Has anyone else noticed this?
You find a "great deal" for your buyers...
You write an offer and submit it. You wait a day or so and find out there are 8 more offers just like yours in? Then it ends up selling over asking price. One we put an offer in, list price $119,000, sold price $135,000, with 12 offers, 6 of them ALL CASH.
This has been happening in Los Angeles County, California for over a year. Where a home may be listed for $400,000 (your standard 1,200 square foot 3 bedroom 1.5 bathroom home) and it ends up selling a month later for $454,000. Not because the house is so wonderful, but because people get caught up in the bidding war and want to have what everyone wants to have (even if there are 6 more sitting on the street priced around $435,000).
The trend in the Pacific Northwest (Oregon and Washington) is we get the trickle effect from California... i.e. the market here feels the effect of what's happening in California about a year after it happens there.
Sure, it's good for the banks, but Realtors need to educate their buyers that this is the tactic that the banks are going with. It is similar to a bargain priced short sale listing, when sellers price their home low enough to get attention i.e. offers so they can avoid foreclosure. This doesn't mean that they will sell it for the low price, or that price will even be legal, which in Washington states that the purchase price must be at least 80% of the home's appraised value, or it's ILLEGAL.
Recently I put an offer in for a $425,000 house for slightly above list price, but even then, the bank rejected the offer, because it didn't go with their plan, and the house sits on the market today, with a changed value range price of $425,000 to $465,000. It is a little frustrating, because my buyers would have been extremely happy with the home and the bank would have gotten the home off their books.
Banks seem to be pricing their properties aggressively, but it may backfire on them because they are undercutting themselves, and chasing the market down to new lows.