Buyer's Market...or is it?

By
Real Estate Agent with RE/MAX of Naperville

In order for it to be a buyer's market the seller has to agree to sell.

I am working with a very nice couple, looking to buy their first home. We put offers in on, not one but, two properties this past week. (Not at the same time of course). Both offers were rejected.

The first home needed a lot of work, has been on the market for a year, on the 3rd listing agent and the seller would not work with our offer.

The second home, a little newer but, over priced. The sold comparables showed the same model home, same condition, same location, sold for 20K less than what the sellers are asking. We submitted our offer based on the comparables, but they just flat out rejected the offer.

Unfortunately in both cases the sellers are going to lose. I ran the stats for the area and YTD they are down, 38% units sold, down 12% average sale and down 13% median sale. In speaking to a local agent, the priced are definitely not going up.

I just don't get it. Confused in Naperville.

Your comments are appreciated.
Posted by

Maria Mastrolonardo is a full time Illinois Realtor-Associate with RE/MAX of Naperville specializing in Short Sales. She has been helping home-buyers and home-sellers since 1997. She can help you with any questions or information regarding Short Sales for the Western Suburbs of Chicago which includes but not limited to; Naperville, Aurora, Downers Grove, Lisle, Plainfield, Bolingbrook, Warrenville, Wheaton and Woodridge.

To reach her call/text at (630) 248-6077 or mmastrolonardo@gmail.com

 

You can also find me here!

 

                                    

 

RE/MAX of Naperville is not associated with the government and our services have not been approved by the government or your Lender. Your Lender may not agree to the change of your loan and/or a Short Sale.

Photo: Microsoft Clip Art

 

 


 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Groups:
Realtors®
RE/MAX Active Rain Bloggers
Chicagoland and Northern Illinois Real Estate
REALTOR LIFE
Tags:
home sellers
home buyers
naperville il real estate
maria mastrolonardo

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Patrick - That's right. Thanks for your comment!

May 10, 2008 07:00 AM #8
Ambassador
1,880,144
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Maria, the buyers determine the price based on the competition, and the sellers have to live in that reality. If there is too much to find that is better or equal for lower price the higher priced houses will sit. Sellers have the right not to give their houses away but they may have to wait more time to get their price.

May 10, 2008 08:06 AM #9
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Gary - Good points! Thanks for your comment!

May 10, 2008 08:25 AM #10
Rainer
120,567
Brenda Carus
Century 21 Zwygart Real Estate - Monroe, WI

The market is what is it is.  Yesterday I had to tell a woman that her home was worth about $25K less than her husband was hoping list for.  I hope it didn't burn a bridge, but I will not take an overpriced listing. I have one right now that I inherited from another realtor in our office, and I am still trying to get that seller down to the right spot. 

I don't know if it is necessarily a buyer's market or seller's market here right now, at least for the starter homes midpriced homes.  There have been a lot of homes moving quickly in these ranges lately - multiple offers and full price offers coming within days of listing IF the homes are priced right.  For more expensive properties, it is a buyer's market.

May 10, 2008 08:27 AM #11
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Brenda - Great points! Thanks for your comment!

May 10, 2008 08:31 AM #12
Rainmaker
298,299
Marilyn Katz
Berkshire Hathaway HomeServices New England Properties - Westport, CT
ABR, e-PRO - WestportCTProperties.com

Maria-  Certainly, the market determines the price, and the sellers have to live with it.  However, it is not always the seller, who is unrealistic.  I wrote a "Buyer's Market" blog, yesterday, from the other point of view. 

There are some buyers who are convinced, they can buy a property for 30-50% of listing price, no matter how low that price has gone. 

Just like unrealistic sellers will sit with their unsold homes, unrealistic buyers will miss some great purchase opportunities.

May 10, 2008 08:44 AM #13
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Marilyn - That I can understand, it's unfair to the seller trying to buy for 30-50% under list. But in our case, we just want to be where the comparables are.

May 10, 2008 09:00 AM #14
Rainer
6,627
Juan Boldizsar
Belleville, IL

I listened to a very interesting interview with Walter Sanford the other day.  He offered a really good way of avoiding the problem described in the initial post:  only work with sellers who have a high level of motivation to sell.  The ones who don't have that motivation will end up acting like the sellers described in the initial post here.  They're the folks least likely to "bite" on anything but a full price offer.  I am not a real estate salesperson, but it sure seems like those folks take a good deal of time away from more rewarding endeavors.  On the other hand, I imagine that those with a high level of motivation, usually resulting from a circumstantial need, are much more realistic in evaluating offers and responding to their agents' advice.

The bandwagon that a good deal of people seem to have jumped on is the short-sale.  There's definitely a pressing need, and hence, motivation there..... but I can imagine that those are anything but pleasant transactions.

