On Your Mark, Get Set, Sign It!! - The Plight Of Today's Buyer

By
Real Estate Agent with Trident Realty Group

Here's the flip side of the coin. So I'm working as a buyer's agent all over San Diego County for these buyers, some have all cash, some with 20% down AND WE CAN'T LAND A HOUSE. At least not yet...

I'm following my own advice from my post as a listing agent: Short Sale Listing Agents Are (Not) Jerks!!. We're writing offers on day one of the listing, many times over list price giving the seller control of services (even though in California buyers are allowed a say in whose services are chosen. Yeah right, when pigs fly!). We're signing an umpteen page addendum and following the bank's checklist of hostage situation demands. My clients are nearly willing to give up their soul and my commission to close on a house, but to no avail and again I say, at least not yet.

Here's what's happening, or at least what I think I see (feel free to chime in if you see otherwise). Investors are coming out of the woodwork and have been for quite some time. Inventory is tight. Banks and listing agents that have control of the REO and short sale inventory are helping set the pace and the buyers are chasing them rabbits (houses) like greyhounds out of the gate. As in all races there's only one winner of course. I've met buyers that have untouched equity lines on their primary houses looking for deals to flip. I have clients that have saved for 10 of their working years to put down 20%. And then I have buyers with liquid, cold, hard, cash money. Where they got it, I haven't gotten that far with them yet. I just see the "Two Comma" account balances/statements when we submit the offers, an accomplishment we all aspire to attain I'm sure. Note - there are two commas in $1.0M.

To top it all off, we are getting beat to the punch by other buyers. Inconceivable! What is it? Are my buyers not quick enough? Not strong enough? Their agent not schmoozing enough? What? Well whatever it is, I know we will strike gold, find the needle in the haystack, get lucky, whatever you want to call it. I'm just glad my clients are patient and adaptable.

I'd love to hear what you're experiencing out there, tell me I'm not alone. For those of you hitting it big or often please, share your thoughts would you?

Thanks, good luck out there!

Marvin

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Ambassador
1,399,509
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - San Jose Probate Agent

Marvin - we are seeing the same thing in San Jose, Ca.  My sense is that listing agents already have the buyer in the bag. Was talking to an agent in my office yesterday ... she took a listing ... and had it in contract before it went on the MLS. In fact, she never did put it on the MLS.  A lot of short sales are listed substantially below market value ... check your comps! I submitted an offer last night ... list price $429,000 ... offer $465,000 waiving appraisal contingency.

Nov 19, 2009 09:10 AM #4
Rainmaker
54,156
Marvin de la Vega
Trident Realty Group - Chula Vista, CA

Angelica - under $200k in Monterey (Seaside)? It's no wonder you've got this kind of activity. Hope you're closing deals up there. Thanks. Md

Lorraine and Loretta - As far as strategy goes, like you I've had to aim low with my clients. I'm working in the sub-$400k market. It's astounding to see how many buyers have that kind of cash ready to plop down. We'll see how it all pans out, we'll keep hustling. Thanks for stopping in.

Joyce - If I were a betting man I'd say the high end areas are next with this kind of activity, but we'll see...

Nov 19, 2009 09:18 AM #5
Rainmaker
54,156
Marvin de la Vega
Trident Realty Group - Chula Vista, CA

Kathleen - For the REO listings, I'm aware that some listing agents hang on to listings before they go live. Good for them to double end a deal, not so good for us. Down south both short sales and REO's generally do list a little low. I feel bad for the buyers out there that are looking for a home to move into - so much competition! Nonetheless, I hope your buyer gets the house. Thanks, Md

Nov 19, 2009 09:41 AM #8
Rainer
129,486
Andrew Martin
Keller Williams - Danville - San Ramon, CA

Marvin,

Exact same thing happening in the Bay Area. There was a home in Livermore that just got 41 offers with 6 of them being all cash.

The amazing thing is there I have not seen a single article in any paper on the truth of whats happening in the marketplace.

I have a bunch of ready, willing and able buyers, and there is nothing to buy. (unless you have all cash or you go to the listing agent directly).

It's time to become a listing agent again. Way to hard to work with buyers right now.

Nov 19, 2009 10:12 AM #9
Rainer
154,608
Ted Tyndall
Davidson Realty Inc. - Saint Augustine, FL
FL Homes for Sale-Palencia, World Golf Village,Nocatee,St. Augustine

Exact same situation here for homes around $160,000 and down.

Nov 19, 2009 10:14 AM #10
Rainmaker
110,428
Debbie Rumsey
Sea Coast Exclusive Properties, Encinitas, CA - Encinitas, CA
Realtor, Green, EcoBroker

Hey Marvin,

Same story in North County San Diego. I have a handful of buyers that are in the $500k or below range and it's a brutal market for them as far as competition!  We are getting beat out by cash or someone is coming in slightly more than my clients can afford.  We just keep pushing forward with clean offers and highest and best prices.....I think we will find something as long as we keep a positive and aggressive attitude! 

Hang in There!!

Nov 19, 2009 10:50 AM #11
Rainer
240,184
Geoff ONeill
John L. Scott Medford - Medford, OR

We are running into this situation in Southern Oregon too.  I agree with Andrew.  Time to take on new listings as the tide has changed.  The short sales are taking time, and it's plenty of extra work on the listing side, but they are beginning to go through.

