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You have to be kidding

By Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239

Real Estate Agent with Real Estate One 6501304423

January 22, 2009 01:14 PM

I heard at a party this guy telling me "that he wanted to put a $350,000 offer in on a $700,000 Metro Detroit foreclosure". His dad's friend told him that if he offered cash that he would get the home. Because the bank wants the cash deal.

I just about choked on the meatball I was eating. Banks are not accepting half price cash offers just because it is cash. IT IS AN URBAN MYTH. Cash is king only on reasonable offers. Banks are pricing many metro Detroit properties below market price to sell them quickly. Those homes are being sold quickly especially if they are in good shape. By throwing a low ball cash offer you most likely be wasting your time over and over and over. I have seen foreclosures sold at over list price when they have been priced way below market price. I see multiple offers many times on well priced homes.

I have seen 10, 15, 20, and 25% offers accepted but I never seen a 50% below list price offer accepted. I had a group of investors try the same thing on Detroit foreclosures. They had heard on TV that Detroit real estate was being given away. As cheap as a $1, The investors were from out of state. They wanted homes that were in decent shape. They put in 20 half price offers. They got 5 counters. Then they wanted to counter back again. By the time it was said and done 18 of the 20 foreclosures were sold to other home buyers and investors. They never ended up closing on a Metro Detroit home. They got discouraged from the whole process.

As a Metro Detroit real estate agent my job is to tell you about the Detroit suburbs real estate market based on my experiences and what happening with other agents. What is actually happening in our market. The real deal.

I want you to buy a home, I want you to have a good buying experience. Not a disappointment time after time. After all the goal is to buy a home. To close the deal.

On a side note: if a property has been on the market 6 or 7 month sure a low ball offer may be in order and may be accepted especially if it is cash. Remember banks like cash for the reason that it eliminates the chance of the mortgage not going through. They will sometimes take a cash offer over a mortgage offer if it is a little lower. How much lower is anybody's guess and is different with everybody bank.

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Suzanne McLaughlin

Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN

Sabinske & Associates, Realtor

Russ, tell your "friend" that some of us work for the banks. We tell them what the fair market value is. They choke and then price the property accordingly. They don't care if its cash or a mortgage as long as it CLOSES. And, they are not giving anything away. They have already lost money...no throwing more money after bad. Some people never really get it. I had a couple next door to a short sale that made me write a ridiculous offer for my own listing and present it for pennies on the dollar. What a waste of everyone's time!!!!

Jan 22, 2009 01:24 PM

KAREN THOMPSON, GRI, REALTOR

KTHOMES, LLC - Frederick, CO

Colorado Homebuyer Pro

Banks want to sell yes, but not that bad. Come on now!!

Jan 22, 2009 01:28 PM

Audrey June-Forshey

RE/MAX Realty Services - Darnestown, MD

GRI, Gaithersburg, MD

Russ, Amen to that. If you are buying my house with a loan or with cash, to me it all spends the same. Makes you wonder where they are getting their advice.

Jan 22, 2009 01:41 PM

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

I've seen banks take up to 30% less than the mortgage, but not half. And in our area the offers seem to be getting better as business is picking up a bit.

Jan 22, 2009 01:45 PM

Brian Lee Burke

Kenna Real Estate - Lone Tree, CO

Broker & Advising Expert-Kenna Luxury Real Estate

Russ - sigh - we have had our share of those "investors" come around as well. Wonder if there is some kind of investor seminar that tells the "secrets" on what to offer to banks i.e. 50% off. Obviously hasn't worked here either! It's getting manageable now, especially when many of the bank owned homes have multiple offers the first day and go for more than list price. No 50% there. ~Rita

Jan 22, 2009 02:05 PM

Missy Caulk

Missy Caulk TEAM - Ann Arbor, MI

Savvy Realtor - Ann Arbor Real Estate

Urban Myths. that's a good thing to call it. Sometimes I have to wonder where buyers come up with all this. Perhaps something gets twisted in the communication and a rumor starts. Like, "I bought a home that was half off from what they paid, " who knows.

Jan 22, 2009 09:43 PM

Anonymous

While our market is so depressed, sometimes you have to find the little things that keep it light. It is almost getting hilarious to hear the comments of some buyers. My favorite two, so far this year, are "I read an article that said you could buy a house for $500", yes, but not the 1200SF ranch in Livonia you called about, that is a lease price of $1000 and "My offer is lower than the list price, but, the bank should be thankful to get any offer", yes, but you are coming in 38% lower than list for a decent house that has been on the market for two days and already has two other offers. Working with many REO properties, I have found that the majority sell for list price and the best of the group do sell for more. It is unfortunate that the Detroit market has been painted as a buyer's haven for pennies on the dollar.

Feb 18, 2009 02:02 AM

You have to be kidding

Comments(7)

Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239

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