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Foreign Investors

Real Estate Sales Representative with John Hall & Associates

I am currently working with a foreign investor as a buyers agent. The  offers my clients are submitting are extremely low in regards to the listing price. I provide comps on the properties but they continue to be unreal with their offers. Just wondered if anyone else is experiencing this same scenario, and if so, did you continue to work with the client or move on? Thanks

Michael Sahlman
www.HomesForVIPs.com - Keller Williams Realty - Miami Beach, FL
e-PRO - Miami Beach Florida Luxury Homes

Hi June. read your post and I have had several buyers from Canada and Europe who thought they could come in and buy for 50 cents on the dollar even after I had presented them with the best listings in the areas that they were seeking. One of the questions I always ask them is- how did they come to the belief that they could buy it for such a discount. Typically the response is reading the paper or watching TV. You would be surprised at how many investors do not really understand the market. The answer to your questions is, I believe, to educate them thoroughly as to what the closed sales are selling for on average in each area, the sales price as a % of the list price (so they see what the average SP/LP), the number of listings and the original list price along with the percentage decline in price to the current list price. This way they begin to understand that in some buildings or neighborhoods (for houses) there already have been some major adjustments in price. After that, they can usually eliminate themselves or you can ask them how serious they are or what would they consider a good deal? Then at some point you have to cut them loose if they are not willing to be realistic. Best of Luck -Michael Sahlman, Miami

May 29, 2008 03:09 PM
Kathy Brown
RE/MAX Alliance - Johnstown, CO
Sells Northern Colorado

I am working presently with a couple who are doing something similar, and each time we consider making an offer on something, I pull histories, comps, SP/LP percentages etc., and they continue to do their research on their own, pricing each element of a home (for instance, the type/model of furnace or solar system, the type of appliances, on and on) then they add the tax assessed value for the lot and say this is what they will offer.  In other words, they are considering some sort of replacement value as the market value, which we all know is simply not the case.  I have really done my best to educate them and explain the concept of market value to them, demonstrating it with actual sold comps, etc. but they insist on low-balling so much, then ask if it's worth making the offer.  So far we have not come up with an offer on anything that I have been able to tell them is worth making (with the obvious note that I will present any offer they want me to) but they always back off, accepting the fact we're just too far apart.  I am going to cut them loose until I see the blue light special, 40% off sale, then I'll get them in there to write something! 

May 29, 2008 03:44 PM