Everyone Wants the Low Hanging Fruit

I have been noticing an odd phenomenon when it comes to aggressively priced properties. REOs most noticably.  When an REO comes on the market priced to sell a herd of buyers pounce on them. Eventually bidding the sales price well over asking price. This in itself is not so strange, but at the same time listings that are prices with just a little fudge factor, say 5 to 10%, go practically un-noticed.

My last two REO listings (priced at market value) that went under contract did so at 30 and 50% above asking!  I never would have dreamed of listing them anywhere near what they sold for based on the current comps. While two of my listing that are listed at no more than 10% above market value are getting virtually no offers. I had a conversation with a buyers agent who's client is interested in one of these, but is reluctant to put in an offer. We both agreed that if the property was priced $25,000 lower it would get bid up back to where it is now or somewhere close anyway. But still he hasn't bothered to submit a market value offer. He must prefer to be one of the herd.

If you are also one of the herd, you are probably more than frustrated by being out-bid all the time.  Consider the example above where one went under contract at 50% above asking price.  The buyers agent told me the buyer had been out-bid 17 times and wasn't going to let it happen again. I had more than a dozen offers on that property. It was a very cheap property to start with, for the record, but this is going a little overboard. 

I constantly get calls from buyer's agents who want to know if the the offer they intend to submit is a waste of their time or not. Well, A) I never know and B) if I did, aside from being unethical, it doesn't benefit me or my big bank client to say. C) if you have to ask you probably already know the answer. Lastly, I can write an offer in about 10 minutes so how much time are we really wasting?

Here is my advice for the day. Instead of focusing on the low hang fruit,  try making reasonable offers on properties you really want, instead of just the best priced properties that everyone wants. You may just end up with a great deal, too.