This is really VERY simple.
(1) YOU hire the agent to work for YOU.
(2) When properties are located that YOU like, write an offer at the price YOU want to write at.
(3) If your agent wonâ€™t write at that price, find one who will.
(4) Submit your offer and see what happens.
(5) Rinse, lather and repeat.
If you donâ€™t get your offer(s) accepted or even countered, that will be a clue. As for the idea of paying no more than list price, you have to remember one VERY simple fact.
In most cases, the list price is a FAKE price.
Currently, many list prices have no connection with reality. Itâ€™s a modern rehash of the old bait-and-switch. Whether or not you agree with it is totally irrelevant. Donâ€™t like it? Doesnâ€™t matter. Donâ€™t believe it? Donâ€™t make valid offers. Itâ€™s just the way it is.
Here is a post that may be helpful:
Artificially Low List Prices Are Wreaking Market Havoc: 6 MAJOR Emerging Problems
Here's the bottom line, Jeff ... your choice whether you choose to listen to the folks who are telling you what you want to hear to get your business (even if they're out of state and not licensed to sell real estate here, which is interesting) or you can listen to the folks telling you what you need to hear.
If you're chasing short sales, you're starting with a 1 in 7 chance of closing escrow and getting the house just on the basis of the process and the banks' lack of motivation. If you're using the list price as a guide rather than the comps - the comps that the bank is going to use to make a decision whether they will accept the short sale - you're making those odds even longer. You're falling into the listing agent's trap and will be the guinea pig through which they find the real price the bank will accept.
If you want to spend your time writing offers but not actually buy a house, by all means ignore market values and hope to find the one seller absolutely desperate to sell in a traditional sale or the one lender who will approve a short sale at pennies to market value. It's possible. So is finding a four-leaf clover.
If you want to actually buy a house, however, you need to look at the market values so you're working from the same base of information as the lenders or sellers are working from. Without that, you're not buying, you're guessing and hoping.
On a side note, a buyers agent's fiduciary responsibility is to represent you as best as possible. It has nothing to do with blindly doing the buyers bidding when there's no chance of success. The idea of "fire him or her and hire someone else" may sound great but it doesn't get you any closer to actually buying a house. Most people in their lives buy a handful of homes. Some real estate agents are selling the same number of homes in a month or so. (And many aren't, which is why it helps to know who you're working with.)
You need to be in a working relationship where the agent is listening to you, no question. But you also need to be listening to the agent. Again, some agents are desperate enough and are unsuccessful enough that they'll write offer after offer hoping to strike gold. Then there are others, the ones who are more likely to tell you the reality of the situation, who eventually will re-introduce you to the market before you fire them and move on to someone who wants to develop a serious strategy to purchase a home.
Most buyers don't need affirmation, they need information. Unfortunately, you've got so many onesy-twosy agents out there fighting for scraps they'll tell you whatever you want to get you as a client even when they know they're not going to be able to get you a home going down this chosen path.
Most short sales will not approved. The success rate has been low. In fact banks will proceed to auction blocks even there are high offers.
A good realtor will investigate the loan balance, type, approval time, and true valuation so the lenders will want to wait on your application. If you wish to make a highest and best offer the agent will then present your plea. Normally the low balls really do not receive the attention from sellers, or agents. Only those due diligence think through the whole process will have a reasonable shot.
My questions are:
1. How much do you like the home?
2. If the house is move in ready updated and etc. is below the market by $50K from your post comment IF there is a bidding war on home YOUR agent is trying to submit a winning sales offer.
NOTE; Many times we do instruct our clients submit an offer over list price. Much comes into play on behalf of a buyer difficult to determine not knowing everything involved.
Trust your buyers agent sounds as if they are representing you
FYI - banks USUALLY don't counter offer, they DON'T or PREFER not have paperwork going back and forth WHY you need submit your best offer.
Lynn911 Dallas Realtor
At least here in the Phoenix area ... maybe it's different deep in the heart of Texas, but this isn't a Texas thread now, is it?
