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Buyers Remorse with Short Sales and Foreclosures... Really?

By
Real Estate Sales Representative with Keller Williams Peace River Partners Realty, LLC

Although each area of the country is different regarding short sales and REO properties for sale there are a lot of "good deals" out there for buyers to purchase. That's the professional statement, the personal one is "Are you kidding me, you can's stand on a street corner, throw a rock and not hit a home you can buy for a fantastic price in todays' market"... Buyers are getting more and more greedy and losing out on the best deals the market has to offer and investors are scooping them up as quickly as they hit the market.

I'm sure we all know a good deal when we show a property based on condition, location, upgrades, pool, ammenities so on and so forth. Buyers who can be in the "lucky few" group to obtain financing in this market are so worried about getting the lowest, rock bottom, steal of a deal that they've missed the bigger picture, that picture being that the property is already priced at or below the lowest real estate prices most of us have ever seen. If I had the liquidity I'd buy everything in sight and laugh all the way to the bank over the next ten years of appreciation which will, as circular markets repeat themselves most likely occur at about 3-5% per year.

As market experts (or at least we should be market experts) we can only educate the buyers BEFORE we show them listings in the office and put them in the car. Let's set some clear expectations about our local markets, have them define what a "good deal" or "steal a house" means to them. You'll find some vast differences in what you hear from buyers, I've tried this; the perception and definition vari's so much.

Also, do yourself a big favor and here's what it is: Take an average sale priced home in your area, calculate a buyer obtaining that home for 5% under list price and then calculate how much it will cost them if their interest rate goes up just .5 points... You'll be amazed at how much more that house will cost them over time if the interest rate goes up just half a point. This simple little tool is a game changer for us and once you make sense to the buyers they'll trust your judgement and maybe you'll close more sales.

Let's educate those buyers when they first come to us; there's too many good deals to miss out on right now. There's no need for buyers remorse.

Anita Slaven
Reliant Realty - Nashville, TN
Real Estate Broker - Nashville TN

Tommy - Great post. You hit the nail on the head with this one. Many can not see the forest for the green trees of money.... trying to buy a home far below what the home will sell for even in a foreclosure market, just because it says "foreclosure". As you stated, a lot of them feel that no one is the expert but them.

Anita

Jan 26, 2011 10:09 PM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Tommy,

Agree.  If I had the liquidity I'd be buying more.  Just put in two offers this week.  I am fortunate to have some IRA retirement in a self-directed IRA.  I figure I can get 12-15% ROI renting them out versus 2-3% in a mutual fund.  And WHEN the market comes back, I'll build equity on top of that!

Jan 26, 2011 10:16 PM
Tommy Welchman
Keller Williams Peace River Partners Realty, LLC - Punta Gorda, FL

Anita - Thanks for the comment and please do the calculation between buying the home 5% less than list and a .5 increase in interest rates. Let me know how that works out.

Bob - That makes total sense, 12-15 is greater than 2-3 last time I checked and with the benefit of the equity you'll have in the future it will most likely be the best retirement investment you can make. I just went out on a limb myself and purchased a 13 acre horse ranch because the price was right. I'm keeping my present home to lease because it's way too upside down to sell and moving my family to the ranch. Eventually the market will level, this house will come back into the right range and the ranch will appreciate. All we need to do to help buyers is help them "see" the market for what it is.

Jan 26, 2011 11:23 PM