Well I spoke to one of the real estate agents I had been working with in Puerto Rico. I let her know how much we were willing to offer on the property. She said she would let me know.
Of course she also mentioned that someone else was looking at the property. You can’t let that kind of stuff affect you though. If they are, fine. She might also just be telling me that to scare me. The bottom line is…I have to be comfortable with it.
I thought about going full price but I just don’t think that it is worth that much. Gut feeling kind of thing.
So now I will wait. Just wanted to give an update!
San Sebastian I hope? Congrats on taking action to live your dream. If it doesn’t go through come on back down and look at the too-many-more properties available. Having something to move to is good piece of mind but if it doesn’t go through it wasn’t meant-to-be…yet.
There are so many properties on the market there that your lower offer is the only logical way to proceed.
I have been watching realestate there for the the past year. Based on my research, almost every house is still on the market. So it is doubtful there is a purchasing rush when you want to buy.
Good luck to the both of you!
Good Luck! Will keep my fingers crossed for you guys, but as Katrina said…if it is meant to be…then it will be. I am very excited for you both.
Thanks guys!
Katrina, yes it is the property near San Sebastian. I think that one is the best for us at this time. I sure hope the seller considers and accepts the offer and like you both have said. If not? Well, we keep looking. No problems with that!
In Puerto Rico, at least on the East coast, sellers want asking price. There is very little room for negotiation, unless they have stated that they are “motivated”. They think their properties are still worth what they were worth 5 years ago. We made several offers of 10% under asking and weren’t even countered, simply turned down. The house we did buy, we got at 2% less than asking. Also, in each case, I stated we would not pay above appraised value. In 2 cases, my offer was rejected because they wanted ABOVE appraised value. The light bulb hasn’t come on for them yet. In any case, I hope your seller is motivated, and if not, there are dozens more you can offer on. — Fran. PS: Did you ever see that property I sent you the craigslist link on?
We don’t know much about the PR real estate market, and your friends have written you contrasting advice about negotiating, but there is one big gorilla in the room: location. Appraisals don’t always count when it comes to that key element, as appraisers and their employer banks rule the roost here and encourage low-ball estimates based on square footage in order to lower their exposure in any loans. A few years ago in the “casino” atmosphere created by Wall Street derivatives, banks had no exposure and in fact made more money when loans failed. No longer (I hope).
Anyway back to location. Often a buyer will stretch to find that perfect spot, tucked away, landscaped, ocean or mountain view. We have found that these properties always go for a premium regardless of what is being paid for the not – so – nice location a block (or even a few feet) away.
If you find a “site” with a house that you could see yourself building on, living for a long time, with privacy, sun exposure, quiet , room for a garden or pool or chicken coop or whatever floats your boat, be careful of being too conservative. These spots are infrequent and precious. And valuable no matter what some appraiser and bank say.
Good luck!
I agree about the ‘being too conservative’ statement Annie posted above. I think though for us it is a toss up. We could use that money to buy a few more rentals (plural). With that we could generate more income and then we would have more options. The price we offered we feel comfortable with. I think that above all else is most important.
One thing that I came to the conclusion of when I was there on this last trip was that Puerto Rico isn’t going anywhere. I think with the unemployment rate (16% or 17%) and banks tightening up sellers are more motivated. We’ve seen sellers drop $100k off their asking prices in Rincon…. That was the most drastic drop, but people are dropping if they want to sell. We’ve definitely seen a trend.
Heck from my perspective they have a real offer on the table and a done deal if they want. If not. That’s OK. Cassie and I have quite a bit of time and are happy where we are! We will keep trying.
With the “holidays” you may not hear for a bit. The holidays (which go from now until mid February are a HUGE thing. If you get tired of waiting tell your realtor you have other houses to put a bid on and you want to hear by such and such. Or lie and say you PUT a bid on another one and whichever bid is accepted is the one you will take. If the house is still there in several months put the bid in again and have a nice visit here. My guess is that the house will be there – things don’t move quickly partly because the people don’t move quickly. Our experience apparently was an exception…we lucked out!
Many sellers are in denial here. I base that on the fact that so many houses take so long to sell if ever and talking with co-workers searching for and selling a home. Home owners can price their house however they want but if they want it to sell it has to be priced correctly. It appears that having a home on the market for a year or more is common (I guess that part of Island time). It must be a game for them, they must like showing strangers their house. Our house is worth a million dollars… 50 years from now. The unemployment number seems stable around 16% but that’s not real since it doesn’t reflect the people who give up filling out the unemployment paper work. My advice would be to make offers on many house that would work for you but only offer what would make you willing to buy it now. Maybe you shouldn’t even know what the price is before you determine what you’re willing to pay. I don’t think you have much competition. Good Luck.
