How Low Can I Go? or The Difference Between Writers and Buyers

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

"How low can I go?" Haven't we all heard that question? How many times I would send information to customers about the least expensive properties in their price range, only to get back an e-mail saying that the market is down and they do not even think of offering anything close to the asking price.

Aliki Condominiums in Daytona BeachHow low can you go? The legend is that in Florida you buy for 50 cents on a dollar, so some «investors» are trying to offer not more than 50% of the asking price. They ignore that asking prices are already 50-60 cents on a dollar compared with prices just a few years ago.

So, here is how it is in real life. Here is a real list of condominium units sold in Aliki Condominium and Ocean Ritz Condominium in Daytona Beach in 2010 and 2011. It is arranged by the sold price.

I added the column showing the difference between the asking and sold prices. So, if it is 94%, it means that buyers paid 6% less than the asking price.

As you see, the average actual price was 92.6% of the average asking price. I excluded the penthouse, as it could create a false feeling that this gap is even narrower, but it was a two level penthouse unit and it was sold for way more than the asking price.

And if the actual sale price was 92.6%of the asking price for condos on Daytona's Beachside (and keep in mind that this number can be different for homes, and be different for different neighborhoods), than it means that you have on average a good chance to buy a property with a 7.4% discount.

Aliki Condominiums in Daytona BeachSo, how low can you go on this $200,000 condo? On average $185,200. So, what is a good starting offering price would be? Maybe about $180K. But what if you want to write an offer for $150,000?

Maybe you are a writer, not a buyer. Writing offers can be fun, but the difference between a writer and a buyer is that a writer creates a fictional reality, while the Buyer understands the «real» reality. Of those two it is the Buyer, who buys a house.

Writers live in the castles of their dreams... Of course, those castles are very nice and exquisite...

Aliki Condominiums in Daytona Beach

photo of Jon Zolsky

Buyers, call me 386-405-4408. Reality is good for you now. As good as prices. Not only in Aliki and Ocean Ritz Condominiums in Daytona Beach.

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Topic:
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Condos, What you need to know?
Condo Specialists
Advice for Buyers
31 Days of May Challenge 2011
Tags:
daytona condos
aliki
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Rainmaker
235,288
Vadim Zolotarevskiy
FunCoast Realty & Management, LLC - Daytona Beach Shores, FL

Don't we hear this question all the time? Or a varinat like this "I am buying for cash, so I am offering 50% of the asking price"

May 10, 2011 12:45 PM #2
Rainer
38,823
I Pike
Ormond Beach, FL

Jon,

It is a misconception that 50 cents on a dollar is all you need to buy. It is not 50 cents on a dollar when you look at the asking price today, It is usually compared to the peak price of 2006

May 10, 2011 12:50 PM #3
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Barbara - we usually have both, but it  is the ratio that's important (LOL)

May 10, 2011 12:58 PM #4
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Vadim - there is a bunch of variations, but the  main tune is that "you gotta give it me, because I am deserving"

May 10, 2011 12:59 PM #5
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Inga - this is true, thank you

May 10, 2011 01:00 PM #6
Rainer
208,202
Tracie Cope
Granville, Newark, Heath, Buckeye Lake & all of Central Ohio - Granville, OH
ReMax 360 - www.LCountyHomes.com

I work mostly with buyers and I've written a lot of offers that were obviously not going anywhere.  Sometimes I think buyers need to lose out on something they really wanted before they get serious. 

May 10, 2011 01:01 PM #7
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Tracie - tis is very true. I am writing an offer, and I know that it  is not going to win, but the buyers would not trust me at the beginning and try to do it their way. Only then they start listening. Thank you for the  comment

May 10, 2011 01:08 PM #8
Rainmaker
1,792,171
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

Yes Jon, i've really done my due with the buyers who are just writers or 'figment' their buy in their big heads...understand that the agent is giving you a real idea what to bid..listen..good post

May 10, 2011 01:17 PM #9
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Kathy Schowe
California Lifestyle Realty - La Quinta, CA
La Quinta, California 760-333-8886

Well done Jon, I've learned so much on AR... I just did a post featuring my favorite bloggers!  You are right there!  Thank YOU!  Kathy

May 10, 2011 02:45 PM #10
Rainmaker
752,416
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

I really love this post. It gives consumers a very realistic ballpark to work with. Suggested.

May 10, 2011 03:11 PM #11
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Ginny - Tracie is right, there are customers that come and dictate us what to do. It take a little time, and maybe losing a deal, before they become more trusting and more realistic towards what they can do

May 10, 2011 04:02 PM #12
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Kathy - thanks. Folowed the link to your collage, didn't find myself, but it does not matter. It is cool

May 10, 2011 04:04 PM #13
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Jill - thank you. Some buyers look at that number and they do not like it, and it is not a surprise. People do not like seeing what they do not want to see.

May 10, 2011 04:06 PM #14
Rainmaker
346,007
Jenny Kotulak
RE/MAX Real Estate Centre Inc., Brokerage - Oakville, ON
Broker - Oakville Ontario Real Estate

Well said Jon.  Tell them all to buy and leave the writing to you lol.  I just had to have this conversation with a buyer the other day who wanted to come in with a very low price just days after the home was listed.  Not even worth doing up the paperwork.

May 10, 2011 04:46 PM #15
Rainer
225,278
Kirsten Lindquist
Pacific Union International - Sonoma, CA
Realtor - Sonoma Wine Country

Excellent advice Jon for novices and "seasoned" buyers, too.  Would love to hear how your data-based approach plays with your buyers in the coming weeks.  I suspect the low ball offers will continue.

May 10, 2011 04:46 PM #16
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Jenny - for me it is worth, because that is how we start building a relationship. I do what they tell me, but I am giving mu opinion of what is going to be the reaction, and when it happens pretty much the way I predicted, and they miss on a good opportunity, that how the trust is built.

At least with some of my customers

May 10, 2011 05:13 PM #17
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Kristen - it is a learning experience to me as well as to my customers. I learn the numbers and it helps me to make better predictions.

Of course, the volume of low ball offers will not slow down, and of course, we will have to deal with it. thank you for  the comment

May 10, 2011 05:15 PM #18
Rainmaker
4,797,261
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I like your term 'writer'.  They know it's a good time to buy, but they want that 'incredible' deal.  If they make a real low ball offer and it's some how accepted, they will probably back out because they think they are paying too much.

May 11, 2011 12:39 AM #19
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Gabe - yes, because it is an elusive "deal" they are after. If they do not feel that they steal, no deal.

May 11, 2011 01:28 AM #20
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