Earlier today I presented an offer for one of my buyers on a condo just outside of our planned community.
After pulling the comparable sales in that complex and a couple of neighboring properties of the same construction we determined the asking price was higher than what it should appraise for. My clients really liked this one. It had some upgrades and 2 parking stalls that were at the same level as the condo. So after researching the numbers my clients settled on a price to offer the seller.
I submitted their offer to the listings agent. Our offer was lower than the asking price by about $12,000, but higher than any of the recent closings. Quite generous being that the prices in that complex have seen price decreases over the last six months. Other than price, our offer was clean. No concessions, no special provisions and a full pre-approval with docs with a primary local lender and well known loan officer.
I get a call back from the listing agent within a half hour of presenting the offer. Their client wants to counter offer us back up to within $5000 or asking price. The problem is we are already pushing the price and do not believe there is any hope for getting the appraisal. I asked, if it doesn't appraise will your client lower the price? The response was no, they want their number and nothing less.
With several similar units for sale, their property over priced and on the market more than 3 months; they are definitely playing a dangerous game. The prices have softened in their complex and they did not seem to get the message. If my buyers purchase another unit they will have missed an opportunity to sell this property at a strong price.
I will mention a side piece of information. This property was purchased several years ago for cash, has no mortgage and has gone up more than 250% since then. It may not be relevant for the conversation of what the home is worth, but I do find it interesting when considering their demands.
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Randy L. Prothero, REALTOR®, ABR, AHWD, CRS, e-PRO, GRI, SFR
Century 21 Liberty Homes
Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers. His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.
Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors. To improve overall professionalism in his area Randy also offers classes for real estate agents.
www.HawaiiRandy.com * Oahu (Honolulu County) Property Search * Hawaii Military Relocations
Randy... IDIOTS, IDIOTS, IDIOTS.... AND GREEDY.... I could see if they weren't going to walk away with much, after paying the realtor. You already had me at 2 idiots when they said no, if it under appraised. I am sorry, what would they want, the best of 10 appraisals? And what happens if they still were all $10,000 less or more... NO???? So I give them 2 idiots...
But now, as I right this and after you tell me that they have made 250%??? They get 10 IDIOTS and 4 1/2 GREEDY S from me..... lol And I will end with, SAD, SAD, and a shame, because the buyer loved the place. Why not come down $5,000 and agree that if it didn't even appraise for that, that they would sell. I am dumbfounded.
Hey Randy... should we possibly put part of the blame on the realtor for not explaining all of this to the clients? I mean, I know we don't know 100% what the conversation has been.... I am not even a realtor and I think I could be very convincing if I put it all on paper for them. Again, SAD and it's A SHAME.
Jeff - I am sure the agent went over the comps. I know the agent and he is pretty good. This is what can happen with an over priced listing. This one may be around for awhile.
Randy, I keep preaching this (appraisal appraisal appraisal) and thankfully we're seeing less and less of the situation you've described.
What happens next? You still have the buyers and they will purchase. The sellers home will still be on the market.
Who wins? Your buyers.
Randy,
Unfortunately there is not motivation to sell. How will they sell the property if a bank will not appraise it for what they think it's worth. They must be back in 2004...I wish times were still like that but in reality unless someone that pays cash is willing to take that price with no appraisal...that deal will most likely not happen. We can't control the market if it is impossible to sell at a price that is unreachable.
Randy. Good for you.
This is a real case for buyer's agency. Fortunately, with historical data, agents who can analyze data for their buyers and give them good advice make a valuable contribution to a stable market.
If a buyer WANTS to pay over market for a piece of property that may satisfy their special needs, so be it. But, today, with good market analysis from their agents, buyers can make wise decisions.
Over the years, I've seen too many buyers who overpaid. Then when they wanted to sell and move up, couldn't. Having buyers trapped in a house for which they overpaid doesn't help anyone.
This is so typical of what is wrong with my market in MD and Northern VA. Sellers fixate on a price to give them a desired net proceeds with no consideration of the market. They price real estate like theirs was the only one in the area for sale.
What I always want to see is the same property on the market 6 months later when prices are even lower, and they will be.
Randy,
At least your Buyers have more options, they will move on while this Seller just sits on the market. It amazes me that some have resisted the change in the market.
Sounds like no motivation whatsoever. It's not costing them much so they will probably hold out until they get what they want (if they even can) or get frustrated. Perhaps it is also a ploy to eak out a few more dollars. I would think the buyers owuld say - this is it, take it or leave it - then move on.
Jeff
If you are representing your Buyers as a Buyers Rep, then you need to protect your Buyer(s). If the Seller is not going to be realistic, then it is their problem and they will have to lower the price- or just keep the property. At least you will be able to sleep at night knowing you looked out for your Clients best interest.
However, hopefully, the Sellers Agent is being realistic with his Seller Client. Maybe the Seller's Agent needs to dump the listing?
Jeff, I had one like ths a while back. I was presenting in person and the sellers got huffy.
"No problem," I said to the agent (in front of his clients). "Here are the comps that I found, and if you could please share with me the comps you guys used when you priced this, I will bring them to my clients and see what we can do."
I pulled out a detailed market analysis with a side-by-side comparison of their unit compared to the recent sales, giving them full dollar credit for their improvements. Then I left.
Of course, the listing agent had not done this and the sellers came down.
Kris - We put in an offer on another property for a $20,000 less and it got accepted within the hour. We will be opening escrow today or tomorrow as soon as we receive back all the signed documents.
Neal - They just don't get it. If they are jot careful they will be looking at selling for even less than we offered.
Lenn - Having me represent them in the purchase definitely protected them from over paying for the property. If they tried it on their own or with an inexperience agent the bank most likely would have stopped it.
Maggie - I agree completely
Gary - We did and got it yesterday.
Bryant - I doubt I would have taken the listing.
Suzanne - I am not amazed, I have seen it several times. I have turned down similar listings and will continue to do so.
Jeff - We moved on and the one we got will make it even harder for them to get there number.
Kathy - Maybe I see it differently then some. I would rather spend the time finding a good client, than waste it on a property I can not sell.
Gary - All we could do is move on.
Lisa- Now if they change their mind, it is too late, we just got accepted on another property.
Sally - The one my buyers just got should also appraise.
Rick - All true. I am sure the seller's agent is not too happy.
Patricia - That is a great way to handle it. I had a buyer's agent on the other side try that one day. The problem was he did not do a good set of comps. I sold it that same day to a much higher offer. My response back was that either mistaken or the folks bringing the other offers were. LOL
Randy,
These sellers evidently were in no hurry to sell. Yet, there are sellers who do need to move on, but are adamant about the price and then proceed to blame everyone, but themselves, under the sun for not selling.
Jerry - I am sure most of us who do this professionally feel there are too many agents out there.
Vincent - Greed is a factor for some.
Esko - I have met a few of them also.
Sharon - Either way they will most likely not be selling their property anytime soon.
I go over the market value of the properties carefully with my listing clients. I am amazed sometimes when I see properties priced real high. This one wasn't in orbit, but it was still above what any reasonable appraisal will bring.
i've referred to these properties in the past as the inactive active listing.
the listing agent might as well include in the property information, "cash buyers only"
Of course all sellers are not motivated!?@#$
Most sellers who say that or have it inserted in the property remarks just hope that will bring more people to look at the property, hoping someone will bite, and they won't have to negotiate much.
Someone who is motivated to sell better have the home priced right, ready to negotiate, and ready to make the move.