REO Underpricing Strikes Again
Tuesday, July 29th, 2008
On Friday, my client called me SO excited to see a listing right around the corner from the LIVE Urban office. I pulled up the listing and met her there within minutes - it had just gone on the market that morning and seemed too good to be true.
We toured the property, a cute little bank-owned half-duplex with a garage and shady deck, private backyard, and nice, open layout. There were other buyers going in as we were leaving, so I walked straight back to the office, pulled comps, and we decided to offer almost $20,000 above the list price - my buyers LOVED this property and the comps showed that market value was higher than the property had been listed.
We submitted an offer within the hour, and I called the listing agent and his office several times to make sure that they had everything they needed to submit the offer to the bank. I was told that the listing agent was out of town, but that the offer would be submitted to the bank immediately - I had a feeling it would not. We spent the weekend waiting it out, but I knew that the bank would still be accepting offers over the weekend.
Yep, same old story - there were 20 offers on the property - and my buyers didn’t get it - too bad they also didn’t have a chance to enter the bidding war or even receive a counteroffer, because both the listing agent and the bank sat on the offers until there were so many on the table they were rolling in them.
Maybe the banks have the right idea - create a frenzy by pricing the property so low that dozens of buyers fall in love and submit offers, cross their fingers, and then….wait, only to be disappointed by the entire process. Should homeowners wishing to sell their homes quickly be doing the same thing? Listing their property at 20-30K below market value?
Maybe. Maybe this is what the confused market has finally come to - but it’s a rough game for Buyers, and for their agents!
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