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Searching for a deal? You're not the only one

This is a strange market indeed. Certain properties sit forever without an offer while others get multiple offers and get bid up over asking price. The problem is that the media only seems to mention the first situation which keeps buyers thinking that everything is negotiable and that they are the only ones out there looking for a "deal".

Unfortunately this isn't the case. With the rash of short sales and bank owned properties impacting South Bay cities such as Hawthorne, Gardena and Torrance, buyers need to better understand the market and try to get a sense of the strategy that the listing agent has taken. I've had the same situation come up several times lately. I am contacted by home buyers who are looking for a deal. They've seen several properties that are on various websites and they are priced well below market value. Unfortunately most don't seem to understand that they have found a deal, but they are not the only ones. Most buyers still want to write an offer well below list price, even when the list price is far below what it will sell for. I've advised several of my clients that if they really want the house, they need to come in with a full price offer if not higher. Unfortunately most don't want to hear this and the home that they're interested in sells for significantly higher than list price.

Bottom line is that if it's too good to be true...it probably is and the price on the home is designed to get multiple offers and a sales price well above list price.

Buyers need to do their research on an area, see recent sales prices, and listen to the advice that their Realtor is giving them.

Keith Kyle

South Bay Brokers

keith.kyle@southbaybrokers.com

www.keithkylehomes.com

Posted by Keith Kyle on 07/06/2008 03:52 PM

Comments (7)

south bay, hawthorne, gardena, torrance, recent sales, realtor, foreclosures, reo, bank owned, short sales

This post has been included in California Information Los Angeles County, CA Information

7 Comments on Searching for a deal? You're not the only one

JUL

2008

Not to get political, but do you think the media might have it's own agenda?

Hi Keith

You not the only when who's message is falling upon deaf ears.

I believe we're moving towards a new way of pricing homes. That is to price the home at the minimum acceptable price, receive multi offers, create a bidding war and hence get the home not only sold but sold for the maximum amount possible. This works!

Unfortunately the general public is always behind the times. I work in Cape Coral Florida, the foreclosure capital of the world. I try to educate my buyers. They are sometimes pushed out of good deals by offering to low a price or waiting to make an offer. The days of offer - counter offer are over. Where is it written that an offer should be below asking price? So many are losing out on great deals and they have no one to blame but themselves.

Prices are low, but sales are good and the market is competitive. Someone should tell the media that.

Funny, I tell people the opposite. I let them know I am not afraid to negotiate for them and they should not let a list price scare them. Basically, in my area most homes are overpriced. That shows by the days on market. If they want to sell, price to sell. But, most do not listen. I am going for price reductions this week.

I lost one to this exact scenario last week. We found a steal of a deal the first day it was listed. Buyers wanted to sleep on it. When they woke up, they decided (against my consultation) to submit a low offer. Their dream home was sold right out from under them for $12,000 over listed price.

Keith,

If I had $10 for every buyer I've given that lecture, I'd be making a pretty good income. They may hear of friends who bought a home for $25,000 less than the asking price in 2005 and now they expect you to get them the same deal in this very different market. Clearly, if a home is already listed at a "fire sale" price, the seller is trying either to take a loss to avoid keeping this in their inventory if a bank, or to avoid a foreclosure if a homeowner seller. Neither can usually afford an even further discount. But buyers just become irritated and feel that if you can't help them, they'll find someone who can. Rather than continue to fight about it, I'll usually make some attempt and if that doesn't work, I'll just tell them that it is obvious they don't have confidence in me so maybe they should find someone else. That either gets them to believe me or gets them out of my hair.

Ron,

The attitude or agenda of the media puzzles me. I've been writing about it for some time. Especially newspapers. Brokers are pulling ads from papers because it seems foolish to keep paying money to a paper that keeps doing its best to destroy their business. It is disheartening to read only one side of the story and hear how all of us are shady characters taking advantage of the poor sellers and buyers and causing them to ruin their credit, lose their homes and pay us outrageous commissinos for doing nothing! What could their agenda be that would lose them all that ad revenue?

Patrick,

In general I agree with you. I'm not afraid to tell my clients that prices are negotiable and we can go in low. What I was trying to say is that there are almost two distinct markets going on. I was trying to focus my comments on the home that are priced really well and far below market value. Buyers seem to think that they should go into any situation well below the list price, despite whether that price is over market, at market or way under market. There are plenty of homes out there in which there is some definite room to negotiate, but there are plenty of homes out there that are priced to receive multiple offers.

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