Nov 19, 2009 10:52 AM #12
Rainer
59,121
Sal Antsipenka
Realty Executives - Naples, FL

Your clients are just trying to low ball and so-called "steal" a home. Most of the aggressive flippers are offering way over asking price leaving other buyers in a rut. It looks like another bubble in a way - shortage of affordable inventory, no new housing and quickly disappearing foreclosures and good quality short sales.

Nov 19, 2009 10:59 AM #13
Rainmaker
54,156
Marvin de la Vega
Trident Realty Group - Chula Vista, CA

Andrew - the house I listed in my previous post is up to 37 offers. Crazy!! We had to stop the madness, and it's a short sale...

Ted - amazing. Are you on the coast?

Thanks Debbie - I know we'll hit one soon.

Geoff - negotiators are human too. I treat them according to the golden rule.

Sal - let me re-phrase. What I meant by "aiming low" is targeting a price range below what my clients' ceiling is (like Lorraine) so that they have room to move up if they want to be aggressive with their offer. I certainly run comps before recommending strategy to my buyers; as I'd mentioned most LA's list low to create activity and pick up a few unrepresented buyers in the process. Now as a listing agent, pointless low-balling bugs me too. It shows either the agent didn't run comps or their client is driving the bus, happy to be the lowest bidder but not reaching the destination. So nope, my clients aren't low-ballers. Thanks, good thoughts.

Nov 19, 2009 11:18 AM #14
Rainmaker
558,767
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Marvin -- It's the exact opposite here in Cleveland, a buyer's dream with most short sales and REOs not flying off the market.  Perhaps your buyers should try HUD Homes as they only entertain offers for the first 10 days from buyers who will owner-occupy so investors are excluded.  Since it's all online, the process is much quicker.

Nov 19, 2009 11:48 AM #15
Rainmaker
284,597
Jerry Murphy
Long Real Estate - Anthem, AZ
Anthem AZ Real Estate

It was similar down here in Phoenix over the summer Marvin.  Although things have calmed down a bit.  I think the big boy investors started coming back into the marke about the beginning of the year.  Unfortunately the buyer interested in purchasing a residence is getting squeezed out.  Good post and best of luck to you.

Nov 19, 2009 12:38 PM #16
Rainmaker
54,156
Marvin de la Vega
Trident Realty Group - Chula Vista, CA

Chris - Hmm, nice point although, I wonder if that cat's already out of the bag here in SoCal. I'll definitely look into it. Good to hear things are good for someone somewhere. Thanks for stopping by. Marv

Nov 19, 2009 12:39 PM #17
Rainmaker
168,373
Stephanie Arnett
Coldwell Banker SRE ~ Starkville, MS - Starkville, MS
SRS, IMSD, Broker Associate, REALTOR

Frustrating...  Here's hoping for you and your buyers!!

Nov 19, 2009 04:35 PM #18
Rainmaker
54,156
Marvin de la Vega
Trident Realty Group - Chula Vista, CA

Stephanie - thanks. Meanwhile, we're back out there watchin' & lookin'...

Nov 19, 2009 05:22 PM #19
Rainmaker
579,767
Corinne Guest
Barrington Realty Company - Barrington, IL
Barrington Realty Company

Seeing much of our REO and short sale inventory now selling over asking price. The compettition is heating up but some buyers just refuse to budge out of the deal mentality. I have a few of those as well and yes they have lost the perfect house and 6 months later I have one buyer still kicking himself!

Nov 19, 2009 09:03 PM #20
Rainmaker
264,568
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

We don't have THAT much short sale and REO activity up here. And there is not much of a feeding frenzy going on either. Good luck.

Nov 19, 2009 10:21 PM #21
Rainmaker
502,098
Brian Burke
Kenna Real Estate - Highlands Ranch, CO
Broker & Advising Expert-Denver Luxury Real Estate

Also similar here during the summer especially under $300,000. Some buyers couldn't believe they couldn't get a house - in one instance we told the buyer that there were already 8 other offers in. They didn't believe us and call the listings agent who said there ware 15 offers! Go figure. It seems to have settled down some - for now anyway. ~Rita

Nov 19, 2009 10:36 PM #22
Rainmaker
54,156
Marvin de la Vega
Trident Realty Group - Chula Vista, CA

Corinne - tough lesson learned for that one buyer of yours. I always have a serious initial consultation with my clients to make them aware of the current climate and common do's & dont's in homebuying, saves me from "re-educating" them later. Thanks, Md

Thank you Wayne, we'll need all the help we can get.

Rita - I recently received a referral from a fellow AR agent here. Very similar story as yours. Would you believe the referred buyer just wanted me to verify there were indeed multiple offers on a house they wanted to write an offer on, but they didn't believe their agent was telling the truth? Being a good sport I helped them verify multiple offers/overbids and recommended they trust their agent, this is a wacky market we're in. Personally, I'm slowly starting to see the inventory grow, we'll see how the new year unfolds. Thanks for commenting! Md

Nov 20, 2009 12:34 AM #23
Ambassador
1,598,248
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

We have the same thing happening here in Orange County.  Multiple offers, over listing price and many offers written to get one accepted.

I would stay on top of short sales that have been in back up for some time as often it's not the first buyer who closes on a short sale.

Nov 20, 2009 11:13 PM #24
Rainmaker
54,156
Marvin de la Vega
Trident Realty Group - Chula Vista, CA

Christine - Good thought. I'm watching REO's but today just started looking at short sales over 150 days on the market, just in case. Thanks for chiming in. Md

Nov 21, 2009 08:35 PM #25
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