UPDATE: Spoke to the realestage agent last night. She said she left the seller a message with our offer but hadn’t heard back yet.
When I had initally spoke to this real estate agent she had mentioned that this isn’t a ‘normal house’ in regards to financing. She had indicated that because it is a finca with land that financing is more difficult. When I spoke to her last night she had asked if we plan to finance this. I told her no. She seemed to like the sound of that. I wonder if it makes a difference.
If they’ve had problems getting financing for some reason that is scary and possibly a benefit. It makes me wonder why this would be different and if there is something wrong with the property. If they accept the offer I will hire a lawyer to look over everything. I am curious though.
Anyone got any ideas why a bank would be less likely to loan money on a house? It does have 11 cuerdas (acres) and sits outside of town. Otherwise I didn’t really notice anything that different. It is on municipal water and has a septic tank which seems normal to me. There is that stream that sits to the side and well below the house. However I am sure when it rains that gets pretty full. Could it be considered a flood zone or flood way?
All these questions. 🙂
Britton, regarding the possible flood zone. FEMA does have maps of all of PR, and if it is in a flood zone, you would have to buy flood insurance. The banks shouldn’t care as long as you carry the mandatory insurance. Just like in the states. Good idea to get a legal opinion. You might also want to get a home inspection (don’t know if they would inspect the 11 cuerdas though) and make the offer contingent on both. Regarding the realtor’s joy with your cash offer: Sellers love a cash buyer. That means no need to qualify, and no long escrow. It does not necessarily mean that there would be problems financing it. In this mortgage environment, every escrow is a potential problem, at least in the seller’s eyes. And in the case of a finca, escrow might very well be longer (although I don’t know why that would be; the reason and logic behind many PR practices escapes me). PR banks will no longer pre-approve anyone for a mortgage, only pre-qualify. The buyers don’t know if they are approved until close to the end of escrow–nor do the sellers. Even if the buyers are confident (as we are, with credit scores above 800 and good income), the sellers are nervous until close of escrow. I mention us because we have been in escrow for 6 weeks, and the seller’s agent has continued advertising the house. They also asked us for our bank statements last week to verify our liquidity!! (The bank has had those and a ton of other documents from the start, but the seller’s agent needed to see for herself.) You might think that is an unethical request (as we did/do), but the agency that requested our bank statements is owned by an award-winning broker who has written the most well-known real estate book in PR, “Real Estate Laws and Practices in PR”. Sometimes there are logical reasons for things there, but you have to dig deep and of course follow the money. Sometimes there is really no acceptable reason. And then there are lies and/or misinformation. You are probably like us in that you like to have control of situations you are involved in. I hope that not having control doesn’t upset you (breeeeathe), because in PR you are often at the mercy of whoever’s hands your case (whatever it may be) is in. “Welcome to Puerrrrto Rico”. — Fran
Yup – It’s a Mad Max kind a place. I read a commentary on the state of Puerto Rico in http://www.prdailynews.com that feared a return to “jungle law.” The University, who isn’t “transparent” with students and staff apparently removed campus gates last night to show its “open door” policy (or no door in this case). I think we can look forward to vandalism by students, jungle law and always having to show “proof” of where the money comes from. Just like a movie! With our loan they asked for the same papers over and over and over…our Charles Schwab check (from the office in San Juan) didn’t clear for about 2 months (we couldn’t access our money) and no one accepted our 100 dollar bills when we got here. Yup – it’s a movie and even if you only live here for a few years you will have a life time of stories! Oh – bring multiple copies of your birth certificate – the drivers license place KEEPS it, if you have kids and they join clubs they keep them and the list goes on. You need your marriage cert to get a license also and make sure they don’t put your mother’s maiden name as your last name on the DL. You need the passport and DL to match…
Katrina , are you plannig to move soon. Based on your comments i got a gut feeling that you will move between 2 or 3 years from now.Please let me know when its gonna happen i will make you a good farewell party
Well I wish you guys luck, I definitely think under asking is the norm on this side of the island, people are asking what they would like to get…….. in their dreams. If they want to sell, they will take under listing.
Well they took under asking price. I think for the amount of land and the quality of the house we got a pretty good deal. They had it listed for twice as much about a year ago.