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Paul Kaplan's Blog

By Paul Kaplan | Agent in Palm Springs, CA

Why isn't the seller accepting my offer that is 50% below the asking price?

What is a realistic offer in this market? Clients come to me all the time and say, "I WANT A DEAL."  The media talks about all the great deals in real estate- and there certainly are bargains to be had! You may find good buys on properties priced 50% below what the property previously sold for  However,  here is the reality:

SELLERS ARE NOT ACCEPTING OFFERS 50% BELOW ASKING 

Buyers need to be realistic and study the local statistics when making offers. There are numerous issues to consider when making an offer, among them, the days on the market, comps, the condition of the property and location. Most REO/Foreclosure property asset managers won't even respond to offers that are more then 10% off the asking price, from my experience.

Ask yourself this:  Do you really want to purchase a property? If so, the buyer's goal should be to make a reasonable offer that a seller will respond to, and that could actually turn into a negotiated acceptance.

In the city of Palm Springs, here are the stats since August 08 from the MLS:

Condos

# of Sales  131
Avg Days/market  111
Avg Sales price-% of Asking Price  94.04%
Lowest %   70%
High %   117%


Single Family Homes

# of Sales
  144
Avg Days/market  111
Avg Sales price-% of Asking Price  94.06%
Lowest %   77%
High %   119%

As can be seen, no deals were accepted below 70% of the asking price.  The average is 94%.  And in some cases, when properties are priced well, they are selling at over the asking price, with multiple offers.

YES you can find a great buy in today's market.  There are DEALS to be had.  Prices are the lowest they've been in 5 years!  My goal as your agent, is to negotiate that excellent buy for you.  However, start the process with realistic expectations. You'll find a great deal, but not a steal.  Sellers are not giving away their properties. Maybe you'll buy a property at 95% of asking price-  that still could be 50% less then what it was valued at 4 years ago and you'll be walking away with the buy of a lifetime.

Contact me today at paulkaplan5@aol.com or call at 760-285-8559 and let me show you what great deals are out there in today's bargain priced market.  www.PaulKaplanRealtor.com

Comments

By WillyWanker,  Thu May 28 2009, 19:35
No one should be afraid of offering 50% under the asking price. The worst thing that can happen is the seller may say 'no' or just ignore your offer. Should people still be allowed to list their properties at 2007/2008 prices? As if the real~estate collapse had never happened? Should sellers be allowed to price their homes way beyond the current sales prices? Yes, of course they should be allowed to do this. If they find an agent to peddle their over~priced houses and to spend money advertising houses that will NEVER sell for more than people paid in 06/07/08 then they should of course be free to do so. But buyers are also allowed to slap these sellers in the snout and offer whatever they feel is a fair price for a house. As prices continue to drop one needs to offer what one thinks a house will be worth in the coming year. Not what it may have been valued at when the market was in full 'bubble' exuberance. If an agent is unwilling to present your offer to the seller find yourself another agent. Find an agent who is willing to represent your best interest.
By Paul Kaplan,  Thu May 28 2009, 21:31
It is true that some agents take overpriced listings, which personally I think are a waste of time. However typically if a seller wants to over price his/her property, they're unrealistic regarding the current value of their property- so chances are a 50% offer isn't going anywhere. Of course, feel free to make the offer! But as can be seen from the above statistics, its doubtful you're going to get anywhere with it.
By Voices Member,  Thu May 28 2009, 21:35
Many homes will sell for 50% below their asking. It is just a matter of time. Let em rot so that when the seller finally comes around you can offer even less claiming rat infestation and the like.
By Dan,  Fri May 29 2009, 05:22
Paul,
Just out of curiosity, does your above numbers include foreclosures, short sales, and FSBO's? Most agents tend to leave those out since they are under the impression that they somehow "distort" the numbers.
By Michel Higgins,  Thu Dec 31 2009, 06:43
There is another issue with this point. That is the appraisal issue. Regardless of the asking price, if an offer is made too high above appraised value, one may not be able to find a lender willing to loan.
Yes Paul, a big part of our job is to educate our local buyers with local real estate facts, stats, etc...

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