Are sellers negotiating in the $250-650k price range?

I had a client ask me this today, and I figured I'd share the response with my other clients and viewers:

"As far as prices are considered and flexibility through negotiation, the price range you are looking in is by far where we have been and are still seeing the most activity. Low inventory levels and high buyer demand for that price range are making negotiation options limited. Sample scenario: 3/2 tract home in Goleta, REO for $500-550k, probably a 75% chance it will sell within 72 hours with multiple offers and at least asking price, if not more. Best case scenario if you want movement on the price through negotiation is to find a property that has been on the market for a while (like Juana Maria) and then negotiation can really come into play. For the few REO's that stay on the market longer that 2-3 weeks, the banks will move some on their prices, but best case scenario is often to negotiate less aggressively (ask for less of a discount) and they are more likely to just accept offer, rather than counter back and forth. With traditional sellers I am a strong advocate of firmer negotiation and countering back and forth to really get the best deal, that strategy just doesn't seem to work as well with the REO's. They want good clean offers, strong financial qualifications, buyers who will take property "As-is" and not ask for repairs, and shorter escrows. We can talk more about this if we find you a property you'd like to move forward on. Each negotiation is case specific so I can only give you general answers at this point.

If any of you want to discuss this further, feel free to give me a call at 805-637-7148.

Calculating Property Taxes

I often get asked what property taxes for a given property...

A good rule of thumb to calculate property taxes in the Santa Barbara area is to take the sales price and multiple it by 1.125%. That will give you an estimate on your yearly property tax figure, then you can divide by 12 to see what that looks like per month. So factoring a $1 million sales price, your property taxes would be around $11,250 per year or $937.50/month if you wanted to look at how it will affect your monthly payments.

The property tax figure is not listed on a property sheet, because the sales price is as of yet, unknown. The current owner pays property taxes based on what he or she purchased it for, and if they have owned it a long time, they may be paying taxes based on a $200-300k purchase price instead of a $1 million purchase price.