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.
Happy fishing! 
If you insist on comps in every situation, prices would never decline, barring massive foreclosure and REO activity.
If there 10 comparable houses in a neighborhood all priced 15% higher than any buyer is willing to pay, and they have all sat on the market for 3 months with the listing agents all demanding comps for the under-list offers, that’s called a stalemate. That attitude is probably part of the reason we are seeing such a huge decline in sales.
You don’t have to insist on them in every situation, but if you’ve got major price disparity then it’s not unrealistic for a listing agent to ask for justification. All situations are unique so you have to address them individually. If you have a client that is being unreasonable and who didn’t price right to start, that is a different conversation for a listing agent than if you priced well and then started getting lowball offers.
One of the biggest reasons we’ve seen a decline in volume is that the financing markets made it a lot harder for people to get loans, particularly if they had little or no down payment. Almost all offers I’ve seen lately have had between 15% and higher down payments which was not the case a few years ago, and even last year at this time. August 2007 was the beginning of the financing meltdown. From what I’ve seen, the hardest hit price range in this area for getting loans, and thus sales, is the $600k to about $950k. Just so happens to hit those houses that will likely require JUMBO loans to purchase.
You say “fishing”, us buyers say fair market price.
I’m not sure you’re doing your sellers much of a favor by advising them to stick to unreasonably high prices on the increasingly unlikely chance they may get a hit soon. How many of them will be forced to settle for much bigger price cuts later in a declining market?
But hey, your compensation is primarily based on sales volume, so I guess you must know what you’re doing…
Interesting, you are both changing the scenario in her story from a fair price to over priced or unreasonably high priced.
A few buyers will low ball now matter how the property is priced. It could be over priced, under priced, or priced fair. If it is priced fair for the current economic climate, then low ball offers should be ignored as they are below the seller’s reservation price. The property will sell for close the list price within the average TOM.
In a declining market, a few sellers will over price as they do not understand the current climate. The sticky price theory will play out. Ultimately through excessive TOM, the house is shelf worn and will probably sell for less than 10% of its current FMV at the time of close.
Bennyd, you don’t say what marketplace you live in but I also didn’t say that sellers with “unreasonably high prices” should keep them that way either. And, it seems to me that you have a bias to all agents already given your comments about compensation and volume. Do you really think an agent would like to overprice a house so it can sit forever? Or, that we’ll want to underprice houses just to get them to sell fast enough to make money? Neither of those strategies work for building a long term business and I don’t work that way. Throw insults at someone who deserves them.
I like the analogy of fishing. As I see it though the buyer always have the upper hand in this game. The seller is limited to one little fishing spot(his home) where he can change the bait until someone bites. The buyer however is not limited to the size of the bait, he can also s his bait to many,many different fishing spots until he gets a bite.
Happy fishing!
Hi Reba,
You’re right, the compensation dig was snide. I apologize.
We’re looking for a SF or nice Townhouse in the Central District or possibly north Beacon Hill in the ~450k range. We’ve got visibility to the number of homes on market, in particular the increasingly long ToM for many properties slightly above our price point.
Many of these properties have had recent price drops that would have been fairly attractive to us a few months ago, but at this point, the lower prices don’t look low enough.
We’re fairly motivated buyers, but we also can tell which way the wind is blowing, so we’re open to waiting. We’re considering putting out a “lowball” offer, but it’s a tough time to tell what range of lowball most of these sellers would even consider. Would you consider an offer 6% lower than current list after already dropping 6% in 45 days on market? What about after 90?
Michael,
The way I see it, “Fair Price” is defined by whether or not the property sells in a time frame that’s reasonable to the seller.
Reba,
I’ve always operated under the paradigm that all offers are good offers.
I look at it this way. A buyer and a buyers agent took their time to evaluate a property and tender an offer to the seller. Whenever any offer comes in, I’m appreciative of the effort and interest.
Now, it’s true, they may be so far apart, they don’t have much of a chance to come together. That’s a part of doing business.
How many times have we received a very low offer, just to have another interested party come along at the same time? Just having an offer on the table often stimulates another buyer who brings in something much stronger.
How often have we personally been through experiences where a buyer needs to experience a little “reality” before learning what a good offer is?
How often have we seen sellers become emotional and turn down a “low” offer, only to have to settle for much less down the road because they didn’t have the wisdom to look at their house and market objectively?
