Are we seeing a NEW TREND in Real Estate?

By
Real Estate Broker/Owner with Godzyk Real Estate Services NH License 033394

I sat by the lake going over 12 offers on my new Manchester NH area home listing. I am seeing a new trend. 11 of the 12 were over asking price. That is not new. But 5 of the 11 were WAY over the listing price. One offer $50,000 over the listing price. Now before you say the listing was under priced, it was not. It is priced right at market value.

 

I concentrated on the wording on those 5 offers. All are getting a mortgage and from 3.5 to 30% down. I was looking for those who waived the appraisal. None had. There was a few that offered to pay up to a certain amount if the appraisal came in low. The others would not pay any difference really making their higher offer worthless.

 

So what is new? The new trend is buyer agents so willing to write offers so high over asking price with no guarantee that it will appraise. My thought is no way it will appraise $50,000 over asking price, yet the buyer agent listed a whole page of reasons "it might". As I do appraisals, none of these reasons hold water or will raise the value of a home.

 

In our current market we have more buyers than houses for sale. Buyer agents are looking for any reason, trick or advantage to get their buyers offers accepted. SO offering a price so high it may catch the sellers off guard. Offers so high that they wont appraise. That they full well know the price will need to be reduced in order to get a mortgage. The key fact is "knowing their buyers do not have the money to pay for the difference between offer price and appraised price.

 

Offering $50,000 offer asking with no will of the buyer to be able pay the difference bewteen a lower appraisal and what they offer frankly makes their offer worse than if they made a strong offer at a reasonable price.

 

 

THE MORAL OF THE STORY is that you have to read everything. You then also have to understand what you are reading. You also have to know value and appraisals very well. This is a time when we can head off appraisal issues by looking reality over a dream. Low appraisals are deal killers and we can stop this problem in some cases from the start. Imagine having the sale go right from the start. Imagine a Realtor answering their own phone when you call. Imagine a listing process that reduces or eliminates your stress. Imagine an agent who works for you while supporting you through out the selling process. Imagine a locally owned and operated business that supports your local schools, sports and kids activities.

 

 

THERE IS NOT NEED TO IMAGINE any longer. You have me. A locally owned Real Estate company that works for you. That is here for you and can help you will all aspects of the selling process.

 

WHAT SHOULD I DO NEXT IF I AM THINKING OF SELLING? You should reach out to me today. Email sctprop@aol.com or call me at 603.661.2121. I can come see your home. Tell you what it is worth in today's market. I can go over where you want to move to. I can go over your time frame. I come complete with tips how you can get top value and make the selling experience better. We can discuss if now is the time to sell or if you should wait. We discuss how to save you money while getting the best price for your home.

 

 

In the end, the most important thing in Real Estate for me is provide GREAT SERVICE. I want to stand out from the crowd. My philosophy is simple. To provide more personal and professional service to guide my clients through each step of the selling and buying process.

 

All agents are not created equal and every consumer should take the time to hire the BEST not just the biggest agent. Let me show you there is a difference. Please Support locally owned and operated business.

 

Locally owned and operated since 1985.

 

 

To CONTACT Scott Godzyk please call 603.661.2121 or EMAIL: Sctprop@aol.com .

 

About the Author: Scott Godzyk is the Owner/Broker of the Godzyk Real Estate Services in Manchester NH. Proud to be locally owned and operated with 35 years of experience, Scott is a leading Agent for Listing and Selling Homes in this area.We are Full Time Agents ready to serve all of your Real Estate needs. Servicing Hillsborough, Rockingham, Merrimack and Belknap counties. 

 

    

 

 

Comments (30)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Scott Godzyk I am not seeing offers $50,000 over asking, but many of the Buyers I am giving Pre-Approval Letters to are making offers over asking price.  Each and every time I tell them what will happen if the property does not appraise.  They can offer whatever they want, but we will only approve a mortgage up to the appraised value.  Anything over that has to come out of someones pocket.

Jan 16, 2021 12:16 PM
Anna Banana Kruchten CRS, CRB, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

Hi Scott we've been seeing over list price offers  ($10K  to 30K +) on and off for years now.  Most, if not all will not appraise that high.  Buyer needs to be willing to pay cash over list price and proof they have the funds to do so. I have had quite a few successful transactions like this and all worked out fine.  And you're so right.....you've got to study and know those offers really well.

Jan 16, 2021 03:38 PM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Great advise Lise Howe , i get puzzled how many people do not read

Jan 16, 2021 03:43 PM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Every one is looking for an advantage Debb Janes EcoBroker and Bernie Stea JD , i just told a buyer "make better offers" when they asked why their offer was rejected.  I wanted to say hire a better agent as the advice they got was horrible. 

Jan 16, 2021 03:45 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good afternoon Scott Godzyk ,

Almost every offer coming in in Austin is way over asking and most all offers have waived the appraisal, not asking for a Home Warranty and a high Option fee. it's getting crazy out there!

