For months we had a less than stellar market in Central Florida. Slowly but surely, the market has shown some improvement. However, the quality of the offers has been like playing with monopoly money. We track home sales, percent of asking price vs sale price. In 2005 the sale price was on average 97% of the asking price. It was a sellers market. Now a little over a year later, it seems the rash of incoming offers is in the 82%-89% range of asking price. That is after price reductions. This translates to about a $50,000 difference in the asking price to the offered price. Do not pass "Go" and collect $200 dollars. People any offer is an offer. In a market with an eleven month inventory of homes if you are able to snag a buyer who is willing to make an offer...Is any offer a good offer? No, not really. Naturally it will depend upon your seller's situation. Most of mine are not desperate. The ones who are, carry high mortgages and cannot accept low ball offers or they will end up short at the closing table.
Pricing the property correctly the first time is important. To get to the closing table it needs to appraise properly, as well as meet other criteria for lending. If the price is low enough, it will attract buyers. The buyers once attracted by the price some how think coming in far below is still a good plan.
A Lake view property is listed at $279K. Seller gets an offer of $260K. Seller rejected the offer. We will take $270K for the purpose of discussion. The next buyer comes in and is told the offer needs to be better than $260K to compete, he offers $230K and cannot figure out why it was rejected immediately. His defense... "It is a Buyers Market!"
Many are coming to realize they do not have the control they thought they had. The media for months empowered the buyers and many may have misunderstood what the term " a buyers market" really means. To some, it may mean they have the control to price the price the property at whatever they feel like. "Is he desperate?" Not really. To sellers we explain it is an inventory term.
The new media campaign the N.A.R. is running, is helping buyers to understand that inventory is slowly decreasing and building costs are not. They are driving the public perspective towards "buy now before they are all gone."
So if you land on any of the properties on the board with a buyer, if it has a house on it already...it WILL cost more to occupy that square! And as in the game...he with the most money (best offer) will win. Are we having fun yet?