I work hard to mitigate too much emotion on the Seller’s part. I also work to have the Seller counter, even if it’s a full price, or close to full counter if it’s too far apart. I’ve seen amazing deals put together where it didn’t look like in the beginning there was a chance.
The agent on the other side should be thanked professionally, as should the buyer — for any offer.
FWIW, I resist labeling offers “low-ball”, or “ridiculous”. Again, to me, all offers are good offers. I’d rather see a few offers that we have to turn down than no offers at all. The silence gets deafening.
Bennyd,
I wouldn’t worry about getting to technical in your analysis of what to offer when low balling offer. Having a comp or two (or three, etc.) is helpful as a way of providing background for your low ball offer, but there’s something to be said for nice round numbers and splitting the difference because it’s easy for the seller to understand. If they’re asking $500,000 offering $450,000 is a simple and very understandable low ball. The seller’s unlikely to distinguish your low ball on the basis that it’s a 10% reduction so much as it may just be a low offer in general.
Additionally, the initial low ball offer is a great way to set the bar for future negotiations with the seller. I highly recommend expressing appreciation to the seller for even considering your offer (on the fax cover page for example). You don’t have to deny that your offer is a low ball, in fact in some instances it pays to admit to that. For example, including a note that “my offer may be lower than you expected and I hope you won’t take it the wrong way. It’s simply the most I can afford for the home and I wanted to at least give it a try.” Note that your offer may not reflect the most you can personally afford for a home, rather only the most you can afford to spend on that particular home given the work you will need to do when you move in. That could mean a total kitchen remodel or simply changing the name on the mailbox. The point is the seller doesn’t know what your motivation is so leave it to their imagination when it serves your purpose. But, never forget the implied duty of good faith and fair dealing in every contract – you can’t and should never lie or misrepresent the truth. That said, it doesn’t mean you have to spill the beans.
The goal in low balling is to induce a counteroffer so aim low, just not so low that they tell you to take a hike. The seller or agent liking you (or at least not disliking you) is everything so don’t be an @$$.
Greg,
Very well put.
I tell my clients that I don’t care if they make an offer on a cocktail napkin, just put it in writing and we’ll let you know!
We can always counter!
Marc,
” I highly recommend expressing appreciation to the seller for even considering your offer (on the fax cover page for example). ”
Seems appreciation might help things along on both sides of the fence!
I am a professional number cruncher. To me fair is the equilibrium price on the supply and demand curve. The fair price would occur within the average DOM because it is priced appropriately. Regardless of the seller’s point of view of fairness, the property has to be priced right (priced fair) to sell on time for the average DOM. in a declining market, the sticky price theory says that owners (and some agents) fail to believe their baby is ugly and not worth the $100B it was two months ago. Part of the failure is the owner and agent failing to properly read the market. Price declines do not keep up with declining buyer demand.
I think many people fail to recognize the complexity of this declining market in the Puget Sound as we have higher price points than some meltdown MSAs and many home prices push the buyer into jumbo loan. In markets with good economies such as the Puget Sound, some of the decline in demand is form the credit meltdown. The credit meltdown has precluded credit worthy buyers from obtaining financing to buy in the middle tier. The high tier isn’t an issue as those buyers pay cash or have specific financing from the “private client groups
Good point about the relationship between sales volume and prices, biliruben.
One of the few statistical hypotheses that makes sense to me is that the house sales volume trend in a given market is a leading indicator of the price trend about a year down the road. If true, this means that prices in the Sno and King markets will (still) be trending down a year from now.
That explains why my offers are on the low side. It’s fear, plain and simple.
I think people make too much of low ball offers vs. unrealistic sellers. In the desirable areas of Seattle right now, market participants appear to be very confused about what’s going on.
People are letting properties sit on the market for a long time, and they’re even sometimes even selling. I can even find a good example: http://www.estately.com/listings/info/748236#listings/info/748236
-200+ days on the market
-Multiple (relatively modest) price drops
-Looks like property is still going to sell for a lot of money (currently STI)
Our original poster might even have some thoughts on this one. Sometimes patience will pay off. Other times a lowball offer might catch a seller’s attention.
Greg, I must commend you for having good business sense. Emotions as pride and stubborness do not yield good results.
