Short Sale Home for Sale

Many people in the market today are trying to buy a house from banks and many have put many offers in on various homes. Many of these
Buyers put an offer in, even on houses that have no other offers, and that have been on the market for a long time, all of a sudden many offers come in — sometimes within 24 hours!

Then the bank goes with the higher offer, which confuses Buyers because their agent told them there were no other offers. This has been very depressing for many buyers and many buyers just leave the market.

Being a buyer in today’s market is nearly as frustrating as being a seller. You read and hear all day long about what a strong buyer’s market it’s supposed to be and what great deals there are to be had via foreclosures and short sales.

But when you start making offers on properties you find that the banks are nowhere near as willing to negotiate as you expected, and that many of the bank-owned homes cannot be bought without prevailing over a sea of other offers.

Depressing and frustrating — yes. But there are some strategies Buyers can and should put into play to better their chances going forward.

Home for Sale in Kings Pines

With an individual seller, you can minimize the chances of being outbid unawares in a couple of ways. You can put a very, very short time frame on your offer, eliminating a window of opportunity for other buyers to swoop in on the property.

Also, most listing agents in “regular” sales want their clients to get the highest possible price for their home, so it’s common for them to ring up any previous people who might have made an offer, to let them know when additional offers have come in, to give them an opportunity to increase their offers or otherwise make them more competitive.

You can’t force a bank to respond to your offer in a very short time frame, or in any time frame at all, for that matter. I once sold a bank-owned property in a transaction where the time frame between when we submitted an offer and when we received the signed acceptance back from the bank was 3 weeks

Whatever it is that caused a buyer to be interested in a property at this point in time could very well be inspiring other buyers to make an offer at the same exact time. So, even when their agent is told that there are no other offers at the time they make theirs, they need to do several things.

First, they need to enlist their agent to stay in very close contact with the listing agent — as often as two or three times a day is not overkill — once their offer is submitted.

A buyers agent should not only be calling the listing agent frequently to check and see whether other offers have come in — they should also be asking the listing agent upfront to notify them if additional offers come in.

Additionally, a buyer should consider changing the approach to formulating the price you offer for a home. Buyers will have a better shot at getting a home if you offer a price more in line with the recent sales in the area, versus just offering something below or even at whatever the list price is on the home.

Every time a buyer wants to make an offer, they should sit down with their agent and get an analysis of the recent sales of similar properties in the area. If they are making an offer on a bank-owned property, the Buyer should look at those sorts of sales. It’s critical that Buyers not only look at the recent comps’ list price, or sale price, but their list-price-to-sale-price ratio.

For example, if a home’s list price is $100,000 and it sells for $110,000, the list-price-to-sale-price ratio is 110 percent.

So, for example, if the other homes are selling for 107 percent of their asking price and a buyer is seriously interested in buying a home that is listed for $125,000, you would multiply $125,000 by 107 percent and consider an offer price of $133,750.

Some buyers get hung up on the idea that they are “overpaying” if they make an above-asking offer, but the reality is that the list price is not the actual price of the home — it’s a starting point for upwards or downwards negotiations, depending on the local market dynamics and how the list price was set vis-à-vis the fair market value of the home.

Getting a great deal is not necessarily the same as paying at or below asking; just think — if the list price is set too high, then offering to pay it isn’t a better deal than if you offer above-asking on a place where the list price is set way too low. This is why it’s so critical to rely heavily on an analysis of recent comparable sales to drive your offer price, rather than just on the list price or what the listing agent tells you.