Momma Has the Las Vegas Bank Owned Auction Pricing Blues!

By
Services for Real Estate Pros with Savvy Home Pix B.1000860.LLC

Las Vegas Foreclosed HomesYep, I admit it, it's not fun out there selling real estate in July/August heat.

Our market has gone from frenzied to down right I-don't-even-know-if-there-is-a-word-in-the-English-dictionary-to-describe-what the heck is going on here.

 

 

 

 

First of all I think two major events occurred to bring this on:

  1. The banks <it seems> all want to hold an auction in a moving market and lower to "fire sale" prices
  2. Non-Profit DPA is expected to disappear Oct 1, 2008

I just want to address the first issue I brought up.  It is BAD, really really really really bad.  So bad I can't put enough "really's" in that last sentence.

Let me just give an example of an offer one of my buyer's agents submitted July 28.  That was 11 days ago.  This home was on the market since the 21st which was 6 days prior to that.  It had 10ish offers on it when we submitted the offer, haven't heard back from the agent, keep calling and it is STILL listed as available some what 17 days later.  It is priced 30% below closed comps from June 1, 2008 till now.  There is no lack of pendings that are listed at 20-30% higher.  This house has four walls, foundation, appliances and is not hindered by fire damage or doesn't appear to have any other issues that we can see.

I can't imagine the nightmare of how many more offers have come in since then.  I am really getting to the point where I don't care but care enough to blow off some steam.

Where are these banks getting these prices from?  Stuff is moving, stuff is selling.  If it is moving and selling in a particular subdivision, there is really no need for this type of pricing nonsense and there is no way to prove on a BPO that homes are going for that fire sale price on a non-fire sale home.  The home that sold for 30% more (model match even) just a few weeks before, was on the market 2 days.  TWO FULL FREAKING DAYS!  It's not like there is even really an issue with hold times when homes are priced properly. 

Buyers are out there and they WANT to buy because of the DPA issue.  It is taking longer because they don't believe me when I say these fire sale prices are not real prices and these boogers are going for 10-30% more than what they are priced at.  Hey Buyers:  It's all fun and games until you lose one, two, three or more houses that you fall in love with.

And then the problem is:  There are the homes out there priced JUSTTTTTTTTTTTTTT right that the buyers lose out on because they refused to make a decision while playing with fire sale or auction priced homes.  They lose out on these homes that are listed for short periods of time (15-30) days because one buyer came along and wrote one offer and the bank took it. 

Moral of the story:  Buyers shouldn't play with matches or hold all their eggs in one basket at this time.  Look at CLOSED comps and be realistic with offers.

Here is another reason why this needs to stop:  Future pricing. 

Last 10 days I have had to conduct FOUR CMA's for non-distressed sellers in high equity positions.  Believe me, I can't believe how lucky I am too. 

It took me TWO hours to do ONE pitiful CMA for each property!  Unless we price it at fire sale pricing and allow it to be marketed for two, three, four weeks before the sellers (AKA REAL SELLERS) make a decision we (list agent and seller) can't even compete with the foot traffic. 

It's fun to see half of a subdivision pending, half listed and half closed in two months.  Pretty much, there are hot subdivisions out there that have the potential to end up with only one or two month's inventory.  It's fun to see realistic sales prices, it's fun to see pending prices at 30% below those recent realistic sales prices (NOT!)  It's impossible to gauge a realistic listing and/or sales price right now.  You know, the kind that gets you foot traffic and maybe to net my seller's the "highest and best".

THEN you have to make sure you are being strategic out from the chute so the property can appraise for the sales price if it can sell right away.  Pray you don't get an appraiser that weighs heavy on listing prices right now.

Now I am a little pot calling the kettle black here on this issue because I am guilty of using this sales technique but not to the point where the sellers are unable to make a decision past one week so everyone can MOVE ON.

My BPO's are now weighted heavier on the sale side (since the comps actually exist now.)  Suggested list prices from me will be realistic.  Maybe my competition will hate me but I don't care.