Can any of you tell me what a “Comp” is? I was always under the impression that a “Comp” was the “SOLD” price of a similar home (similar neighborhood, similar size/features, etc.) in the last 90 days or so. Seems to me many RE Agents are under the impression that “Comps” are the “Listing Price” of similar homes. I hope to find out the latter is the case, and then I’ll be putting my home on the market and encouraging all my neighbors to do the same, I’m thinking we all should price our homes in the $2 to $2.5mil range. Joking…
How does the appraisal process work if there has been no recent sales in an area for say a year or more? What do they base the value of a home on? Or would it be the most recent solds, even if that was more quite a while ago?
I was very surprised to read that offers are not “Confidential” (per Ardell on a previous thread) because I have been told by MANY, MANY agents that it is illegal to divulge competing offers. During a recent transaction (multiple offers) we were told that the LA could tell the BA that the other offer was “REALLY, Good” or “REALLY, REALLY Good”… and then you make your assumptions and write your offer and take your chances. Oddly enough the competing offer was said to be “Excellent” and when the whole transaction was complete we find out that the other offer was $45k less than the asking price on a $495K property. I felt like the LA was less than honest about the “Excellence” of the competing offer…… But maybe “Excellent” is subjective term?
I would really like to clarify what constitutes a “Comp” as I’m anxious to see if I’ve been misled and wrong all along about this simple fact as well.
This blog is such an enlightening read, I appreciate reading all the differing points of view.
Thanks in advance for your thoughts…..
I haven’t read all the comments, but IMHO, if you’re going to make a lowball offer you should know more than the asking price of the property and the DOM. You should know something about the seller!
At a minimum you should know what they owe, whether they own other property recently purchased, whether there are any court actions or foreclosure actions of record. These things are all public record (well except in King County where original deed of trust amounts are tougher to get if not an agent) and easy to find. To expect just any seller to drop their price is just likely to result in disappointment.
tj, I like the fishing analogy myself, and have even used it, but in the context of the buyer being the fish.
http://blog.seattlepi.nwsource.com/realestate/archives/135895.asp
But I think the buyer always has the upper hand, even in a good market. Unless the property is highly sought after, the seller needs to do things to attract the fish.
Hi Chris,
I’ll respond to your “Comp” question.
Comp is simply short for “comparable”. When establishing value for a specific house, sometimes there are several good comparables, yet many areas are eclectic and don’t have many exact comparables.
For me, I look at every category of comparables. ACTIVES tell me what the current competition is. PENDINGS show me what has just sold. EXPIRES tell me what was listed too high and didn’t sell. And finally SOLDS show me the homes that have closed. SOLDS are interesting to analyse because we can see the ratio between Original List Price (OLP), List Price (LP) and the price it sold for (SP). Market time CDOM and Price per square foot are all analyzed as well in each catagory.
An excellent Comp to establish value for a house should be the 1. Same house style. 2. Within very close s/f tolerances (2200 s/f house should have 2050s/f – 2350 s/f comparables). 3. Similar floor plans, bath and room counts. 4. Similar amenities. 5. Similar lot size. 6. Similar placements (busy street vs. quiet neighborhood street). 7. Similar views. Good comps should close in proximity and be as similar to the subject house as possible.
After finding as many good comps as possible, the agent should personally visit as many of them as possible to ascertain the exact condition, verify amenities, views, etc. I find that bringing a seller along with me works great and I coach them to pretend they are a Buyer.
Beyond finding and presenting good comps the agent needs to know what the market is doing. This is really what separates agents, IMO.
I have been deeply involved in the study of market Absorption Rates and Sales Ratios for several years. Simply, AR’s are the relationship between ACTIVES and PENDINGS and tell us rate of sale and generally referred to months or weeks of inventory. (How long it takes existing inventory to sell at the current rate of sale.) Here’s a quick article that I wrote awhile back on AR’s and SR’s http://workingforyou.typepad.com/feature_article_pricing_t/
As our markets are in transitions, lately I’ve been doing some interesting studies on how various neighborhoods and areas preformed last year vs. this year. In almost all of these studies, Sellers are attempting to get a 5-6% appreciation raise…..and not getting it. This study is for NWMLS area 530 (East Bellevue)http://www.workingforyou.typepad.com//realestate/2008/04/its-finally-cle.html
and
http://www.workingforyou.typepad.com//realestate/2008/04/nwmls-area-530.html
Sorry one of the links didn’t work. Try again.
