first years insurance
Ask they provide a first class survey not a tape measure survey. This is most important.
Ask for them to pay for a mechanical/engineering inspection. This is a must as mentioned above r3grdimg maintaining your new home.

Thanks everyone for the information. I'm busy with "house stuff" so I apologize for not responding to your individual posts. Yes, "fixer uppers" always remind me of the movie "Money Pit". The movie was funny, but many truisms prevailed in the humor. I'm speculating, but if it appraised for 70 grand less than asking price that will give the owners pause, and understanding the home needs new plumbing, electric, cistern and the costs associated with tearing up the floors and walls should also give them pause. Still, it may sit on the market for a year or more before the "pause" leads them to the reality and action. I'm guessing it will need a new a new roof too so I'm not done haggling either...

The "build new" mantra will always be prevalent in reno discussions and there is some weight to the argument depending on the home and location. The original owners of the early 70's home had pics of foundation build so I know it was done correctly with rebar. It's a matter of numbers; the lot is a premium lot and it would sell for 150,000 to 250,000 and the house has "good bones" so, no, you could not build new at a lower price. The RE agency knows the owners overpriced their home, but I'm just not sure how long it will take for the owners to realize they overpriced their home. The home is dated and ugly so I'm not worried about my offer or their response.

I do need to get a licensed architect/contractor. The one I chose to do the initial bid/inspection is someone I've decided I probably won't use... Wanted 40,000 up front... RED FLAG. So, if by some miracle I work out the price I hope y'all won't mind if I bother you for some names :)

I can't understand why RE agents even take listings that they know are vastly overpriced. There is a significant cost to advertise and show these homes for years on end. In today's market anything over 180 days should be a red flag for any potential buyer.

Just something I giggled to myself over; the home has electrical outlets with grounds, but it is wired with a + and - but no ground wire! LOL Just wondering why anyone didn't say hey, what's the third screw for on this electrical outlet? hahahaha

CanuckBob wrote:I can't understand why RE agents even take listings that they know are vastly overpriced. There is a significant cost to advertise and show these homes for years on end. In today's market anything over 180 days should be a red flag for any potential buyer.

Look at the house that has been reduced by 200,000 and on the market for 19 months... whoa... I suspect the only "advertising" is on the Chapala MLS. MLS stateside is expensive, but I suspect it is nominally priced here???

Seems to me that if the buyer is lowballing in the offer, it's a bit much to ask for the first years' insurance along with all the other items mentioned.
The question is: Is the owner in [b]need[b] of selling or is the owner sitting in the house comfortably waiting to sell at his asking price. If it's the latter.....good luck in getting a huge discount. It's best to have a few alternatives to move on to.
When I was living in a recently built house in SMA and found that the altitude was too high for my health, I put it up for sale at a reasonable price. I found a buyer who was willing to pay my price who had a house already "sold", with some simple contingencies. I foolishly went ahead and came to Lakeside and bought this house. However, the economy collapsed in 2008 and my contingency buyer's house sale collapsed along with it. Yikes!

You can believe that I was then very open to any half-decent offer. Not a good position to find oneself in, and I didn't do well on the sale. Had I been living in the house under no pressure while it was looking good and well located, I'd have just bided my time waiting for a good offer. Makes all the difference in the world.

tbeck3579 wrote:Just something I giggled to myself over; the home has electrical outlets with grounds, but it is wired with a + and - but no ground wire!  LOL  Just wondering why anyone didn't say hey, what's the third screw for on this electrical outlet?  hahahaha

Granted that electricians work for much less here than in the states.......are you SURE you want to tackle this house? Once they start tearing into the walls, a world of dust will be in the air to breathe. That's the problem with these brick and cement houses.

gringal wrote:Seems to me that if the buyer is lowballing in the offer, it's a bit much to ask for the first years' insurance along with all the other items mentioned.
The question is:  Is the owner in [b]need[b] of selling or is the owner sitting in the house comfortably waiting to sell at his asking price.  If it's the latter.....good luck in getting a huge discount.  It's best to have a few alternatives to move on to.
When I was living in a recently built house in SMA and found that the altitude was too high for my health, I put it up for sale at a reasonable price. I found a buyer who was willing to pay my price who had a house already "sold", with some simple contingencies.  I foolishly went ahead and came to Lakeside and bought this house.  However, the economy collapsed in 2008 and my contingency buyer's house sale collapsed along with it. Yikes!

You can believe that I was then very open to any half-decent offer.  Not a good position to find oneself in, and I didn't do well on the sale.  Had I been living in the house under no pressure while it was looking good and well located, I'd have just bided my time waiting for a good offer.  Makes all the difference in the world.

Sorry that happened to you. It would leave a bitter taste in my mouth too. BTW, my off is NOT a low ball offer, TYVM.

gringal wrote:

tbeck3579 wrote:Just something I giggled to myself over; the home has electrical outlets with grounds, but it is wired with a + and - but no ground wire!  LOL  Just wondering why anyone didn't say hey, what's the third screw for on this electrical outlet?  hahahaha

Granted that electricians work for much less here than in the states.......are you SURE you want to tackle this house?  Once they start tearing into the walls, a world of dust will be in the air to breathe.  That's the problem with these brick and cement houses.

No way I'm living in that house while they are remodeling it. The nice thing about a reno is I can have what I like, not live with what someone else thought was/is the cats meow. I can put a kitchen in that suits the way I cook, storage that suits the way I store, and so on... Is it a PITA, absolutely hehehehe

doc holiday wrote:Remember that when you want to sell, it will not be an easy place to unload in that price range.

You have some bargaining chips also
  Ask that they pay the first years insurance
  Ask they provide a first class survey not a tape measure survey.  This is most important.
  Ask for them to pay for a mechanical/engineering inspection.  This is a must as mentioned above r3grdimg maintaining your new home.

Fortunately it is the original owner and I've been lead to believe the blueprints are available.  It doesn't get better than that.  Yes, I do believe there are still areas to iron out and bargain with.  The owners weren't into maintaining the very expensive home they built.  If you don't maintain things they aren't worth a dime.  Stripping it down to bare walls and starting over is the only alternative here.