Monday, January 3, 2011
Starting the year with a bang
I've been working with this client for a couple of months and we've missed a few opportunities. She's a first time home buyer and the process is a lot to absorb. This house has been on the market for 39 days and when I spoke to the "agent" yesterday, he said he hadn't received any offers.
My client wanted to start low. It was around 30K off list. That was about 10% off the list price. In DC, you can generally expect to get 3-5% off the list price. 10% off list is considered a low ball offer. I knew this wasn't an ideal way to open negotiations but you do what your client asks. Plus, a developer is selling it. Developers are normally only concerned about the net price and making a sale. They respond to all offers even low balls. Although I counseled this tactic was risky, I didn't think it'd be a big deal. Instead, I got an email from the "agent" that he's not going to counter. In fact, he told me when my client was serious, we could submit a real offer. He also told me he had two other offers.
This was not the reaction I was expecting. I assumed they'd counter closer to list price. On my listings last year, all offers were consistently 5-10% off the list price or more. That's never what a seller wants to see but that's how buyers roll these days. You work it out so both sides are happy.
Also, my client has a good job, is pre-qualified with a respectable bank and most importantly: SHE'LL MAKE IT TO CLOSING. Key factors to a successful deal these days.
Turns out, the listing is really a FSBO. (For Sale By Owner.) The "agent" was really the owner. This fact is not disclosed in the listing.
The situation above is why agents hate FSBO's. His definition of a "serious" offer is a full price offer. Really? Why are you trying to flip a house in this market if that's your expectation? After 39 days on the market and sold comps that are consistently 10-25K off list? If it was the right price, it'd be gone already. This is not 2006, Mr. Developer.
I was really, really hoping '11 would evolve into a different sort of real estate year than '10. Apparently, it's going to be more of the same.
*photo courtesy of Matrix