http://www.workingforyou.typepad.com//realestate/2008/04/its-finally-cle.html
Buyers who are fishing for a certain lower price stand to lose by how quickly mortgage rates are increasing. Last week, mortgage rates increased by approx. 0.25% to rate (meaning the same rate one week before cost an additional) 1% of the loan amount. Rates are continuing to rise due to inflation…you’ll see when I post rates at RCG tomorrow. 0.25% may not seem like a huge increase to rate, however when it becomes 0.50% higher over 2-3 weeks or more, you’re possibly paying a price by playing the pricing game…not only by paying a higher rate over the term of the mortgage–it could also mean that the mortgage you were preapproved for in the high 5’s, you no longer qualify for in the mid 6s since buyers are qualified based on PITI.
I couldn’t agree with you more, Rhonda, and that’s part of what we’ve been telling our buyer clients.
16. Chris, appraisers work off of SOLD but agents work with current market forces and not just past info so we’ll look at properties that are between active and pending as well because that shows us the most recent activity. The active stuff has to be reviewed carefully for days on market (DOM) and other factors, but you have to see what your competition is doing. So, you can look at COMP in some circumstances as meaning “comparable” and “competition”.
Bennyd, the area you’re looking in continues to have good activity and is one of the more desireable areas because of proximity to downtown and other commuting points. We’ve found that builders are more open to being flexible on terms right now because many of them are either overbuilt or overbought on projects. They ran into the same issue of “easy money” and now many are dealing with a buying and building hangover of their own. People selling their own single piece of property have different issues to consider and knowing if they’re over their heads on a house mortgage is one that must be looked at. We do this with all of our clients as we put together offers to try and sort out if what we’re offering might be accepted. We also make sure to contact the listing agent to garner as much information as we can (or that they’ll provide) so that when we put an offer together we make it as attractive as we can for acceptance. Not offering the full price? Perhaps offer a quick close. Can’t do a fast close? Perhaps shorten contingency periods to get the contract tightened up ASAP to give the seller confidence of a strong deal. There are many things that can be considered.
I also am in agreement with several other people commenting here with regard to limiting emotion (but I can certainly speak an opinion in a blog), taking a full view of what a seller owes, etc. All of these things can and should be factored in. But, as we all know, a blog post can start out with only so much info or it becomes a novelette and no one will read it.
And, Greg, I am like you in that we do thank agents and their clients for any offer received. You and I both know how much time and attention can go into these, along with viewings, etc, so we do appreciate everyone’s time. Although, I’d hazard a guess that while you say “I resist labeling offers as ridiculous or lowball” that the though might pass through your mind on occasion. Not on all offers, but sometimes you get an agent that you think to yourself, “how HAS this guy stayed in the business this long?”
Having said that though, I did just speak to an owner of a potential new listing yesterday whose home has been on market longer than he anticipated and he told me, “I can’t believe I haven’t even received one offer – not even a low one.”
Thanks to everyone for chiming in though – this conversation has been great!
Chris asked this: ” During a recent transaction (multiple offers) we were told that the LA could tell the BA that the other offer was “REALLY, Good
Greg and Reba- Thanks for the info. This still leaves me wondering…
If appraisers work off solds, why would an agent price something without considering what an appraiser would determine to be the value of a home? Very few people I know have the ability to purchse Seattle Real Estate for cash. That means the banks have to agree with the buyers idea of what something is worth. Seems like a lot of work to list a property without consideration of this, have BA’s write offers, LA has the seller look, respond, counter, accept offers, have insepctions done…. etc, etc…
Go through the entire process only to have the appraiser come in and say – “Gee…. Just because all the “active Comparables (i.e. competition) are $750k (ish) but the last thing to sell in this neighborhood was a year ago for $600k so we won’t appraise that property you want to buy for $750…..”
Just curious. Seems like we’re seeing a lot of houses “Back on Market” I spoke to an Escrow agent today who told me that low appraisals are a big reason for this, and they are seeing a lot of them these days. Of course, this is just one opinion.
Chris,
I second the opinion.
I’m one of those extra cautious house shoppers who seem to generate so much fear and loathing among some listing agents.
Well, guess what, gang? We do our homework. We know a lot about price trends in the region and the neighborhood where we want to live.
When we finally work up the courage to make an offer, it represents the best we can do, given our perceptions of how much farther house prices will fall after we close the deal.
Chris,
What area are you watching?
