Your real estate agent may not want to play the game though, He will lose 99 times out of 100 for the five hours of time he puts into each offer. When both of you finally win, your prize is $50,000 but his prize is only $$6250 ( The commission on the sale ) dividing that by 500 hours (assuming only 1 in 100 low offers succeed ) so the agent is earning only $13 per hour for his time. And that is not even considering the time he takes to process the sale after you have won the bid. Adding in that time, he is down to only about $10 per hour.
So OC, although the agents don't expect every offer they write to succeed, they need to have better odds than you are offering at a hundred to one.
Always telling the truth about the market meant that I did not make as many sales as some of the agents who were more optimistic. From 2004 to 2006 I only represented sellers (and a few sellers who also bought only to replace what they sold) No client of mine is in worse financial shape due to transactions that I processed.
The flip side to that is that the buyers (represented by someone else, not me) did not fare so well - but those are people that I did NOT represent.
As for the loans, I have always explained the truth about pay option arms, stated income loans, and advised against them for 99% of the people. These loans were awful for most of the people who took them, and I told the truth about them. Yet for 1 out of hundred borrowers a pay option arm or stated income loan makes sense.
This is a little like what I was trying to explain to you yesterday; that something that works for 1% of the population usually does not work for the other 99%.
I do not object to your lowball purchase strategy, in fact I recognized that it would reward you quite well if and when it was ultimately successful. I simply wanted to point out that it was not a commonly successful strategy, It would not work for most people. They don't have the patience to sign dozens of losing offers and spend hundreds of hours looking at houses.. You (and your agent ) will have to have great perseverance, be willing to lose out on some houses that you really would have liked.
Because I am honest. I was straightforward with you, about how reasonable and realistic it is to offer $50,000 to $74,000 ( 17% to 25% ) below value, the time you need to invest to achieve your difficult goal.
From your angry reaction to my post, I wonder if you would prefer to hear from people who sugarcoat and sweet talk you and tell you that your plan is a slam dunk?
I sleep well at night, I tell people the truth; sometimes it makes them angry. Sometimes it makes them not want to use me as an agent.
http://www.wboone.golyon.com the links are at the top of of the web page. Once you find an area you are looking in then you can single out all REO listings and see who is the best price per sqft and this will help you determine a good offer.
I gave up half my income in 2005 -2007 because I could not in good conscience sell those bad investments to my own clients.
As far as those houses that are listed between $300 to 314K... I will share an observation I have made on Trulia many times. Other readers are tired of me saying it. : List prices are only mildly correlated to actual market value. A list price can be way over market value, it can be under market value or it can be spot on.
The reason this is a "buyers market" Is that buyers determine the final contract sale price. Sellers don't and Realtors don't.
Note I said buyers ( plural ) - If a house is under priced or correctly priced, it will get bids. The under priced house might even get bid back up to full market value. Most over priced houses will either sit, or, someone will lowball it and succeed. If the $314K house really is overpriced, you could make a bid.
The lowball strategy works better, (counter- intuitively from the buyers point of view ) on overpriced houses, than on correctly priced or low priced houses.
Why? because you are not competing with several other buyers as you would be on the house that is already priced at, or below market.
I will share with you.. I have already seen a half dozen instances this year, where a bank has come down by 20% or more on a house. But only when the list price was more than the market value.
I also have to apologize to you. After having done more research, I now think the odds of getting the lowball offer accepted are much better than 1 in a 100. I think it is more like 1 chance in 40 now. /the market has changed so much. You have been rewarded for waiting this long.
I guess my pricing of 2100 sqft 4000-5000sqft lot house for $250,000 for the area is still off. I will just wait and see if the prices still fall. For now I have my 20% ,I do not want to pay for PMI. I will just save for our closing cost. It just doesnt make sense to pay $300,000 2100sqft for a used house when KB Khovs Lanar new houses with appliances and granite and brand new for the same price xcept with HOA. The banks need a better pricing system or all these houses will sit on the market...
I understand where you coming from, something like a "bundled service" but they don't look at it that way.
I just see it as the bank wants more $ and realtors want us buyers to lend more $ to get a higher commisions. How about doing the right thing helping people and getting paid... What percentage of realtors do you think screwed home buyers from subprime loans and telling other people to loan more than they can afford. Foreclosures are first the buyers fault + realtors pushing them to loan and then lenders letting people borrow money they cant afford... Jim how many people have you screwed??? how do you sleep?