This comment would end up being much too long if I listed out every circumstance described in the interview as giving rise to "highly motivted sellers;" however, one that seemed rather fertile is divorce, the most obvious source of which is divorce lawyers.  Somewhat less obvious is loan officers who work with divorce attorneys --  if the spouse who wants to stay can't buy out their ex because they don't qualify, the LO can always refer a salesperson.  There are a few more in the interview.

If your favorite LO hasn't already given you a copy of the interview, feel free to get in touch and I'll get you a complementary copy.  I listened to it and it sounded like some pretty neat stuff.

Best regards,

 

 

 

 

 

May 10, 2008 06:02 PM #15
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Juan - Thanks for sharing the information! You have some great points.

May 11, 2008 03:05 AM #16
Ambassador
3,092,992
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Maria:  Some sellers just can not face reality.  In a situation like this, it may be time to take your buyers to a bank owned property.  Those are motivated sellers!

May 11, 2008 03:31 AM #17
Ambassador
1,486,051
Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

The sellers are not motivated, and their part time agent does not have the maturity to tell the sellers the truth.  Easiest thing to do is say "NEXT!"  They are not bargains, so there is not point fretting.

May 11, 2008 03:38 AM #18
Rainmaker
290,032
LaNita Cates
REMAX of Joliet - Joliet, IL

I hope their agents are telling them to wake up to reality. There are sellers out there that just are in a fog and think they are going to make huge money on their homes and that is not true. The comps are there for a reason. Good luck.

May 11, 2008 04:24 AM #19
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Chris - Exactly, I need to find them motivated sellers.

Jim - Next is right, I not going to have my clients overpay only because the sellers are not motivated.

LaNita - That's just it, I don't think the agents are doing their job. They are not motivated either.

May 11, 2008 09:19 AM #20
Rainer
38,430
Pete Rondello Sr
Coldwell Banker Mulleady Inc. - Boulder Junction, WI

G-R-E-E-D. It has become pervasive. When people realize that the journey is worth more than a few extra $$, they will understand that you were bringing them their next gift of life's journey, and they passed. Hang in there Maria!

May 14, 2008 02:49 PM #21
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Pete - You're right, unfortunately people do get greedy, but in the long run it ends up costing them.

May 15, 2008 03:11 AM #22
Rainer
33,547
Ryan Servatius
Century 21 Affilaited - South Haven, MI
Waterfront Communities

Maria, we are seeing this as well in Southwestern Michigan. Alot of this confusion is coming from the mass media and their daily reporting on how everyone is taking huge losses. Also commercials are saying that people can get homes for pennies on the dollar. 

Now granted, the repossessions are going for very low amounts, but they also tend to be either way out in a location that is not near anything or they are in horrid condition.

I do my business along and near Lake Michigan where prices have kept their own. Now that is not to say, they have not come down on the sellers asking price, because they should of. For to long sellers were fishing the market and now are understanding if they want to sell they need to get realistic. We do of course have the occasional Realtor who just wants a sign in the yard and will over price a listing, but after 6 months they will have an angry seller to answer to when they have no sale.

The biggest thing that has helped me is to educate the client regardless if they are a buyer or seller what the TRUE market is currently where we are at.  What works in South Haven Michigan is different from what St. Joseph or Saugatuck & New Buffalo will take.

Try to educate the buyers on a specific area before you go out and see the homes, this will help them establish in their mind what price they believe they can come in at for an offer.  Same needs to be done with the sellers, they need to know what the market is REALLY doing.  I write a monthly market update column in our local press and I feel it is getting sellers the facts and figures they need to see from our stats to make a decision to keep or lower their prices of their properties.  If not, they know that their competition will listen and thus get the buyer...

 

May 16, 2008 05:35 AM #23
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Ryan - You make a lot of good points. Thanks for your comment!

May 16, 2008 07:03 AM #24
Rainer
46,117
Greg Zaccagni
The Federal Savings Bank - Wheaton, IL
Illinois Mortgage Lender

With all the hight LTV financing that was previously available you may want to consider asking the sellers to give you an idea how much equity they have in the property.  You can justify it as part of preparing an estimated net at close for them which includes comissions propoerty tax etc. 

With comperabes you can look at the likely sales price and determine whether the will be below water.  If so you can be proactive about discussing short sale possibilities and determine whether the situation is a good investment of your time.

www.MortgageAdvisor.info

 

Jul 01, 2008 01:39 AM #25
Ambassador
1,486,051
Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

Just because their home is listed, doesn't mean they are serious sellers.  They should not be listed if the pricing is not in tune with the market.

Jul 01, 2008 02:05 AM #26
Rainmaker
74,147
Maria Mastrolonardo
RE/MAX of Naperville - Naperville, IL
Realtor, Naperville, IL Real Estate

Greg and Jim - Thanks for your comments!

Jul 03, 2008 01:49 AM #27
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
74,147

Maria Mastrolonardo

Realtor, Naperville, IL Real Estate
Ask me a question
*
*
*
*
Spam prevention

Additional Information