Denver home buyers are a bit frustrated, thinking the sellers have to accept low ball offers. And they are being rejected. Sellers are getting multiple offers. Will low ball offers still work? This Denver Realtor says “Don’t do it!”.
The fact that the inventory of homes available (forget that the foreclosure and short sale homes in Denver that were driving prices lower early last year have left the market) seems to have eluded some folks. I still hear Realtors across the country advising their clients (but not in so many words) that it is OK to insult the seller, and tell them their home is not worth what they are asking by saying the comparables do not support the price. Naturally theDenver listing agent’s pride is also damaged at the same time (as hard as I try not to let it affect me, I do get angry when I start to get my nose shoved in it, without cause).
I do not think theDenverbuyer’s agent has missed the point that the market has changed. They do owe a duty and obligation to their client to present any offer the client wishes to make, but at what cost? A seller who thinks your offer is a joke, or is offended, is much less likely to negotiate a fair deal with you. So what is gained?
Here is the bit the Buyers may be missing regarding their offer…It does not matter what the other houses sold for last year. That is old news. What matters to the appraiser first is that there are comparable sold properties that have sold for the same or higher price in the last 6 months, and that when adjusted for improvements, location, condition, they will support the contract price for this property. Then the appraiser checks to see if the property could be replaced by others on the market at a lower price, and then adjusts for improvements, location and condition.
It is interesting to note that back in the height of theDenverreal estate market there were so few homes available we counseled our buyers that the best price we might be able to get for them was getting them there first. In our sales meetings we used to joke that the market would catch up to our price if we were patient.
Today, inDenver, our single family home real estate market has 40% fewer available properties versus this time in 2011, while the number of closed sales are up 12% in February. This means the Seller has more prospective buyers per house for sale and is more likely to have multiple offers.
More to come…