MR. CONSUMER, ARE YOU REALLY INTERESTED IN BUYING A HOME? OR, ARE YOU JUST PLAYING A BOARD GAME?

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

MR. AND MRS. BUYER.  WHAT IS YOUR GOAL?  TO GET A GOOD HOME AT A GOOD PRICE? OR ARE YOU TRYING TO PLAY INVESTOR?  Buying real estate is not a board game.

  • FACT:  BANKS DON'T KNOW HOW TO SELL REAL ESTATE. 
  • FACT:  CONSUMERS DON'T KNOW HOW TO BUY REAL ESTATELenn

When it comes to short sales, some things have to be understood from the outset.  For one, banks are not perfect in their analysis of various buyer offers.  However, neither are buyers when designing their offers.

WHO HAS THE EXPERIENCE TO PRICE SHORT SALES?  Banks have access to pricing experts.

  • the listing agent's pricing advice
  • more than one price opinion from objective brokers
  • appraisals. 

SHORT SALES ARE USUALLY PRICED BELOW MARKET.  Sure, banks often consider what they have in the property and the amount of their loss, etc.  However, in the end, the prices for short sales are generally quite advantageous for home buyers when compared with home owner listings and even bank owned properties for sale.  Buyer's agents can usually provide the buyers with solid pricing examples that support a short sale listing. 

LennHOW SERIOUS IS THE BUYER?  When weighing the pricing information, location, house design and condition and all of the evidence shows that the house is priced fairly, if the prospective buyer then makes an offer that is unrealistically low and stubbornly sticks to their original offer and refuses to negotiate price or terms, etc., then it must be accepted that individual making the offer is NOT A SERIOUS HOME BUYER! 

THE BIGGEST CLUE THAT A CONSUMER IS NOT A SERIOUS HOME BUYER??

When the prospective home buyer says:

  • "We don't have to buy now"
  • "The bank has to come down to my price"
  • "The bank needs to sell more than I need to buy"
  • "It's a buyer's market"
  • "I'm looking for a real deal"

BUYING REAL ESTATE IS NOT A BOARD GAME!

When a prospective home buyer makes unrealististically low offers, they have simply made sure that they will NOT HAVE TO BUY THAT HOUSE.  When the consumer ignores pricing documentation and logic and insists that everyone involved reward them for their superior real estate buying skills, they simply are giving themselves a guarantee that they will NOT have to buy a house

THEY WERE NOT SERIOUS HOME BUYERS.  In 2009, I dropped two prospective home buyers.  Both were in the market for new construction.  One made an offer of $300,000 on a $400,000 home.  I knew that the builder had closed that model for no less than a net of $390,000.  The other prospective buyer made an offer of $790,000 on new construction that priced out with their upgrades and options at $1,190,000.  the builder countered to $900,000.  BOTH BUYERS WERE PLAYING CHICKEN WITH THE BUILDERSBOTH OFFERS WERE RIDICULOUS and, IMO, designed to fail! 

FACT:  As of today, neither of those buyers have purchased a property.  They were never serious home buyers.

FACT:  Once a buyer makes a low offer and receives a reasonable and workable counter-offer and does not proceed to buy the house, they were probably NOT SERIOUS HOME BUYERS.

REAL ESTATE AGENTS make a significant investment of their resources when they accept a buyer-client.  We use our skills and experience for: 

  • financial analysis
  • property research
  • previewing
  • showings
  • preparing offers 

Working with buyers requires a huge investment of time and gasoline. 

FACT:  Agents can lose a lot of valuable time by not know the maximum qualified price range for a prospective buyer.  If the buyer is making low offers, perhaps that's all they're qualified to buy.   I have spoken with buyers who were qualified for a certain amount but insisted on looking at properties that were 25% or more in price.  If you get a buyer who wants to look way over their qualified range. . . . . . .  be careful.  Save your time.

WHEN WE SPEND TIME WITH CONSUMERS WHO ARE NOT SERIOUS HOME BUYERS, we may be missing the opportunity to work with serious home buyers.  It's your business, invest your time wisely and learn to identify consumers who are merely playing a REAL ESTATE BOARD GAME.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.Lenn Harley Photo

For a tour of homes in Vienna, VA, contact Lenn Harley, Broker, Homefinders.com, 800-711-7988.  Experienced REALTORS helping home buyers in the wonderful planned community of Reston, Virginia real estate.

