Received a call from someone who is looking for homes with built-in equity here in the Phoenix real estate market. Cool. I can do that.
They want to buy now rather than later given the state of the market – the high inventory, slower sales, etc. Sounds like a plan.
At the end of the day, they want to buy a house for 65 cents on the dollar.
Not to say that this is an impossible feat. But honestly, who isn’t looking for homes to buy for 65 cents on the dollar? If I had sole knowledge of these type of homes, am I more likely to notify a stranger or friends and family looking for investment properties?
I’ve mentioned this before but there are limits to the extent of leverage a buyer has, even in this market. If a home is priced well – at or slightly below the last sales – there’s a good chance it’s going to sell close to asking price. Offering 25 to 30 percent below asking price on such homes is a waste of time, effort and paper.
As evidenced by this weekend’s REO home viewings, houses are not being given away – not even by the bank, who would be the most likely candidates to want a home off their books.
Successful negotiations come from a position of strength. The basic position of strength is the stance that there are other homes available, which there are unless you really like this one house. But an extremely low offer weakens your position because the seller isn’t likely to believe you’re serious about the purchase. And sellers won’t waste their time with folks who aren’t serious about buying their house.
(Your buyers’ agent may disagree. If they’ve not sat at a table presenting an offer to a seller, however, they have no idea how lowball offers really are received.”
Yes, we can negotiate a price below list price and maybe even below current market value but within reasonable limits. The Phoenix real estate market isn’t a third-world bazaar where any price goes.
[tags]Phoenix real estate, real estate negotiations[/tags]