Frankly, I’m not seeing a trend in “Back on Market” properties……and when a property goes back on market it could go back for a variety of reasons – not just appraisals.
Here’s what happens when a property is listed too high in this market (generally more than 2% of the eventual sales price).
IT DOES NOT GET AN OFFER OR SELL.
So paying too much…..I”m not seeing it. We have a bigger problem with Sellers trying to get more than the market will allow.
Which is why market times are 2 and 3 times what they were last year. The longer the market time, the less a Seller will make
I watch Seattle and Eastside. Median prices in these markets have not declined at all this year. SFH in Seattle ended 2007 at $455,000. Here’s where they are the last 3 months: March $450,000, April $440,000, May $475,000.
SFH on the Eastside: End 2007 $589,500, March $600,000, April $592,725, May $600,000.
So the first 5 months of 2008 were virtually flat in the core regions. And, oh by the way, Absorption Rates have been virtually flat in these areas as well during this period.
I have neither experienced nor observed any appraisal problems in core areas. I would suspect if there were appraisal problems, it would be a result of a Buyer trying to finance the closing costs into the purchase, which did happen excessively in previous years, or perhaps VA loan appraisals (which could require an entire post of its own).
Appraisers focus on SOLD comps and generally don’t have as good a sense of market direction as an agent who is showing and pricing properties for sale. Their main job is to verify that an “arms length” transaction between two parties is a reasonable value for the lender.
Even in outlying areas were the market may be declining, buyers have huge selections, arms length transactions are setting good values.
I’m currently watching a “hot sheet” in Everett for properties under $320,000, and perhaps one or two BOM properties have come in the last 5 or 6 weeks.
Tim, Rhonda, or other agents….. outside buyers attempting to finance closing costs what are you seeing in appraisals? Are you seeing arms length transactions fail appraisals?
(Statistics published by NWMLS in County Breakouts)
Denismurf,
I’ve been thinking about your last comment. Does the “loathing” emanate from the “fear”. Fear of what? Is the “loathing” universal as in Listing Agent = I Loathe that person?
If a seller can get more and more, based on the premise that the public believes prices will go even higher, I guess the reverse is fair as well. Current value is discounted by the fact that market expectations are less rosey in the short term, and possibly the long term. Seems fair enough for a buyer to think that way. Sellers certainly do when the market is moving in the opposite direction.
Greg,
Consider this. 100 houses for sale equals 30 sold at higher prices. Previously 100 houses for sale equaled 80 to 100 selling at higher prices. So even if you are looking at higher medians based on early and high season solds, if that same area is down 60% as to number of homes sold, and inventory is increasing to record heights…is it really fair to say prices are up for the fewer that are selling?
Isn’t the backlog of increasing inventory eventually going to sell for less, dragging the median down?
Ardell,
It depends on the reason for the decrease in demand and increase in supply.
If the change is strictly willing and able buyer’s aren’t interested, then the supply and demand behavior would be that prices decline and inventory increases until the price falls to where buyers are interested.
As mentioned earlier, part of the decline in demand isn’t buyer preferences for lower prices and movement along the demand curve. The mortgage meltdown changed the rules for previously well qualified willing buyers carving those buyers out of the pool of buyers and a shift of the demand curve. That isn’t just a change in the buyer preference for lower prices.
By Elizabeth Rhodes. “Higher hurdles to home loans slow real estate sales in Puget Sound region
Ardell,
When measured by absorption, (supply and demand) inventory rate of sale is not increasing in core areas (it is in outlying areas). In fact if anything overall AR’s have slightly improved since the first of the year. The improvement is so gradual, I would call it flat.
And,, at least on the Eastside one would think that general lack of sales in the high end would ratchet down the median. For instance, Redmond 530, recently had an 9 week drought of no sales over 1.5 million (with an average of close to 40 homes on the market. While 520 Bellevue and 510 Mercer Island’s sales volume have been down, perhaps just a few ultra high priced listings sell to support the median.
As for AR’s, I watch them weekly — by MLS area AND 14 price ranges within each area (ie. $400,000 – $499,999 etc.). Separate charts separate SFH and Condos. The charts have 7 weeks of Active/Pending data and all numbers are averaged at the end of the 7 weeks.) As one would suspect, generally speaking the lower price ranges support lower absorption rates than the higher price ranges.
