Fighting Silliness With Silliness in the Phoenix Real Estate Market

Silence has been the theme of the week in this corner of the Phoenix real estate market, thanks to appointments nearly every day of the week and the busiest rush of contract writing I’ve seen since the halcyon, lunacy-filled days of 2005.

And speaking of lunacy, yesterday one of my contracts was greeted with a counteroffer at full price. This might not be noteworthy except the seller was Fannie Mae, and the full-price counter is a departure from Fannie’s usual playbook.

Yes, dear readers, like a novice poker player some lenders following relatively predictable patterns in negotiations – countering a couple of thousand below list price, for instance, then surrendering like (politically incorrect reference to some country or another redacted) when faced with an aggressive counter offer in return.

Fannie didn’t follow the pattern. And so, neither did we. We’ll know by Monday how well the whole thing plays out.

About the best explanation available for the sudden aggressiveness on Fannie’s part is the price on the property recently was reduced. All sellers seem to view a price reduction as a drop to a non-negotiable price but lenders are particularly entertaining, assuming the stance of a petulant 4-year-old. Or Dr. House, for that matter.

The line of logic goes like this …

“This is the price we set so it must be correct.”

And when that price is reduced because of a lack of activity?

“Now, this is the new price we set so it must be correct.”

Sense a trend?

What can a buyer do when faced with such silliness? Be silly in return. Fight the silliness with silliness. Become even more aggressive. Hold your breath until you turn blue.

In other words, if the bank isn’t going to treat this like a legitimate negotiation, you shouldn’t either. Make it fun, mockingly so, and see what happens.

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

4 Comments

  • BawldGuy 7 years ago

    Laughin’ cuz I’ve done that to the extreme more than a few times. The last one, years ago, wound up with a price
    ending in cents. The escrow officer thought it was a typo.

  • Dean Ouellette 7 years ago

    Fannie and Freddie are at the top of my shiat list right now. Have been having all types of issues with them lately on their counter offers on short sales.

    But on the buying side I had one last October, Fannie Mae and my buyers were going with the Homepath loan.

    House was overpriced by about 8k at 179k. We offered 165k, they countered 172k and buyers really wanted the house and agreed to terms. Well you know how negotiations on these go, all through email.

    We are waiting for addendums and three days later they changed their mind and countered at 176k and would not come down. Complete bs. And with homepath no appraisal can be done to change the price. The appraisal that was done came in way low at like 162k, but of course Fannie would not budge because homepath did not require appraisal.

    It was complete bs the whole way through. The fact that they counter and when we accept countered again higher really pissed us off.

    I am now calling the the FM or pronounced (F’em) siblings

  • Joshua Hill 7 years ago

    Keep us posted on the outcome, Jonathan. I’ve had some challenges with the F’em siblings lately, too. BTW, thanks for the new catchphrase, Dean.

  • Another Investor 7 years ago

    Had two all cash offers on REO’s countered at pennies off list price in the last two weeks. Told them both my offer was highest and best and to sell it to someone else.

    Agree about the level of activity. We need the foreclosure machine to produce more inventory.

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