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While you're working with a buyer, when they write an offer, do you just let them write it where they want? Do you let your buyers write low offers just to get that desperate seller to give their home away? Are you writing multiple offers to see which sellers are desperate? 
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8 Comments on Are Cutthroat Home Buyers Causing Home Values To Decline More?
Unfortunately, this is our market right now. Buyers are dictating the market. There is a huge inventory out there and buyers can be picky or even try to get a deal by lowballing because they know if they do it enough one might stick. I try to educate my buyers by pulling comps and letting them know what fair market value is, but if they want to put in an offer that is below that there is not much I can do about it. I agree with you that if you get a home for right at or less than market value then you are lowering the value of the rest of the neighborhood, but I can't have a buyer pay more for a home than it is worth. Even if I convinced them that is what they should do, it would never make it past the appraisal. It is, what it is....
It's like "what came first, the chicken or the egg?" The short sales out there have encouraged lowball offers way too much. However, after the first couple of offers in which the buyers won't listen to you prior to writing an offer, they usually have a turnaround and realize that you are telling them the truth about how things work out.
Anyways, good luck on educating them. It is a process, that's for sure:)
Lisa, this strikes me as kind of on the strange side. Perhaps back in the day when we were all agents of the seller, and when we wrote up an offer with the buyer, our job was to get the buyer up as high as we could.
I understand the point of the post... that low offers aren't good for the neighborhood... but... so ? That is not the buyer's concern. When we work as a buyer's agent... our concern is getting the best price possible... for our buyer.
It's a very good point. It's also creates a lower BPO for REOs or short sales as well. It seems like we are not "out of the woods" yet.
I have a lovely townhome in a small community and it's been for sale since I got married and moved into my husband's newly built home. I've consistently kept my sale price several thousand below any other comparable. So, recently, the next door neighbor died and the estate "sold" to the daughter, for a good $60K below value. Try as I might, no appraiser cares, and there went my value. HOA doesn't allow rental, so I'm stuck with a home I can't sell for the mortgage on it. Welcome to the current market!
Lisa - I agree with Carolyn (#3) in prinicple. However, when that great price becomes the kingpin of declining comps, I'm not sure that great price has enduring value. On a much larger scale, that's exactly what happened in many markets, but in reverse .... higher prices than what were realistic for the market. It must in the final analysis be a meeting of the minds - the princpals' minds, not ours!
Buyers and sellers alike (and sometimes even their agents) don't realize the long term effects of their actions. Sellers who don't do whatever they can to properly prepare their homes for sale and get the best price possible set the downward spiral into motion. Lowball offers are the logical next step.
@ Jack in # 6: I fully understand the harm that declining values can bring. But... if you are the buyer's agent... you have a fiduciary responsibility to get the best price for your buyer. I don't mean to sound harsh, here, but that is our job as a buyer's agent.