Being a 'professional' real estate agent means that we help our clients achieve their goals of buying & selling. That duty includes educating them as to what the market is.
The seller's bank is looking at their bottom line, that is why THEY will look at the comps (comparable condition homes in the same neighborhood) & if they think that the listing agent is underselling the home by submitting a low ball offer & that they would make more foreclosing, they will deny the short sale.
By all means, the client should be able to write what ever offer they want once they have all the information, but how is NOT giving a client all the information (including the comps) for them to make an informed decision & then the client not getting the home the client wants, serve the interests of the client? It would not (be professional of the agent).
Now, if the client just wants to go 'fishing' that's another story ;)
It may be hard to grasp what everyone here is saying. A lot of times an agent will have the lsiting and not receive any offers on the home. In danger of losing the home to a foreclosure the listing agent will lower the price to well below the market value of the home. This way they can attract an offer on the home and stay off a potential foreclosure.
Your agent is right in that he has a duty to tell you what comparable properties in the are have sold for. This wya you can make an edcuated descion on an offer price. However; any and ALL offers must be presented to the seller. Regardless of what he feels like if you want to make an offer on a home he owes you that duty and responsibility to write that offer and present it to the seller.
Tell your agent you want to submit the offer and have him do it...If not fire him and move on to another agent who will adhere to yor rwishes.
Having a bank counter back can delay for another 30 to 60 days as they will often take that long to respond. It sounds like your agents were just trying to point you in the right direction.
I think your agent is probably just informing you on the current market there. Your agents recommendation isn't always the right way to go, however, if they have a good reputation and are a good agent I would listen to what they have to say and go forward with your own decision. Maybe your agent knows about neighborhoods that have lots of multiple offers, or that there are already competing offers. If this is bank owned that would explain it in a nut shell. The banks have turned our market into a 3 ring circus by bringing their auction tactics to the open market. Absolutely unbelievable, and very difficult to deal with. If you need to learn what that market is like & assure yourself of bids then write for 300k and see what happens. Banks don't generally counter. They simply accept or reject offers.
Whether a short sale or a traditional deal, you should ask your agent to provide a pricing analysis for the property. It will be based on comps, ie the facts of the market. As a prior poster commented, the bank will have a similar analysis done as well. This tool will guide your evaluation of a property - it will immediately flush out overpricing and will identify great values. Done well, it is terrifically valuable - to guide bidding and negotiating.
Unwavering Commitment to Service
My Blog: http://www.trulia.com/blog/jeanne_feenick_-_new_jersey/
Yes, you can.
The reason tehe agent says to check the comps is because it is not their decision or even the seller's decision if your offer will be accepted. Your offer will be sent to the bank in the short sale and before they will accept the offer they will asl an independent broker to see if the offer is at the current market value. To do this, they will check the comparable recent sales (comps). If you offer is in this range it is more likely to be accepted unless there are special circumstances, such as poor condition of the home, that would bring the offer price below the comps.
Short take time to get approved, especiallyl with the Federal Tax Credit deadlilne looming on April 30 for a purchase contract.
See my website for a free MLS search with no registration: http://www.arizonahomesland.com/freearizonamlssearch.html
Don't rule out a foreclosure property. This is a great time to buy. As you probably know, the $8,000 tax credit has been re-instated for first timers or those that have not owned in three years. There is now a $6,500 Tax credit for existing homeowners. Additionally if you do purchase a foreclosure property, free grant money (up to 22% of the purchase price) is available if you live in the home for periods of 5, 10, or 15 years. This makes inexpensive homes already, even more affordable. The free grant money is available through the state of Arizona or the City of Phoenix. See the link for "Free Grant Money" at: http://www.arizonahomesland.com/forbuyersorrenters.php
If I can answer any more questions or show you some homes or land, feel free to give me a call. I would be pleased to help you.
