To this title you might ask, “which salmon is available?” Well, I’m not really talking about fish with scales and fins here. What we’ve noticed over the past month is that the fishing with low offers is getting pretty common in a lot of price ranges. These occurred in neighborhoods ranging all over the area too including Greenwood, Phinney Ridge (x2), Bellevue (Bridle Trails), and Mercer Island.
Some of these properties I can understand the desire of investors to lowball and get a bargain. One of these homes I had listed was already priced to be a good value for the neighborhood so my clients completely ignored some extremely low all cash offers from an investor because they weren’t THAT motivated to sell – meaning, we’d only been on market for about 30 days. Now, 2 years ago being on market that period of time would have made some people nervous but, realistically, most homes take longer than just a few hours to sell or even just a couple of weeks. So, we ignored the first 2 ridiculous offers and another one came along (still low). We put forward a counter with a very small price change and the buyers took it. WAKE UP CALL! We’re not in a buyer’s market in the Puget Sound region. We’re in a balanced market.
What I’ve noticed in talking with all of the agents submitting offers for these various listings I have is that they’ve all bought into their client’s mindset of thinking that “it’s a buyer’s market” and they should be able to really drop prices via their offers. But the agents aren’t helping their clients by doing the work associated with helping “sell” those offers.
Yes, there are some sellers out there that are still hanging on and desperately wishing for the days of the high flying markets we had for 5+ years, but reality is kicking in for most and the scales are becoming more balanced. This isn’t the rust belt where the economy has sunk and houses have sunk lower. If you’re a listing agent you had better be able to justify your pricing. And, if you’re a buyer’s agent you should do the same for your offer. One lowball offer we received my partner went back and asked the guy to submit his comps that supported the offer. The agent’s reply was, “well, I don’t have any, it’s just what they wanted to offer.” Our client almost completely ignored their offer except for some details we pointed out that led us to believe they’d accept a counteroffer with a minor price change – and it worked.
Another listing had an agent providing comps but they just solidified my client’s view that our pricing was right on. We did go ahead and submit a counter with a faster closing date and some small concessions that we expect will be accepted.
I will admit though that with a couple of my buyer clients, who are not in a hurry to buy, we’re doing some of this offer roulette. We submitted an offer on a MI house for about $100k less than asking price but we also put forward our pricing analysis and comps that supported the price point. The house had had several large price drops based on other agent feedback as well and it was definitely a cosmetic fixer. It might have worked out for my clients except that the house got another offer the same day – it was still a very low offer but not as low as ours so the seller started negotiating with them. But, that’s okay because my clients are willing to wait for the right deal for them. This house was going to need roughly $200-400k in updates over time so from a cost perspective the price we offered was what they were willing to spend knowing the costs they’d incur later.
Having watched the low offers come in for one of our listings my client provided the impetus for this post by saying in an email, “well, it looks like fishing season is officially open!” I’m glad that she’s got a good head on her shoulders and a good sense of humor too. These are the clients you really enjoy working with especially when you can have sensible discourse with regard to your work together, market conditions, strategy, and more.