Will Somebody Please Tell Buyers that this is not a buyers market....but a Bank Market!!!!!

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Real Estate Agent with ReMax 10

Many buyers are mislead into believing that this is a buyers market because of the depressed economy, news media hype about foreclosure bargains etc.  True it is a depressed economy, true, there are many foreclosures to choose from...but it is those two things that have created the new market that I call a "Bank Market".

With most of the bargains being bank owned or short sales...homebuyers mistakenly believe they can get a good deal by the normal standards which I will call "normal bidding"..which goes something like this....you see a house you like..yet you need to think about it (if you think too long...it is gone) and then you decide to bring everyone you know to the house to help you decide (by now several offers are on property)..then you decide to bring a contractor out to help you determine repairs (fruitless efforts because by now the property is part of a bidding war) and then you call your Realtor and say "hey I am ready to put an offer on that property".  The offer you feel should be 20% lower than asking price (after all they told you it was a buyers market) and you ask for closing costs and oh you need five days to do a inspection. Then you are told it is a complete waste of time because there are nine offers on the same property and they are calling for the highest and best offer.  You decide to jump in and offer asking price...(gee)....someone really should clue buyers in on how to get a bank owned property.

When the Bank place a property on the market.....and if it is a good property at a good price and let's not mention in "move in" condition....buyers better race to put an offer on it...but wait buyers....here's another tip..don't fall in love with the property yet....wait....go to your Realtor and ask for the comparables so you can put the right offer on the property....if the price is way under what it is worth...and you really want this property...you should bid accordingly and you might end up the winner......after all this is a Bank Market.

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Rainer
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Fred Hookham
Keller Williams - Milton, WI

I must leave it to others to tell buyers that this is not a Buyers Market. We should be telling buyers that it certainly is a Buyers Market because they can buy more house for their money than anytime in the last seven years, at least in my area. In most cases, the asking prices have fallen enough to reflect the great opportunity this inventory represents. If a particular property isn't priced according to the current Buyer's Market, offer some comps based on recent sales with your offer. A solidly financed buyer can certainly have their choice of a lot of excellent inventory that isn't bank owned.

Sure, we always have unreasonable buyers in every market. In my opinion, it is our job as agents to help them form reasonable expectations. Homes in my area are not selling for pennies on the dollar, and a quick list of the sold price vs. list price should convince the bargain-hunting buyer that no one is paying pennies on the dollar. "Fantasy Buyers" who will not listen to your expertise should be referred to your competition.

Real Buyers must be sorted into "Buyers of Short Sales", "Buyers of Bank Property", and "Buyers of Privately Held Property". Showings begin only after you "clue buyers in on how to get a bank owned property", and they determine they want to take on the frustration and uncertainty. Same thing for short sales. Buyer's Market pricing still prevails in both short sales and bank owned property.

To your point, certainly the banks are holding a large amount of the available inventory. The banks are "making the rules", but no more than any other seller. They can't sell what a buyer won't buy, just like every other seller. The banks can't force an offer with their rules, they can only entice an offer with a low list price. A "low-ball" list price can attact attention, and if low enough, generate offers. Certainly the condition of their properties will do little to encourage offers. For a buyer attacted to a low-ball list price, it may be time to reconsider at the point of multiple offers, and "send us your highest and your best. Sometimes the "low-ball" list price may not be enough to lure some buyers into making an offer, or staying through the bank's addendums.  We are seeing some of the bank-owned listings expire without selling.

Therefore, there is no Bank Owned Market, there is only a segment of bank-owned inventory in a Buyer's Market. Without a Buyer's Market price on that segment, it will still be out there for sale just like every other stubborn seller that doesn't realize it's a Buyer's market.

 

Jul 18, 2010 03:33 PM #1
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Rainmaker
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Andretta Robinson

Real Estate Broker - Chicago South Suburbs
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