Jeff Masich, RealtorÂ®
Arizona Homes and Land
HomeSmart Real Estate
Below is a house price prediction site. L.A. is expected to drop prices by 8.9% this year.
I work in SoCal, including LA, Orange & San Bernardino counties primarily with Buyers.
My experience this last year and a half has been that sellers are getting multiple offers. It is not unusual for the desirable & best priced homes to recieve over 30+ offers! & many of these Buyers are savy INVESTORS paying cash! so they are incredibly well qualified ([unfortunely] for me, most of my Buyers are young first timers using FHA & VA financing & it's harder to compete with that so we are writing ALOT of offers).
If you really believe that the market is going to decline another 14% or so (that's the difference between $350k & $300k) I would agree with Rod & suggest you wait awhile, because you will continue be frustrated.
It is possible ( & probable) that we will see a temporary dip in sales after the tax credit expires- But none of my buyers bought specifically because of the tax credit (though they will enjoy spending it! :-). They bought because they wanted a home now & they were qualified & they just lucked out on the timing.
Well, that's an entirely different discussion. If that's your belief, then you should not be looking for a house now or making offers.
You have received some good advice here even though some agents need to use a spell/grammar checking utility. First of all, you need to get this list price problem out of your head. Everyone is looking for a "deal" in this market but believe it or not, there is a lot of competition out there for buyers. If you are using a buyer's agent and you trust them then listen to their judgment. They will not let you pay more than you should for a house. If you are not using a buyer's agent I highly suggest you interview and find one that is short sale experienced.
Good luck and I hope that you find the right place!
Sounds like you have a short sale knowledgeable agent working for you. As other have said, many agents just try to get an offer by listing the home at a low price or they simply do not know how to do accurate comps. Either way, the banks will do their own appraisal of the home's value and counter the offer at a higher price.
Since short sales are often on tight time lines or buyers can not qualify for the higher price, the deal falls apart at the end. This, obviously, is bad for all parties concerned especially since it often takes 3-6 months to get to this point in the transaction.
However, your agent does work for you and if you would like to make a low offer and put yourself and the seller at risk, it is your choice and decision.
You can make your offer at any price you would like- But short sales are a pain in the a*s, and the listing agent will usually offer it at a lower price than the comps just to attract buyers.
The banks that have to approve the short pay off do not care what a property is listed for & they will send their own agents out to find them the value of the property using the comps.
If the offer that is submitted to them is significantly lower than the value supported by the comps, it will not be accepted- & they can take 4 or more months to tell the agents 'no'.
You also can not assume that you will ever get a counter, especially if the property is at all desirable. Sellers, even on short sales, are getting multiple offers right now & most will only counter the very best offers if they counter at all.
So if the comps support a value of $350k & you only offer $300k, most likely your offer will be at the bottom of the pile :( & may not even get a courtesy call to let you know that your offer wasn't accepted.
With the prices being what they are now- even if you pay what the comps support- you will get an awesome buy :)
Good luck with your search!
Since the Phoenix market has some of the highest inventory levels ever experienced, keep in mind that the comps tell you what the market will bear. Ask your REALTOR what the trend has been over the last four or five months. Have prices been climbing? Has inventory gone down? Knowing the trend could help you see where the market is going not just a snapshot.
Best of luck with your search.
It is very hard to advice you without knowing all the details, but you can definitely place an offer at list price if you wish. The problem with many short sales, and even many foreclosures, is that they are listed way below market value to attract multiple offers and bidding wars. Your agent probably knows that.
The problem with offering asking price (on properties that are listed below market value) is that the seller might not counter offer at atll. In short sales typically the seller goes (or negotiate only) with the higher and best offer. So, they might or might not counter offer to you. But again, everything is on a case by case basis. If your agent is experienced in the area he will know the market, what is going on and will try to get some more information about that specific property and based on that will be able to advice you.
Carlos J. Ramirez, PC, ABR, CNE
Associate Broker/Realtor, HomeSmart -