Many of the lower price ranges across Seattle and the Eastside indicate Balanced markets, with many in Seattle, especially in 705 and 710 actually coming in as Seller’s markets. As the prices get higher, absorption rates fall back, and some of the higher price ranges currently sport well more than a year of inventory.
So what I’m seeing is a fairly active low end, and a fairly anemic high end. I’m also distinctly seeing Sellers in all price ranges starting too high in price (on average 5-6%.) As Sellers drop their price within about 2%, they’re making the sale. When the sale is made the buyer is negotiating another 2-3% with a result of the about the same median price as last year (when measured specific price range to specific price range)! Last year Sellers had to reduce very little and received right at what they were listed for with little negotiation from the Buyer.
So what’s really happening? It depends on the area and the price range. It also depends on the house style. Remember when split entry homes were being snapped up at prices that caused us to shake our heads? Well, now they’re the last house style to sell, and owners of these homes will face more price reductions than the owners of a classic 2 story or rambler.
Michael, I do see a line in the AR’s where the jumbo loan prices start. On the Eastside, up to about $1,000,000 there is a distictive change in the rate of sale, however even in these ranges, I’m not seeing them build — they’re somewhat flat. Above $1 mil — inventory is building.
Ardell, long answer to a short question. Median is a funny thing, especially in small samplings. I put more faith in AR’s as a measurement of market health and activity. I would have thought Eastside medians would show a sliding decline as the rate of sale is weighted on the low end. The only thing I can say for sure is that the combined AR’s for the Eastside are flat since the first of the year as are the median prices……and I have the luxury of looking in the rear view mirror.
In the end, the only market that matters is the market that YOU, the seller or buyer are working in at the time. North Seattle and East Lynnwood are prehaps 10 miles apart. They are very different markets.
Denismurf, I am curious, I know you’ve been looking quite awhile. How many offers have you actually made? Have you found something suitable yet to live in, or is this a rental/investment property?
#12, Michael, your last paragraph is a good question. There is a ton of pent-up demand from prospective buyers who are sitting on the sidelines waiting for a signal that the waters are safe …
Whenever the majority of people start seeing signals that things are stabilizing, will they come into the market slowly, or all together, all at once like lemmings?
Greg,
A long and thougtful response…but the end result seemd to be “it depends”. 🙂
The long and short of real estate is that if a market goes up 5% in a year, it does most or all of that in the four months from May through August and by being lower to flat the rest of the year. If a market goes down 5% in a year, it does that by being flat or 1% to 2% up in those months and flat to down the rest of the year.
If medians do not go up at least a tad from May to August, the downward pull of the remaining off season months will be more dramamtic by year end.
Ardell,
Yup, It depends.
Region, MLS Area, neighborhood, price range, house style.
Timeout, quoting this post directly: So… a “ridiculous offer”, countered with a “very small price change” == “good offer + WAKE UP CALL balanced market”.
Hmm.. that logic doesn’t fit well. Seems to me that a “minor change” to a “ridiculous” offer is only a slightly better “ridiculous” offer.
So, either your “minor change” was actually quite large, or the “ridiculous” offer was in fact quite reasonable… take your pick.
Ardell – The fear and loathing is what I see directed toward buyers by some listing agents, not the other way around. Maybe “disdain” is a better word. As to why some agents feel that way, I can speculate, but have no way of knowing.
Leanne – We’ve made 3 offers since deciding to move here in November. The first didn’t get beyond the price stage. The next 2 produced agreement on price, but failed because of other issues.
I do understand, folks, that this is a forum by and for realtors and that I’m a guest here. It’s a great source of information that I need to know right now and can’t get anywhere else.
Hi Denismurf, 2 or 3 offers since Nov isn’t bad. Somehow I had gotten the idea that you’d done 5 or 6, which might indicate that you really didn’t like the places well enough to actually live there anyway …
I’m one to believe if you do not love the place, do not buy it. Even a home with flaws can be loved, and if you’re not there, it’s not the one.
If it is the one, understand that it is rare. If you love just about everything you see, set your bar higher. But, when you find that elusive, rare property, don’t hesitate to buy it. By the time you find it, you should be well educated towards basic pricing, and if you find you have to pay something more to actually get it, ask yourself this — how many months did it take you to find this one, and how many months do you think it will take you to find the ‘next’ one. What is that timeframe worth to you, in terms of ‘over & done with’. Most people have a price for that. That is partially how you decide what price you offer.
denismurf,
This is not a “forum by and for Realtors”. It’s a group blog owned by a guy who is not a Realtor. We’re primarily writing for people like you, and not Realtors. As blogs are a day to day, moment to moment conversation, that changes from post to post. It’s just that Realtors seem to more willing to comment, so the conversation goes that way. at times.
