I’m working with a client that was surprised when he heard that offers had come in on a short sale listing above the listed price (which is not unusual for a short sale or bank owned home priced well below market). This prompted the question that’s the title of this post.
He was not aware that offers could be submitted and accepted over listing price.
The listing price for a home is an asking price. Any listing can be negotiated to a final sales price either below or over asking depending on the situation. The seller is not obligated to take the first offer made at list price (or any offer for that matter).
I was involved in a short sale with another buyer where the seller listed at $112,000. After submitting an offer, we found out the bank would not take anything less than $120,000. In another case with a bank owned home, the price had been set well below market value. This generated about 20 offers within 3 days, selling for well over the listed price. This is a common listing strategy to generate strong interest in a home.
This is one reason to have a Realtor on your side when buying a home. They can assess the specific situation, analyze comparable market values, and recommend strategies for submitting offers that will work in your favor.
Planning is in progress for the grand opening of the Phoenix-Tempe-Mesa new light rail system. From the Valley Metro web page:
The grand opening of METRO light rail is Saturday and Sunday, Dec. 27 and 28, with all train rides free. Station celebrations will be held Saturday from 10 a.m. to 5 p.m. Saturday activities will occur along the entire 20-mile METRO alignment. There will be music, activities and exhibits at many park-n-ride and light rail station locations. Because we expect a lot of Valley residents to join us in marking this piece of Arizona history, we’ll also have shuttle buses to get you back to your car if the trains get crowded. Rides will run from 10 a.m. – 8 p.m.
Sunday will offer a more low-key opportunity to explore the METRO system, its beautiful stations and the Valley’s light rail destinations. Rides are still free from 10 a.m. to 6 p.m., so if you’re not big on parties, plan to explore METRO on Sunday.
There are several Tempe events planned through the holidays and into the New Year. Here’s a run down of the most popular with links to more information:
Nov. 11th, Veteran’s Day Parade - begins 10am near ASU Gammage, Mill & Apache
STAR POWER® is a real estate agent education organization. Agents can subscribe to their free scripts to deal with various sales situations. Many of the scripts are corny, but occasionally I find one that offers sound advice, such as this one to advise a seller not to go FSBO:
I read a post by Bryant Tutas discussing perception of market data, looking at sales data for his area since 2002. As he was inspired by another blogger, I was inspired to review data for Tempe and the metro Phoenix area. Here’s similar data I got from the Arizona Regional Multiple Listing Service (ARMLS) as of 12/17 for single family detached homes, extended to include average square feet and Days on Market (DOM):
Tempe
Year
Sales
% Change
Avg Price
% Change
Avg SqFt
% Change
Avg DOM
% Change
2002
1,441
-
$187,300
-
1,868
-
49
-
2003
1,538
+6%
$201,946
+7%
1,917
+3%
53
+8%
2004
1,638
+6%
$224,740
+10%
1,915
+0%
42
-21%
2005
1,654
+1%
$300,696
+25%
1,859
-3%
25
-40%
2006
1,259
-24%
$337,609
+11%
1,858
+0%
59
+58%
2007
957
-24%
$344,606
+2%
1,922
+3%
84
+30%
Metro Phoenix Area
Year
Sales
% Change
Avg Price
% Change
Avg SqFt
% Change
Avg DOM
% Change
2002
55,713
-
$197,314
-
1,897
-
62
-
2003
65,351
+15%
$212,253
+7%
1,938
+2%
64
+3%
2004
81,015
+19%
$240,085
+12%
1,955
+1%
49
-23%
2005
85,299
+5%
$325,176
+26%
1,948
+0%
30
-39%
2006
60,429
-29%
$361,927
+10%
1,965
+1%
73
+59%
2007
42,373
-30%
$365,102
+1%
2,073
+5%
112
+35%
Amazing as it may seem in today's market, the average price in Tempe and the Phoenix area in general has actually increased for every year since 2002, including 2007 (as of 12/17). However, then you notice that total sales have dropped by 50% since 2005 (similar declines noted by the other bloggers for their markets).
You can probably come up with a few scenarios to explain the increasing average price in the face of falling sales. Fewer lower priced homes selling, buyers selectively targeting higher priced homes (possibly explaining the higher average sq ft), etc. The rate of increasing prices has dramatically fallen off in 2007, so we may be turning the corner to lower average pricing next year. Although if you believe NAR, prices will be on the rebound (their perpetual theme). Hard to see it with this data.
Should you think that the data may change significantly in the remaining couple of weeks of 2007, you should note that there are only 3,887 pending sales for metro Phoenix, 81 for Tempe. Hardly enough to make a difference, even if they all closed in December (unlikely).
The new light rail service for Tempe is scheduled to start in about a year. The new service will run through the ASU campus and along Apache Blvd before heading into Mesa. The city has already kicked off studies for extending the line further into south Tempe, where I live.
The rail as it exists now does not do much for me unless I drive or take a bus (good luck with that) to a stop further north. Not too convenient. It would be great to take the rail service into downtown Tempe or further into Phoenix without the hassle of driving. To get down to my end of town though will be a challenge for the planners. They have to somehow navigate through a railroad crossing which runs east-west between Apache Blvd and Broadway Rd.
Now all that's assuming I haven't moved before 2015 which is the earliest any extensions in Tempe will be built.
Recently, Russell Shaw pointed out that Real Estate agents are considered by the Harris Poll to be at the bottom of the most prestigious occupations. While you may think that those at the bottom would have low self esteem, not so according to Time Magazine which ranks Real Estate Brokers in the top tier of those most happiest with their job (ranked #18, with 45.29% saying they were "very happy"). We were ahead of athletes and school teachers. The bottom? Gas station attendants. My job satisfaction comes from experiences like this one.
The emotional ups and downs of being a Realtor. On a recent sale as the buyer's agent, I met the owner agent at her now former home on closing day to pick up the keys for the new owner. She wandered about the house for the last time, sad, on the verge of tears, leaving her family's home of 20 years, and her mother's home before that. Soon after she left, the new owners came by to get the keys. They were extremely excited and happy to finally have their new home, hugging me for helping them. I stood there with mixed emotions, thinking of the former owner's sadness, but feeling good about helping the new owners. I got to experience the sadness and joy of transferring a home within about an hour.
October 2007 market trend data for Phoenix area cities courtesy of Fidelity National Title. Tempe remained with the best turn-over ratio among Valley cities compared to September, with 1 home sold for every 3.1 listed, although worse than September's 2.7. Three cities improved from September: Phoenix, Scottsdale, and Surprise. All cities still have significantly lower turn-over than October 2006.
Ratios for October 2007 and 2006:
Tempe
3.1
1.7
Chandler
3.6
2.2
Gilbert
3.6
2.3
Mesa
3.8
2.2
Surprise
4.1
3.5
Scottsdale
4.3
3.2
Glendale
4.9
2.2
Phoenix
4.9
2.4
Fountain Hills
6.5
3.9
Fidelity report published with permission. Upon request I will email my original copy which is more readable.
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