Negotiating real estate deals in this new market can be tricky for a number of reasons:

1. Sellers are becoming more desperate - although this sounds like a potential benefit, it can also make the process a lot more emotional.  More emotion means that there is a greater chance of people getting offended - especially when buyers are asking for the moon. 
   
2. Althought it may be counter-intuitive, the greatest opportunity for negotiating lies in homes that are a bit overpriced - because they are being "passed over," there is a lot less competition for trying to make a deal.  And, if you're the only one who has ever wrote an offer, then the seller might just be inclined to make it work, rather than wait for someone else who may or may not ever come.
3. In a market where over-priced homes are a bit of the norm, anything that's well priced is going to generate more action........which may create a bidding war.  If the home is really well priced, then you run the risk of losing the home if you try to come in too aggressively.  You might need to give them a full-price offer, and be a lot less picky about repairs.

Just found this great site the other day to help new homeowners to quickly find out who they need to contact to set up their new utilities.  Has a bunch of other helpful data on there also. 

www.MoveUtilities.com

Although most people who purchase fixers do so to live in the home, there may be some instances where you might want to purchase a fixer to turn into a rental.  Here's a couple of questions to keep in mind:

1. How long do you want to hold the property? 

This question was asked by one of our subscribers to our Market Report :

Although interesting [our market report], this [the appreciation numbers] seems inconsistent with falling prices on unsold properties on the market. It seems every week I see another handful of properties I've enquired about being offered at a reduced number ????  how does that square with this report?

Our answer:  

Great question!  There are a couple of factors to note in comparing the data you are seeing:

1.  These appreciation rates that we report are averages - which doesn't necessarily represent what happens with individual properties.  You will always have some people who are more desperate in their need to sell than others, resulting in more drastic price drops.  This also relates to certain neighborhoods.  Although the statistics groups all of NE Portland together, there are pockets that are still appreciating greatly, and other pockets that are hurting.  If you are primarily looking in the Pearl, then you might be noting what's happening to a neighborhood that is really struggling right now. 
2.  A drop in asking price doesn't necessarily translate into a loss of actual value.  For example, let's pretend that someone bought a home for $100,000 in Jan, 2006.  They are now asking $140,000 - but no one is buying.  So they drop the price to $130,000.........and then down to $120,000, where it finally sells.  Although they lowered their price by $20,000 off what they were originally asking, you still have an appreciation rate of about 10% per year from what they paid for it, and how much it actually sold for. 
3.  When you're looking around at homes on the market, it's usually the overpriced homes that you're looking at.  Homes that are priced well tend to be selling quickly and then disappear from view. 
4.  Because we had quite a boom in real estate in Portland a couple of years ago (we were seeing 16-20% yearly appreciation in some areas), people still have un-realistic ideas about how much their home might be worth.  For example - in the Pearl, most condos are listed at an average of $500/square foot.  However, the average sold price per square foot was only $466/sf for homes sold in the last 3 months.  That means that most homes are significantly overpriced from what is currently selling.  

If you have similiar questions - don't hesitate to send us an email.