Condo Sold - But Not To Me
I got home last night and did not have a fax waiting for me, so I guess the condo I made an offer on yesterday was sold to someone else. I'm going to watch the MLS listing for a month or so to see what the final selling price was. (That data only shows up once the sale is final.)
Second Offer Submitted On Condo - Updated
Well, the holidays have come and gone and I'm catching up on my sleep, work, and other aspects of my life that seem to get put on hold during the hectic times of late December. Even though I was out of town for Christmas, I still kept an eye on a condo I made an offer on earlier. It remained unsold, which I expected.
Today I submitted my second offer on the property. Since it's been on the market at least three weeks now (after having fallen out of escrow once prior to that) and supposedly, the seller needs a quick sale, I only raised my offering price by $750, which means I'm still close to $40,000 under the asking price. However, thanks to a comment left by OCRenter and some stats on his blog, I also included a table that I asked the listing agent to share with her seller. It shows the number of available properties in the greater Phoenix area doubling since August, 2005 and the number of sales falling, both month over month, and compared to the same month last year. Clearly, I pointed out, the competitive pricing environment of months past no longer exists. Perhaps this table, and the additional month of HOA fees and mortgage payments that the seller has just paid, will encourage the seller to accept my offer. I'll let you know what the response is...
UPDATE: No phone response from the listing agent yet, but I notice the listing status has now changed to "Pending", so either the seller accepted my offer via fax (which I won't see until I get home this afternoon) or they got a better offer previously and the agent was just lax about updating the status in the MLS.
Today I submitted my second offer on the property. Since it's been on the market at least three weeks now (after having fallen out of escrow once prior to that) and supposedly, the seller needs a quick sale, I only raised my offering price by $750, which means I'm still close to $40,000 under the asking price. However, thanks to a comment left by OCRenter and some stats on his blog, I also included a table that I asked the listing agent to share with her seller. It shows the number of available properties in the greater Phoenix area doubling since August, 2005 and the number of sales falling, both month over month, and compared to the same month last year. Clearly, I pointed out, the competitive pricing environment of months past no longer exists. Perhaps this table, and the additional month of HOA fees and mortgage payments that the seller has just paid, will encourage the seller to accept my offer. I'll let you know what the response is...
UPDATE: No phone response from the listing agent yet, but I notice the listing status has now changed to "Pending", so either the seller accepted my offer via fax (which I won't see until I get home this afternoon) or they got a better offer previously and the agent was just lax about updating the status in the MLS.
Holding Off On Second Offer
I spoke with the agent for this property again. I told her I noticed that the property was still available and I would like to make another offer on it. She remembered me and said I would have to do "much better" on my offer. I was able to get a bit more information. The listing said the property fell out of escrow and the seller wanted a quick close and had reduced the price $10,000. Based on that, I made the assumption that the owner needed to sell the property in order to complete the purchase of another property. That may not be the case. I found out from the agent that the property is currently empty and the seller is living elsewhere. So the motivation from holding up another purchase is gone, but in its place, there is motivation of holding on to a vacant property. The problem is the former motivation is much stronger than the latter. If a pending purchase is being held up, there is a large, daily motivation to sell, but if the property is vacant, the motivation is more in the monthly timeframe - due to mortgage and HOA payments.
So I'm a bit torn as to what to do. I was planning on submitting another offer about $5,000 higher than my first offer. Given this new information, I'm fairly certain that would be rejected as well. Instead, I think I may wait and see if the property is still available next week, between Christmas and New Years. If it is, the seller should have the prospect of another needless mortgage payment firmly in mind and may be more receptive. Also, during the holiday lull (which is also going on right now), there may be fewer offers to choose from. I suspect the seller may be waiting until after the holidays to see what offers she might get. Hopefully, if Christmas comes and goes and the place is still unsold, her resolve might weaken a bit.
On a different note, I was checking my referrer logs this morning and noticed that over 25% of the last 100 visitors here came via a link at Blueprint For Financial Prosperity. I'd like to thank Jim for the nice blurb and link. Welcome to those that have come from there!
So I'm a bit torn as to what to do. I was planning on submitting another offer about $5,000 higher than my first offer. Given this new information, I'm fairly certain that would be rejected as well. Instead, I think I may wait and see if the property is still available next week, between Christmas and New Years. If it is, the seller should have the prospect of another needless mortgage payment firmly in mind and may be more receptive. Also, during the holiday lull (which is also going on right now), there may be fewer offers to choose from. I suspect the seller may be waiting until after the holidays to see what offers she might get. Hopefully, if Christmas comes and goes and the place is still unsold, her resolve might weaken a bit.
On a different note, I was checking my referrer logs this morning and noticed that over 25% of the last 100 visitors here came via a link at Blueprint For Financial Prosperity. I'd like to thank Jim for the nice blurb and link. Welcome to those that have come from there!
Another Offer Submitted (Updated)
I put in an offer yesterday on a condo that looks like it's in pretty good shape. The listing said the seller needed a quick close, which is what caught my eye. When I talked to the listing agent, I was a bit disappointed to learn that the seller was looking to close around the middle of January. That's almost a month away and not really what I would consider a "quick close." However, I submitted an offer anyway, at about $35,000 under the list price. Based on my research, that would still net the seller about $15,000. I haven't gotten a response yet, but they have until 4:00 PM today. I am preparing myself mentally for the "this offer is ridiculous" call. I plan to point out that my offer is not contingent on financing and is about as close to a sure thing as one can get. I won't be falling out of escrow.
