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The market, short sales and foreclosures, government tax credit, and frustrations of a local Realtor

By
Real Estate Agent with Century 21 TriPower Realty

I've been trying to help my clients purchase a new home. Seems like with all the bad press these days, instead of focusing on how there are some great opportunities in the home market, especially for first time home buyers, we are more worried about gas prices and saving our pennies. The hardest part I'm having is convincing my buyers that now is the best time to purchase a home, especially if you are renting. When else could you get a tax free loan for 10 percent of the purchase price up to $7,500 over a 15 year period? Isn't focusing on the positive one way to get potential buyers "off the fences"? How come you don't see more news on this tax credit every time they mention gas prices?

There are plenty of good deals out there. One of the problems when dealing with short sales and bank foreclosed properties is most of them have multiple offers (some are still listed as "active"!), and are not priced realistically. How can you list a home built in 2004 for $75,000 that was purchased in 2005 for $250,000? Will the lender really consider a full price offer of $75,000? Call the listing agent and ask if the lender approved this amount, and more importantly if they have even been in contact with the lender on this property being a short sale. The time-line is like this: you submit a full price offer, call back countless times over weeks (possibly months) on the status of your offer, then the listing agent tells you to come in with your best offer (which was the full price offer!). It then turns into a bidding war for your clients. Not only are you wasting the efforts of the Realtor, you are  creating an artificial market border lining on false advertising. Our fiduciary duties to our buyers and sellers should be held to a higher standard.

I mention short sales and bank foreclosures because most of the homes listed as such are in this $80k price range, which is the price point most first time home buyers are looking at. They want a near brand new home with 3 bedrooms, 2 bathrooms, 2 car garage, plus a den for $80k. All I foresee is setting potential buyers up for disappointment. I've called a few of these type of listings and the listing agent said that the lender actually told them to list it at this ridiculous amount to generate interest. How can you build trust with a client by showing them a home that potentially cannot be purchased even with a full price offer? I'll tell you this, the buyer will either think you or the seller is lying to them. Those of us in the real estate industry should realize we are at least partly to blame for the housing mess that we are in, and in doing so we need to take responsibilty for our actions that affect the market in the future. 

 

 

Comments (1)

Ray Nelson
Exit Realty Expertise - Fredericksburg, VA

I've seen this as well, Paul, and it has helped me to prep my clients first by letting them know why the property is priced this way.  I find that if I can lower that expectation up front then it is easier to help keep them in the deal and eventually get them a house.  Good luck and good post.

Aug 06, 2008 03:30 AM