Why would a Seller turn down a good offer?
I was speaking to a colleague the other day about a Seller who had turned down what the Realtor considered to be "a good offer" on a Luxury Home in the Greater Daytona Beach Area. The Buyer eventually got frustrated that they couldn't come to terms, walked away from the deal, and purchased another home.
Now the Seller sits and waits for another Buyer...
The truth of the matter is, in this very challenging market, there are only a handful of qualified, cash buyers in the Luxury Home Arena, and ample inventory to select from.
So what would make a Seller "turns down" a good offer in this market? Do they believe that there are hundreds of qualified buyers waiting on the sideline for "their home?"
Since I was not involved personally in the negotiations, I can only speculate what took place. This is not the first time we have heard a similar scenario about Sellers having unrealistic expectations about what their property is worth, their Listing Agent, or about those so called "Buyers" that are waiting to jump in...
The actual number of "Real Buyers" in a particular market area, can be somewhat confusing to both Buyers and Sellers, and Realtors. I classify a "Real Buyer" as a buyer that has verifiable funds, motivation, and is ready to close the deal once negotiations, and any contingencies are met.
For the purposes of this blog, the *Luxury Market in the Greater Daytona Beach Area is classified as those properties over $500K, and up to $10M.
If you take a look at the entire year of 2011 so far, here is a snapshot of the Greater Daytona Beach Area Luxury Real Estate Marketplace*
Number of Real Buyers:
- 500-750K = 53
- 750-1M = 24
- 1M-1.5M = 18
- 1.5-2M = 3
- 2M-2.5M - 2
- 2.5-3M = 3
- 3M - 5M = 0
- 5M - 10M = 0
The largest pool of buyers over $1,000,000, is actually in the 1M-1.5 price band with 18 "Real Buyers" that purchased in 2011.
After that, the "Real Buyer" numbers drop significantly. In the 1.5M-10M price bands, there were only 8 Buyers that actually purchased in 2011.
Current Active Listings Snapshot:
As you can see from the Table of Current Active Listings; there are 42 Active Listings priced between 1.5M-10M but only 8 Real Buyers have purchased so far this year.
Average Days on the Market:
The Charts and Numbers reveal the actual state of the Greater Daytona Beach Luxury Real Estate market in terms of "Real Buyers", Average Days on the Market; versus Active Listings for 2011.
It is important for Sellers, and their Realtors to evaluate all of the actual market data available, in order to make an intelligent and informed decision about an offer that is on the table.
It is a good idea to obtain a bonafide, certified Appraisal on the property, by a Certified Property Appraiser to determine the property's current value as well. A Certified Appraisal is a supported, defended estimate of value as of a given date, not to be confused with an Opinion of Value or Comparative Market Analysis.
Market Value is definied as follows....The most probable price a property will bring from a full informed buyer, willing but not compelled to buy, and the lowest price a fully informed Seller will accept if not compelled to sell.
Please Note: *The information contained herein is not to be used, reproduced, re-blogged, etc without the permission of Joyce Marsh, Luxury Specialist, Illustrated Properties | CHRISTIE'S
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