The previous property I made an offer on is still for sale. If it's still available tomorrow, I will submit another offer. Supposedly, this is another seller who wanted a quick close.
UPDATE: Just got the call and yes, the exact words used were "ridiculous offer." I made my speech about my offer being a sure thing and the agent said sarcastically, "and all she has to do is give up $35,000 of equity." I replied "She wants a fast close and everything comes with a price." (By the way, I came up with my figure by taking 76% of the listing price.)
One thing she did say was that the fact that I was not using an agent would not save the seller 3% commission because she had a listing agreement that specified she would pay 6% commission no matter what. Well, either the seller signed the worst listing agreement in history or that agent is lying. The listing agreements I have seen say the full commission will be paid to the listing agent only if the agent also acts as a buyer's agent. She would not be acting as my agent and therefore should not get paid for doing so.
Oh well.. Another one to put in the file for follow up in a week or two.
The previous property I made an offer on is still for sale. If it's still available tomorrow, I will submit another offer. Supposedly, this is another seller who wanted a quick close.
UPDATE: Just got the call and yes, the exact words used were "ridiculous offer." I made my speech about my offer being a sure thing and the agent said sarcastically, "and all she has to do is give up $35,000 of equity." I replied "She wants a fast close and everything comes with a price." (By the way, I came up with my figure by taking 76% of the listing price.)
One thing she did say was that the fact that I was not using an agent would not save the seller 3% commission because she had a listing agreement that specified she would pay 6% commission no matter what. Well, either the seller signed the worst listing agreement in history or that agent is lying. The listing agreements I have seen say the full commission will be paid to the listing agent only if the agent also acts as a buyer's agent. She would not be acting as my agent and therefore should not get paid for doing so.
Oh well.. Another one to put in the file for follow up in a week or two.
Another Offer Made And Turned Down
I love it when real estate agents feign surprise or outrage at your offers. I came across a property in the MLS today that had just fallen out of escrow. The description said the seller reduced the price by $10,000 and that the seller wanted a quick sale. The property just came back on the market within the last day or two, so I checked it out and quickly put in an offer that was $40,000 under the asking price, but all cash and "as-is." About two hours later, I got a call from the agent, who asked "Is this offer for real?" In situations like this, I've found if I keep my answers short, the other party tends to talk more, so I just said "Yes." She said "It's listed for $160,000 and that's already been reduced $10,000." I said "Yes, but the price I offered is what I can pay to get the return I want on my investment." The agent seemed put off and said "The buyer wants me to tell you she's rejecting this offer." With a pleasant tone, I replied "OK, but this is an all cash offer and I can close as quick as you want. I won't back out of escrow." I was told the buyer still was rejecting the offer. I thanked her and hung up.
In retrospect, I should have done a few small things differently. First, I should have asked if she would tell me why it fell out of escrow. That might have allowed me to emphasize the pluses of my offer better. For instance, if it fell out due to the buyer being unable to get financing, I could tell her that was guaranteed not to happen with me, since I was paying all cash. Second, instead of re-emphasizing my ability to close quickly, I should have again mentioned it was an as-is offer and that I would not back out from something the home inspection might turn up. (The house was in very good shape, by the way.) This and the financing issue are the two most likely reasons for falling out of escrow, so I should have shown how those would not be a problem with my offer. Instead, I emphasized fast closing, which was mentioned in the listing, but probably wasn't that big of a deal at this point, since it had only been back on the market a day or two. But, in my defense, I did get the agent's call while I was shopping at Costco and I was caught a bit off guard.
I'm not put off in the least about losing this property (or the agent's attitude of treating my offer like it was a joke). Active Arizona MLS listings are at levels that haven't been seen in years. It is no longer a seller's market. It may take a while for Realtors and sellers to realize this, but they will eventually. It's just a matter of time before I come across the truly motivated seller that will accept my offer. Until then, I'm treating this as a declining market and keeping my bids low to be a bit conservative.
In retrospect, I should have done a few small things differently. First, I should have asked if she would tell me why it fell out of escrow. That might have allowed me to emphasize the pluses of my offer better. For instance, if it fell out due to the buyer being unable to get financing, I could tell her that was guaranteed not to happen with me, since I was paying all cash. Second, instead of re-emphasizing my ability to close quickly, I should have again mentioned it was an as-is offer and that I would not back out from something the home inspection might turn up. (The house was in very good shape, by the way.) This and the financing issue are the two most likely reasons for falling out of escrow, so I should have shown how those would not be a problem with my offer. Instead, I emphasized fast closing, which was mentioned in the listing, but probably wasn't that big of a deal at this point, since it had only been back on the market a day or two. But, in my defense, I did get the agent's call while I was shopping at Costco and I was caught a bit off guard.
I'm not put off in the least about losing this property (or the agent's attitude of treating my offer like it was a joke). Active Arizona MLS listings are at levels that haven't been seen in years. It is no longer a seller's market. It may take a while for Realtors and sellers to realize this, but they will eventually. It's just a matter of time before I come across the truly motivated seller that will accept my offer. Until then, I'm treating this as a declining market and keeping my bids low to be a bit conservative.