Short sales, they don't even matter even though they are a growing market force.  Their prices are now officially higher as a whole than these prices.

The buyers are confused, the list agents are confused, the buyer's agents are confused.  I don't even know if the banks have a clue in the world on what is going on here so they are probably confused too.  I think I found a term for my really's:  Market Discombobulation.

It makes no sense at all!Las Vegas NV Real Estate

 

Posted by

Thanks,  Renée Burrows 702-580-1783 Broker/Owner, REALTOR®
 

 

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Rainmaker
593,907
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Renee,

Really funny how the banks take forever to give you an answer on a short sale and then they decline or counter when they should think about how if they go into foreclosure it costs the bank more money and then they go and sell the home at auction and it takes a long time to sell because the buyers all low ball with offers and then they end up selling them for even less then if they would just take the short offer and get rid of it and move on. Also they must love to carry so much inventory hoping in 5 yrs it will be worth more...makes no sense and the loss mitigation people aren't really so qualified to get it done and they don't even know the market areas so how can they depend on a BPO that isn't even close?

Aug 07, 2008 09:48 AM #1
Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Renee, Isn't this market fun? i love YOUR term Market Discombobulation. That pretty much sums it up.

Aug 07, 2008 10:57 AM #2
Rainer
14,463
Mike D
Henderson, NV

Hi Renee,

Is there any room on that wall you want to bang your head against for me too?

What I have been told what is happening is that the banks are getting two different appraisals.  One is the market value appraisal, and the other is a liquidated appraisal, which is much lower than the market value and is basically the value of the home if you sold it for parts.  The banks will list at the liquidated price to entice multiple offers and drive the price higher than if they just set it at "market value."

As far as the lack of response / communication / dignity / etc., they won't reject offers on the get go because they need to finish the counteroffer phase with all of the offers that are in a higher position than the ones we submitted.  If by the time the bank gets back to the buyer in 1st position and that buyer already accepted another counter from a different property they also put an offer in on, then they just go down the list and hope they'll get to a buyer that is still stuck.

It really is a filthy situation out there right now.  While the banks are only looking at the numbers and the bottom line, we are the ones with the families buying their first home, and have to witness and console the torture that these people are going through....let alone what we are going through as REALTORS®.

Someday....this too shall pass....

- Mike

Aug 07, 2008 01:19 PM #3
Rainmaker
251,783
Katrina Madewell
Charles Rutenberg Rlty- More than 5,000 agents(813) 777-1196 - Tampa, FL
Tampa FL Homes for sale | Tampa Bay - (813) 777-1196

A fine example of one extreme to the other!  They are trying to get buyers to out-bid each other and over bid on the price, driving a HIGHER market price in the end... at least in our TAMPA BAY market.

Katrina

Aug 07, 2008 03:58 PM #4
Rainmaker
921,874
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Renee - The banks that I've worked seem to have strange objectives. I can read frustration in this post. It will get better, and if anyone can deal with it, it you.

Aug 07, 2008 10:30 PM #5
Rainmaker
135,700
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

Renee,

FUNNY!! I've been looking for a word to describe the current situation. We've found the prices to make them move and the banks still find it neccessary to play the games! Personally, I think sales would be even higher if the games were not being played....

"Buyers are out there and they WANT to buy because of the DPA issue.  It is taking longer because they don't believe me when I say these fire sale prices are not real prices and these boogers are going for 10-30% more than what they are priced at.  Hey Buyers:  It's all fun and games until you lose one, two, three or more houses that you fall in love with."

Market Discombobulation... Too funny!

Great post!! You hit the nail right on the head

 

Aug 08, 2008 11:00 AM #6
Ambassador
1,509,742
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Neal:  Thanks for opening that can of worms!  I really really really dislike working short sales on the listing end.  Trying to convince them to take it, market goes down, lose buyer 1.  On buyer 5 on a short sale I have had listed since Jan.  They REALLY don't get it.  Luckily our last BPO came in where we need it.

