Home Buying in North Port>Question Details

Lee, Home Buyer in Toronto, OH

I would like to here responses from you.

Asked by Lee, Toronto, OH Sun Mar 15, 2009

I saw a house that I liked and told my agent that I wanted to make an offer. She spoke to the listing agent and was told that there are four offers on the property and to make an offer anywhere from10-30% higher if I really wanted to get the house. My feeling is that if there are a lot of foreclosures, then making an above asking price offfer is ridiculous! How can I know if the listing agent is lying or not about there being offers on the property just to get a higher selling offer/price? Comments are appreciated!

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Lee,

When we get foreclosures in to price the bank wants us to price them to sell in 30 days or less. Some banks will come back and ask for highest and best and some won't. Also some banks require us to leave the homes on the MLS of a set period of time, usually 72 hours. They want to make sure they get the most money they can for the house since they are selling at a loss. They ask us for our opinion and get at least one other local Realtor to go out and give their opinion of the property as well. We take pictures and send them a full CMA or analysis of the property, including pictures.

The main concerns for the banks are how are you paying for the home-cash is always preferred. I've seen cash offers that were less than an offer that was financing and they took the cash offer simply because it was cash. How quick is the closing-They usually don't like to go over into another month. For instance, if it's March 5th and you put a closing date of April 5th. They won't like that. They always like to close their books out, if possible, by the end of the month. And lastly banks look at what their net will be to them after closing costs, Realtor commissions, etc. The one with the best net price to them and the most desirable terms will win.

Hopefully, this will give you some insight as to how the banks are looking at your offer and maybe you will be the high bidders on your next one.

Good luck!

Shannon Moore, Realtor
Re/Max Anchor Realty
North Port, FL
941-276-8142
twomoores19@comcast.net
1 vote Thank Flag Link Mon Mar 16, 2009
Hi Lee,

We agree with you.....if it doesn't feel right....move on. There are plenty of opportunities in the North Port, Port Charlotte, Punta Gorda area that warrant testing the waters.

Our recommendation is to preview a number of properties and arrive at a pool of desirable homes(3-4 is good) before beginning your offer process. This often creates leverage for the buyer when you make the other party aware of the fact that you have other interests and plan on exercising them.

Good luck,

the Eckler Team
941-408-5363
billeckler@michaelsaunders.com
1 vote Thank Flag Link Mon Mar 16, 2009
Lee -

The most active segment of our market has been foreclosures for a long time now, particularly those under $200,000. That's compounded by the fact that we've got a huge seasonal presence right now and many of our guests feel that this is the winter to buy. With more buyers in the arena, the pool of available inventory shrinks and negotiating power on the buyer's side is diminished.

The first thing to remember is that banks price their properties low on the FRONT end to attract buyers - and it works really well for them. Unless there are some serious problems with the property, banks will generally be inflexible on price because they know that there will be a buyer sooner rather than later. This is especially true of the attractive ones.

Also, with a larger segment of our population buying right now, it is not at all uncommon to see 4,5, or even 10 offers on a property the first week it comes on the market. If you find a property you like, act quickly and decisively - to lose a really attractive property in this market for only a few thousand dollars is folly.

Alex Krumm
Re/Max Alliance Group
941-234-3597 direct
941-954-5454 office
alex.krumm@verizon.net
1 vote Thank Flag Link Mon Mar 16, 2009
I do trust my agent, I dont know the other agent so I cant say that I trust him!
0 votes Thank Flag Link Mon Mar 16, 2009
If you trust your agent chances are she is telling you the truth. She only gets paid if you get the property. The extra money she would make by having you needlessly inflate your bid is a high risk low reward behavior. I personally have had to have my buyers go in above list due to the market picking up and almost every decent property priced right has multiple offers. Good luck to you!
0 votes Thank Flag Link Mon Mar 16, 2009
It seems that the answers provided are pretty much on the same track. Many times, REO's are priced at "unbelievable" low prices in order to spark interest and multiple offers. I've often seen REO listing increase the asking price when several offers are presented.