To search homes for sale in Vienna on the full database of ACTIVE homes listed for sale in Fairfax County, use our convenient Home Search in Fairfax County web site.  

Fairfax County Real Estate 

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Re-Blogged 11 times:

Re-Blogged By Re-Blogged At
  1. Linda Lipscomb 12/12/2010 09:17 AM
  2. Kathleen Daniels 12/12/2010 10:58 AM
  3. Svetlana Stolyarova 12/12/2010 03:36 PM
  4. Lori Bee 12/12/2010 11:02 PM
  5. Cheryl Willis 12/13/2010 05:03 AM
  6. Lyn Sims 12/13/2010 05:58 AM
  7. Gene Riemenschneider 12/13/2010 07:33 AM
  8. Irene Kennedy Realtor® in Northwestern NJ 12/13/2010 09:38 AM
  9. Bill Buettner 12/13/2010 11:25 PM
  10. Sandy McAlpine 12/15/2010 10:02 AM
  11. Praful Thakkar 02/25/2018 06:38 PM
Topic:
Real Estate Sales and Marketing
Groups:
Silent Majority
Real Estate Trends
Tags:
short sale pricing
working with home buyers

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Ambassador
2,075,265
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

There are indeed many out there that are still 'waiting for the bottom of the market' to come. I don't want to work with those people - it is usually a waste of time!

Dec 13, 2010 07:48 AM #76
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Paul.  Indeed.  There are still a lot of short sales.  However, I believe that the intransigence of secong lien holders to take the offer of the first is causing more to fail.  Also, consumers are asking for more protection from post settlement payments to the banks.

I had a VA compromise seller walk last week when she found out that she would be left with a $40K debt. 

Dec 13, 2010 08:33 AM #77
Rainmaker
221,263
Liane Thomas -Top Listing Agent
BROKER Allison James Estates & Homes BRE 01885684 - Corona, CA
Bringing you Home!

Thanks Lenn for sharing that you have let 2 buyers go. It is a hard decision that sometimes has me looking over my shoulder wondering if I made the right decision.

Dec 13, 2010 08:43 AM #78
Rainmaker
241,996
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

Unrealistic buyers are the worst!  I let them fail the first time but if they don't start listening to reason, I'm happy to let them kills someone else's time instead of mine.

Dec 13, 2010 09:17 AM #79
Rainer
99,064
RhondaHeaslip NanaimoRealEstate
RE/MAX of Nanaimo - Nanaimo, BC

I, too, have let a buyer or two go in the past. My time is far too valuable and so is that of the listing agents and sellers out there that would have to go through this exercise. Our diligence up front, before working with the buyer, is critically important if we are to be effective and successful agents.

Dec 13, 2010 09:20 AM #80
Rainer
19,475
Rhonda Thibault
Yes, Lenn, totally agree with you. I will 'fire' a client once I realize they are just time and resource wasters. I'll tell them they can benefit from my skills when they are serious about buying. They either get real, or go waste some other agents' time. These are the ones who won't commit to anyone or anything, who ask about. 'Rebates' of commission right up front, and who take offense at my stated rate of compensation. Let em go. Not worth the stress and anxiety. There are lots of motivated, reasonable buyers and sellers out there!
Dec 13, 2010 09:33 AM #81
Rainer
2,203
Michael Holbrook
Blair and Ward Properties - Wilkesboro, NC

Most folks I've worked with "looking for a deal" do not have the means to proceed w/ a "deal".

Dec 13, 2010 09:41 AM #82
Rainer
332,782
Irene Kennedy Realtor® in Northwestern NJ
Weichert - Lopatcong, NJ

I shall assume that a reblog sufficiently conveys that I think this is a great post, Lenn!  Thanks for letting us share it with our readers.