Jan 16, 2021 04:22 PM
Janice Zaltman
United Realty Group - Boca Raton, FL
South Florida Residential Real Estate

You bring up great points Scott Godzyk. For single family homes in South Florida, there have been lines of buyers waiting to make offers over asking price. Thought they had already been educated that they would be required to pay the difference in cash between the appraised value and their offer. What a slimy tactic to have their offer accepted. Do you get appraisals before you take the listing? Like also your imagine this...  Let's include agents that know how to write up a contract and adhere to the timelines, not their own imaginary timelines.

 

Jan 16, 2021 04:57 PM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

So true on all the necessary points.  I have ha offers coming in well over asking with FHA loans and then asking for exorbitant seller concessions as if that too high price is all that is important.  It still needs to appraise.

Jan 16, 2021 05:49 PM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Scott- it's interesting reading your post and the comments as well. It does sound kind of wild out there. 

Jan 16, 2021 05:50 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

These are things that happen every year and a half or so in and out ebbing and flowing that way. This is OK stuff in my book because everything comes around eventually

Jan 16, 2021 07:59 PM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Scott,

Too few homes, too many buyers. Tough out there for everyone right now.

Jan 16, 2021 09:15 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Good thing your sellers has an agent who knows what he's doing. I feel sorry for sellers who accept an offer that is incredibly high and it doesn't work out and all the other original buyers have bought other properties. Oops.

Jan 17, 2021 05:17 AM
Scott Seaton Jr. Bourbonnais Kankakee IL Home Inspector
SLS Home Inspections-Bradley Bourbonnais Kankakee Manteno - Bourbonnais, IL
The Home Inspector With a Heart!

I just hope it never gets to the point here that waiving inspections becomes a rule of thumb. I do get calls every so often from FSBO buyers. No inspection, no agent, no lawyer, no nothing. Just buy a house. Then when things start going wrong, they look for help. Sorry folks, you got nothin.   

Jan 17, 2021 05:26 AM
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse specialist

Wow that is a fascinating trend, something I don't come across. Why would a seller consider offers that aren't very likely to appraise? Personally, if I were the buyers agent, I would recommend a conservative route knowing that so many people are being aggressive without any grounding in reality. I guess at the end of the day it's also about relationships as well- because if I know the listing agent is intent on reviewing offers with a grounded reality then why write offers that aren't. 

About half my deals are all cash- and even those where the buyer is financing, I am always concerned that a low appraisal could kill a deal. That said- the majority of my financing buyers are putting down 30% or more- so a low appraisal doesn't often change things. 

Jan 17, 2021 05:49 AM
Paula McDonald, Ph.D.
Beam & Branch Realty - Granbury, TX
Granbury, TX 936-203-0279

We are in a housing deficit as well. The old appraisal issue always comes up as a reality. And yes, many other factors create a good offer aside from the price. Great post.

Jan 17, 2021 07:37 AM
Sharon Miller
RE/MAX Platinum - Crane Hill, AL

Scott,

Waterfront realtor's like myself, are dealing with a little different set of circumstances. Like many other markets, our waterfront inventory is tight. The difference between our situation and what you described, our valuations have increased significantly over the past two years but large numbers of buyer's, are still living in a "time warp" circa 2001 as it relates to pricing. I continuously deal with buyers, who describe in detail, property amenities in  price ranges, which are significantly higher that what they are willing/able to spend. There are no longer lake home properties for sale in the 300K to 500K range on the lake.........the few which do sell, never hit the market. Buyer's need to make sure that have a clear understanding of market conditions as they begin their search for a property.  

Jan 17, 2021 08:58 AM
Ryne Lambert
Sell My House In Wisconsin - Green Bay, WI
Dedicated House Buyers in Green Bay, Wisconsin!

The market is absolutely crazy right now. Agree with others that terms are just as important, if not more so than price. High price offers with no chance to appraise and no cash to cover is not good for anyone.

Jan 18, 2021 02:03 PM
MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

A super-high offer price without the commitment of waiving the appraisal and finance contingency makes the high number worthless. It must also be combined with the buyer's financial ability to take the hit and still commit.

Jan 18, 2021 02:06 PM
Brenda Mayette
Miranda Real Estate Group, Inc. - Glenville, NY
Getting results w/ knowledge & know-how!

Hi Scott Godzyk .  Great topic! Congrats on the feature.  It's so important that sellers understand beyond the $$ sign and this is why having the right agent IS so important.  We're seeing this trend in our market too and a lot of buyer remorse accompanies it...! 

Jan 19, 2021 04:46 AM
Julie A. Black
KAUAI DREAMS REALTY Kauai Real Property Specialist - Kapaa, HI
CLHMS, CRS, GRI, Realtor, Broker

I always counter back that the price will not change due to a lower appraisal. It's the buyer and seller who determine the sales price, not the appraiser. But I do agree that buyers will try and renegotiate the price due to the appraisal or inspection. It just doesn't work with so many buyers.

Jan 19, 2021 06:00 PM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

"In the end, the most important thing in Real Estate for me is provide GREAT SERVICE." I totally agree!

Jan 21, 2021 05:22 AM

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