It is wise to have your agent prepare a comprehensive CMA and do some research or your own- many short-sales, foreclosures and REO's do in fact sell for [at times] far in excess of the original asking price.

Making an offer that exceeds the asking price mas "seem" ridiculous, but in fact may still be a great deal.

There may not be a way to know if other offers are being considered- make your best offer and see.
0 votes Thank Flag Link Mon Mar 16, 2009
I'd hope the listing agent is lying about the number of offers. On the other hand, I would assume that she's trying to create a sense of urgency, and to get as good a price as possible for the property.

Asking price, especially on REOs, isn't always a good indication of what the property's worth. I've seen REOs vastly overpriced, and I've seen others that have deliberately been priced low in order to trigger a bidding frenzy.

What you have to do is ask your agent what the house really is worth. Get a CMA. Then make your offer based on the house's real value. You absolutely don't want to overpay, especially in today's market. On the other hand, if you like the house, you increase your odds of getting it with a higher (versus a lower) offer. But don't be panicked or pressured into making an offer you're not comfortable with...or that you won't be able to live with.

Hope that helps.
0 votes Thank Flag Link Mon Mar 16, 2009
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Lee

Roxxanne is correct. Banks will often take a cash deal above financing because it can offer the quickest close but you don't want to close for 2 months it takes the allure of the cash offer away.

Christoher Lyon
Mortgage Broker
0 votes Thank Flag Link Mon Mar 16, 2009
I will also like to know, is the realtor under any obligation to provide you with the other offers if I end up getting the house as his comments made us go in higher than we wanted to....
Also, if my offer is not adequate, will the bank sign it back to me and request that a higher offer be made when there are already four offers and I came in last?
0 votes Thank Flag Link Mon Mar 16, 2009
Thanks, I appreciate all of your responses. My offer is a 90% of listing price and its a cash offer with no contigencies. Lets presume there are really other offers, if another offer is for 100% listing offer but based on financing, then which offer will be more attractiver to the bank?
0 votes Thank Flag Link Mon Mar 16, 2009
Lee

I've seen it work both ways recently. Somtimes you can get a foreclosed home at the list price other times the list price is so low there are multiple offers right away. If the home has been on the market for a while an above list offer would not make much sense.

Hope that helps
0 votes Thank Flag Link Mon Mar 16, 2009
Hello Lee,

I have to agree with Alex and Shannon on this subject. Many of the foreclosures in North Port are actually selling for more than the listed price due to the recent demand. Again, the banks are listing these homes for the bare minimum. If you truly love the home and can afford the difference in price (especially if it is still below market value) I would say it is OK to make the higher offer. Make sure that your realtor is giving you a comparative market analysis of the neighborhood that you are interested in so that you can make an educated decision.
All my best,

Debbie Dunnick
Realtor
Michael Saunders & Co.
http://www.debbiedunnick.com
debbiedunnick@hotmail.com
941-400-3524
0 votes Thank Flag Link Mon Mar 16, 2009
It's a difficult call, if you think they are lying, move on to another property, or just put in your offer as you want. Perhaps the other 4 will have difficulty being financed or fall through for other reasons, it happens.
0 votes Thank Flag Link Mon Mar 16, 2009
Hi Lee,

Good question! I live in North Port and sell and list a lot of foreclosures. I can tell you that latley most of the homes that are in good condition and are priced reasonable are going for more than asking price. We have gotten several this past month and all of them have gone above list. I don't think there is a general rule as to how much you should offer but what your Realtor could do is to run some compariable properties and see what they have been selling for. This might give you a good indication of what price to expect on the home you are offering on.

Good luck with your search!

Shannon Moore, Realtor
Re/Max Anchor Realty
North Port, FL
941-276-8142
twomoores19@comcast.net
0 votes Thank Flag Link Mon Mar 16, 2009
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