Dec 13, 2010 09:43 AM #83
Rainmaker
532,345
Kenneth Cole
Weichert Realtors Appleseed Group, 2043 Richmond Ave. S.I.N.Y. 10314. office phone 718-698-9797, Appleseedhomes.com... - Staten Island, NY
NYS Licensed Real Estate Salesperson

Experience tell us that you are correct.  That's why you're the best.

Dec 13, 2010 10:40 AM #84
Ambassador
2,731,393
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Liane.  Goodness.  I have no regrets when "letting a buyer go".  When faced with a buyer who does not know the market and they believe that they can control the market, I know it will be a waste of time.  I don't like wasting time.

Jenny.  Unrealistic buyers are expected.  It's when they expect the market to bend to them that I object.

Rhonda.  I agree completely.

Rhonda T.  HA!  When a buyer asks about rebates before anything else, we're not likely to go far because I know they'll be wanting more later which I won't give.

Michael.  You are so often right.

Irene.  THANK YOU FOR THE REBLOG.

Kenneth.  You're too kind.

Dec 13, 2010 11:11 AM #85
Rainmaker
84,472
Simon Mills
Mills Realty - Toluca Lake, CA

I have found that if a buyer is not willing to get pre-approved then they are not serious buyers.  I refuse to show property to anyone that hasn't gone through the process to qualify for their mortgage or provide verification of their funds.

Dec 13, 2010 11:29 AM #87
Rainer
19,475
Rhonda Thibault
Good for you Lenn. Now, have you run into any mortgage brokers or attorneys interfering in your business? I have a real problem with one mortgage broker and one attorney getting between me and my Clients and telling them my commission (3%) is too high in today's market! I'm seriously considering actions against them, as they have interfered in my client/professional relationships and have cost me money, and goodwill! What is your take on this sort of thing?
Dec 13, 2010 12:59 PM #88
Rainmaker
641,596
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Lenn, I've had buyers like that where they have learned by having their offers rejected.  Sometimes I can tell and tell but they just don't believe me.  They listen to the news so they know it all!!!

Dec 13, 2010 03:42 PM #89
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Simon.  I have no problem with showing a few homes to buyers whom I can qualify for price range.  If they are in need of down payment/closing help, they need to see if they can qualify for one of the programs first.  It works for me.

Rhonda.  I have not.  If I did, they would simply not ever get any settlement business from me and they would know why.  I can't imagine a closing officer or attorney getting involved in my commission.

DeeDee.  They haven't yet learned that they should believe nothing they hear and only half what they see.

 

 

Dec 13, 2010 09:57 PM #90
Rainer
61,989
Eugene Lew
RE/MAX equity group - Happy Valley, OR

Like many agents, I have been the victim of serious bargain hunters who focus on how much they can take from the seller. It would seem that the game they're playing is to see how bad they can rip the seller off, instead of how good their deal is. They are focused on how much their realtor is making, and looking for a way to see what the realtor will give them if they use their service.

Buyers like that are not worth our time. They ask for what they can't have. I once had a buyer who met with myself, a builder & his agent. The buyer proceeded to tell the builder that the builder "had to sell". That insulted the builder to the point where he later said he hoped this guy wouldn't come back. They buyer wound up buying a foreclosed home of lower quality, in a less desirable area.

Many buyers feel distressed properties are an opportunity for them to steal the property for way below market value. They want to ability to buy so low, that they could flip it the next day for 20% profit, if they desired. Most banks are not going to give the homes away, because they don't have to.

Dec 15, 2010 05:51 PM #91
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Eugene.  You are absolutely right on all points. 

The problem, as I see it, is that the home buying consumer is far too influenced by what they read in the media which has little relevance to the actual real estate market. 

I try to limit our business to serious home buyers and leave the "wanna be" investor buyers to my competitors.

Dec 15, 2010 09:58 PM #92
Rainer
432,184
Margaret C. Taylor
Century 21 New Millennium MD - Mechanicsville, MD
St Marys/Calvert/Charles MD Real Estate Agent

Great educational piece for Agents and Buyers, thank you.  A buyer who wants to low ball but is unwilling to negotiate  is NOT a buyer.  Margaret C.

Dec 18, 2010 09:59 PM #94
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Margaret.  BINGO!  They are also not going to use my time.

Dec 18, 2010 10:25 PM #95
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