I have several buyers very confused. They offered the asking price for a Daly City home but were outbid by $50,000. This is not supposed to happen in a buyer's market. The low price is a marketing tool and not a realistic list price. I explained before making a purchase offer, buyers must determine the true present market value. http://www.pruvoices.com/2008/10/what-is-market-value/ They must do the same review as a seller. List pricing is all over the board today with short sales confusing everyone. Many of these short sales never sell. But they do confuse the market. Buyers should compare the market value to the asking price. In determining your offer price buyers have to ask themselves how important is this home to them, what has been the activity on this home, what is the inventory, how long has it been on the market, how motivated is the seller. Most sellers regardless if they are a bank or an individual are motivated. No person and no bank want to sell below market. If you determine the list price is over the market price your agent needs to convince the sellers what you consider to be the market price is correct.
Very often in the North Peninsula and San Francisco we are finding the asking price to be lower than the realistic market price. This is especially true for Bank Owned Properties. Then you must be prepared to offer above the asking and pretty darn close to your determined market value price. Forget the asking price. They are very deceptive. Of course time on the market and activity plays a big part in your offer price. Many qualified buyers are out there and nothing is kept a secret today with the internet. Below market asking prices spread real quick and you are not the only one that interested in it. So when you come upon the below market list price be prepared to make a strong offer above asking. I believe it is important to give it your best. If you are not one of the top offers the bank may not even counter you. You are offering above the list/asking price.
I found a Daly City REO that was on the market for over a month; made an offer below asking and received a verbal acceptance.
www.leesellsmore.com
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Interesting practice. I find the banks around here seem to be holding the prices and then sometimes going for a low offer. I have always thought that the low list price should generate the greatest interest and it seems to be proving true in your market. Kinda like on ebay - starting your auction at $1 hooks a lot more bidders. Its tough to convince a seller to take the low road, and of course there are no guarantees.