The names in this little piece have been changed to protect the ignorant. But will call this person Fred (Failed Real Estate Diagnostics). Sometimes Fred goes by other names, my uncle, my aunt, my mother's hair dressers third cousin, my friend at church, or the drunk at the bar.
Well Fred I took your friend from church out to see homes the other day. We have looked at hundreds of homes together, probably thirty that day. She wants a good deal. She is ready to buy, has her loan approved and all the money she needs in the bank. She actually has a good buying strategy, try to get the most square feet for the money in a decent area. She doesn't mind some cosmetic work if she can save some money. Guess what Fred, we found the perfect house.
You can always tell when you find the perfect house. The buyer starts mentally placing the furniture and imagining their future in it. The home was priced to sell. I told her what kind of offer she needed to make to close the deal, and she could afford it. But then she got scared, she told me Fred said to always pay $75,000.00 less than the asking price, this is what the investors are doing. I was amazed that Fred knew so much about this house, without evening seeing it or looking at the MLS to get comp sales. She was sure that Fred was right and offered $50,000.00 less than I recommended.
Well Fred, she didn't get the house. In fact Fred I researched it a little and found that no house near this size, in this good of condition has sold nearly as low as you recommended in a long time. Did you know Fred the house was on short sale priced at over $100,000.00 more. When it was foreclosed the bank took it off the market, fixed it up and listed very low to move the house. Did you know that Fred? I doubt it. I know this bank and how they like to market their homes, I've worked with people to buy their homes before. Have you Fred? Fred do you even know which bank Fred?
Fred your friend will get a home, but not this one. She may even save some money . . . on the initial purchase. But you know Fred she won't have two sliding glass doors on to the extensive patio area, she will not even have the patio. Oh ya, she won't have the nice landscaping, the rock retaining walls with the brick caps. She can always put in her own trellises to cover the patio, when she puts in the patio. Did she really need a full three car garage? I guess not. The rest the upgrades can be added latter too, like the granite counters, the new flooring, fresh paint. Of course it won't be easy to put the Jack and Jill bathroom between the two bedrooms for her grandkids. Nor will her kids have the private loft area off the bedrooms for entertaining, homework, computers, etc . .
Do you want to know what is even worse Fred, the next three homes we wanted to put in offers on had already gone pending. Do you think they went for $75,000.00 less than the asking price? I doubt it.
At the end of the day Fred after all the work is done, and the extra money is put into the home, she might save a little money. If she saves $5,000.00 to $10,000.00 do you think she's going to feel good about that when she drives past the house she really wanted in the neighborhood she'd rather be in. I don't think so. People spend thousands on pleasure and decor for their homes. Is a few extra dollars that a person can afford worth it to get the right home for them? Do you think she might recoup it on resale, with some extra? I bet she would.
I know Fred, she had doubts before talking to you. I was trying to share the facts with her and show her the hard numbers. But you really fed her fears. After all you're an expert. Sometimes Fred you are a real estate agent. Do you enjoy pontificating to get peoples attention and feel good about yourself? With your apparent vast knowledge I wonder why you're not busy with your own client's. Did you really help a buyer get a home a home $75,000.00 under the asking price? Or is this some urban legend you started? The real question that should be asked is do you know of any properties like that one that sold for $75,000.00 under the asking price of this property. Each property should be judged on its own merits. I guess it is easier to let other people do the hard work while you spout off. Maybe you can even steal a client now and then based on your hot wind.
Yes Fred I do talk real estate with my friends and family. But you know Fred talk means a conversation. It means getting details, and if I cannot get the details I always qualify what I say. In fact talking real estate comes very naturally to me. I have given advice and good advice to people who were not my customers. I know other quality agents and I tell other people, including their clients, what good agents they are. I tell them at the end of the day to review it with their agent.
HEY FRED, GET A JOB!!!!!!!!!!
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