Thursday, July 12, 2007

Taking offers personally (Y2/M3/D2)

Given my post today on L.A. Land was about how exorbitant list prices offend me on a personal level, I feel compelled to share the other side of the coin. Here's a brief excerpt from the listing agent's "vent":

"The problem is that I [the listing agent] know a home's intrinsic value and I know that there are offers that just don't even come close to that. So when a buyer's agent (or in this case some investment company who claims that a family member is in desperate need of a house) knows that they can't afford this certain area but they come in anyway to insult the sellers with their ridiculous offers, I get a little steamed."

I think that making a true low-ball offer (say, 10% or more below list) just isn't going to fly so why make it? Personally, I wait for a price reduction so that my offer is closer to list. But I wonder: is it just a rookie mistake or does it actually fly now and again? Hmmm.

4 comments:

Agent Scoreboard said...

I don't agree with nathan. There really is no transparency in home values and they are subject to the whim of the capital markets. If money tightens, "intrinsic" value or not, the pool of buyers is smaller and supply and demand kick in and prices must drop. If prices drop faster than you anticipate, sorry... let your house sit on the shelf for a year. Seems unreasonable to think that your going to make a profit in a tough market, if your selling you should get as much as you can as fast as you can. The debt service is going to kill you.

Tyrone said...

A rookie mistake to offer what you think a property is TRULY worth? Offer away. Plant the seeds of revolution. My philosophy in life: Only pay what you think something is worth. When faced with difficult purchase situation, examine the cost vs benefit.

If you're only talking about a 10% low-ball offer, sooner or later you'll get a call from that seller at a later date to accept that offer. When that day comes, DO NOT pay.

The moral of the story: desperation will be the norm in this messed up market

ProblemWithCaring said...

Sometimes it takes those "ridiculous" buyers and their "insulting low-ball" offers to spur these "hardworking" - and capital maximizing - sellers and their "value-conscious" agents into lowering their (over) priced homes.

Then more "veteran" buyers can happily make more "reasonable" offers.

So it works out.

Susan said...

I did this recently, just to test the waters. Sitch - short sale, crappy house, last sale 101k back in the 90s, now they want 260k (out here in Riverside) Here it is:

http://www.redfin.com/stingray/do/printable-listing?listing-id=639438

Sooo, we have a family, facing forclosure, who took out a ton of money, and DID NOT spend it on the house (seriously, it has original 1940s cabinetry, not that there's anything wrong with that). It is dirty, and unshowable.

About a month ago I offered the agent 160k. He kept pulling out comps of yore and insisting that there was 'intrinsic value'. Here's what I said. "I bring the money, I decide the price. Call me when the bank gets serious about offloading this dump."