Also when agents comment on our posts, it is a semi-advertisement for them to do that, in addition to adding value to the conversation.
But the benefit is supposed to be to the consumer and not the Realtor, generally speaking. At least in my opinon. So thanks for noting that it is so.
Denismurf,
Can you describe the fear and loathing comment further? I can’t imagine a listing agent fearing and loathing a potential buyer for their listing, which is why I thought you meant it the other way around.
Ardell, to make you happier, I am just going to be ‘Leanne’ on this forum from now on:-)! I do NOT do this for advertising, nor do I expect to meet any potential clients on this site. So far, not one person has ever contacted me, other than a simple forum discussion.
I actually prefer dealing with my personal referrals. I am not doing this to create new business, but to establish that the guidance of a good real estate agent is better for the consumer than going it alone. Some buyers and sellers will want to go it alone, or with the guidance of a good attorney. I believe there is room for every model, but that it isn’t as simple as it seems to transact a real estate purchase & a successful closing.
There is far too much negativity in the current media style today, and this postive forum does much to combat the innacurate messages of gloom. Far too many forums such as this have the wrong agents participating. By wrong, I mean lacking experience and knowlege. This one most certainly isn’t lacking either of those!
I have met some professionals here as well that I would not have met otherwise, and one day when our paths cross on a transaction file, as I’m sure they will, it will be nice to ‘know’ who I’m working with.
I think it’s all good. This can be an excellent resource for the public. And isn’t that good for the industry we all enjoy serving in?
Rather than stating my full name for the ‘publicity’, I’ll just be Leanne, real estate agent. How’s that? 🙂
LOL,
Come on Leanne…who told you how TO advertise yourself? I even called you on the phone to give you instructions of how to hyperlink yourself, and told you to use your full name in blue vs. black.
Just saying, Sniglet’s impression that we write FOR other agents is not correct. That doesn’t mean we don’t like you coming by and commenting. It clearly adds to the info when you do.
You are the ONLY person I called ever, who commented on RCG, to assist you in regard to advertising yourself here. Don’t you remember? 🙁
Being a bargain hunter takes a certain personality.
First, you either have to find a large number of properties acceptable, or at least be willing to overlook things that others won’t (deferred maintenance, wallpaper, dated kitchens, etc.). When my wife and I were looking for properties last year, we only found less than 5% of the houses we went into acceptable, and we were willing to overlook those things.
Second, when you do find the house you want to make an offer on, you have to be able to not fall in love with the house during the negotiating process. People here often say agents drive up the price of houses, but in my experience we often have a hard time holding buyer clients back!
Thanks for straightening out my understanding of what this blog is, Ardell.
Before I move along, I’d like to revisit the earlier report on the new law requiring homeowner associations to perform reserve studies and include them with the resale certs.
My question: If we are interested in making an offer on a condo, is there any practical advantage to us to waiting until after the June 12 effective date of this law?
Ardell, I do remember, and was quite confused on several posts lately with some comments you made, so all is well.
Kary, if your buyer misses out on a house he loves due to negotiations, are they ok with that? It’s awfully tough to really find the house you love, less than 5% are good enough to love. I tell my buyers out of every 100 homes, 3 are great, 3 are reasonably great and the rest are for other people … :-).
Demismurf,
I doubt it. Many responsible HOA’s are already doing them from time to time and no one is going to run out and have one done ON June 12th. So I doubt that date will be meaningful to you in any way.
Generally speaking you can use RCG like a “panel” where you ask the person on the panel that you want to address the question to on ANY post written BY that person. That works out fairly well, for me anyway. Most “authors” get an email when a question is raised on one of their posts (I don’t for some reason at the moment). So if you ask me a question on Reba’s post or Rhonda a question on my post, that won’t be as effective as asking it on a post written by the person you are addressing. That only applies if the question is off topic or not addressing a comment on the post itself made by other people.
Hope that is illuminating and not confusing. I especially like comments from the general public, though of course welcome all comments.
On further reflection, Greg in #8 describes exactly the attitude I wish I encountered in all listing agents. Let’s just leave it at that.