Bryant:  Let me just say:  It's more fun than doing nothing at all :)

Mike:  Thanks for the perspective.  It is definitely better than last year, other than the torture part!

Katrina:  I am glad we aren't the only ones feeling the pain here!

Larry:  Thanks :)  I do need some encouragement.  Yesterday was just a plain yucky day!

Paul:  I am glad ya like it!  You are perfectly correct when you say that sales would be higher if they just priced it properly. Some buyers are definitely feeling hopeless.  I had one buyer lose out on their first contract last week (even after prepping them) and she just wanted to give up!

Aug 08, 2008 12:42 PM #7
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524,293
Virginia Hepp - Mesquite NV REALTOR
Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

Market Discombobulation - I had to cut and paste it, can't spell it!  I like that better than the term I have been using - helter skelter.

This buyer's market we are in is very hard on the buyers, too, you are so right, we are all confused.  Pretty tough time to give advice in.  This is the first market I have been in where the appraisers are giving more weight to listing comps than sold comps.

Aug 09, 2008 05:33 PM #8
Ambassador
1,509,742
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Virginia:  It's crazy all around huh?

Aug 10, 2008 04:28 AM #9
Rainmaker
593,907
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Hey Howd you jump to the top? you must have paid:)

Aug 10, 2008 08:05 AM #10
Rainer
50,733
Greg Knowles Santa Barbara Ca.
Fidelity National Title Group-Santa Barbara - Santa Barbara, CA

Wow, that is a crazy market. I hope you feel a little better now after venting. ;o) I was put in charge of doing a joint venture with a huge office in Vegas and they have had their challenges keeping it together.

 

Aug 11, 2008 06:25 AM #11
Ambassador
2,742,788
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I don't even know if the banks have a clue in the world on what is going on here so they are probably confused too

I don't even know if the banks have a clue in the world on what is going on here so they are probably confused too

I don't even know if the banks have a clue in the world on what is going on here so they are probably confused too

Aug 11, 2008 10:43 AM #12
Rainer
82,781
Patty Carroll
Vancouver, WA

Renee, great post. What we can't understand is why the banks can't come up with a better system. They must know that what they are doing now is not working.

Aug 12, 2008 02:18 AM #13
Rainmaker
135,700
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

Ahhh... I remember the old days of buying HUD homes and having a deadline to submit the bid online and the results (winner) were displayed a couple of days later..

It was a much better system then what is currently in place where the deadline is based on how many offers are submitted.

It seems we've gone backwards in technology and transparency...

Market DiscomBoobulation :)

Aug 12, 2008 07:39 AM #14
Ambassador
1,509,742
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Neal:  You know me :)

Greg:  I can only imagine!

Lenn:  Say it one more time :)

Patty & Scott:  Who knows, I think much of this came too fast and too furious for them!

Paul:  Discomboobulation....LOLOLOL!

Aug 12, 2008 01:28 PM #15
Rainer
20,112
Steve Dibert
MFI-Miami - Fort Lauderdale, FL

Renee,

Have you considered a Forensic Loan Audit? We have found, and I'm not saying this to solicit my business, that lenders are quicker to respond and more eager to cooperate on a short sale if the homeowner and the realtor having a skilled mortgage professional examining the client's file looking for fraud and errors that were committed by the lender.

Steve

Sep 21, 2008 02:43 AM #16
Rainmaker
378,655
June Stark
Elite Realty-Luxury Homes & Condos On & Off the Strip - Las Vegas, NV
Las Vegas Condos & Luxury Homes Expert

Love your terminology - It is getting worse & worse.....Banks are getting even more anxious to turn their toic paper to cash & that is killing th eprice structure.  If a person doexs not need to sell - keep those puppies OFF THE MARKET.

Sep 21, 2008 03:54 PM #17
Rainer
2,000
Scott Durham
Coldwell Banker Select Real Estate Group - Reno, NV

Renee,

I feel for you! We have the same up here in Reno. All we can do is stay positive and keep working!

 

Oct 04, 2009 01:05 PM #18
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