It is a well-known fact that it is a buyer's market. Due to high inventory and low prices, buyers can usually count on being in the driver's seat. But this is not always the case. There are many situations in which a seller will be difficult to work with or actually be in control of the transaction. If you are a buyer and run into any of the following scenarios, be warned that control may have shifted.
•1. The home you are interested in is new to the market. If a home has only been listed for less than a month and it is priced well, the seller may not be inclined to consider anything that is not close to full price. In many instances, the seller will feel like they need to give their price enough time to see if it works. It can be very frustrating if the home is overpriced but a perfect fit for the buyer. As a buyer you never want to over pay but it can be very stressful waiting for a price reduction, all the while hoping somebody else doesn't come along willing to pay the high price.
•2. The home has been on the market for a long time without any price reductions. This is a sure sign that the seller is convinced his property is priced right and he is willing to sit on it as long as it takes to get it sold. This is common in instances where the seller owns the property outright and is not burdened with monthly mortgage payments. In some cases, the seller is simply delusional and refuses to see what his home is really worth. These sellers are very difficult to deal with for both the buyer and the sellers Realtor.
•3. Your first offer is met with either no counter or a very low counter. If you make a bid on a property and the seller refuses to even respond, chances are they are not ready to come down very much off the price. Of course, if your first offer was ridiculously low, the blame lies with you. I am talking about an offer that is not less than 15% off of the asking price. If you make an offer within 10% of the listing price and they don't respond or only come down a very small amount, you can be sure you are dealing with a seller prepared to drive a hard bargain. It is up to you whether you want to continue or start looking elsewhere.
•4. Bank Owned listings are very difficult to lowball. You would think it would be the opposite, but it's not. In many cases, the banks price the properties to sell and because they are already priced low, they will not come down very much off the price. Even if an REO property is overpriced, the banks would rather just wait a month or two and then lower the price than take anything much below 5% of the asking price. I have had personal experience where I presented the same offer every month, for four months in a row, before the bank finally accepted it. Since Bank Owned properties are usually priced fairly well, you can get a great deal most of the time.
•5. Keep in mind, if you manage to get into escrow in any of these situations, the seller will most likely be very uncooperative when it comes to making repairs. In almost every instance I have been involved in, the seller will not want to make any repairs or help out in any way. They usually feel like they are giving the property away and refuse to pay anything to get the home in better shape. This is not always the case, but it something as a buyer you need to be aware of.
One strategy I have seen be fairly successful in these situations is to make a good offer and then walk away if the seller is not willing to bend. In many cases I have had the listing agent call after a week or so to see if my buyers were still interested. Oftentimes, the seller will not get another offer right away and will start to second guess themselves and start to think that maybe they should have not been so hasty in rejecting the offer. In many cases, the first offer is the best offer and the longer a home remains on the market, the staler it becomes. The most important thing for a buyer looking for a good deal is to be able to walk away from something that does not benefit them. If you are too eager, you will play right into the seller's hands.
Originally published at www.mypropertysolution.com
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