As I witnessed my first office meeting with Halstead this past week, many agents were discussing how many of their buyers were offering such low offers on properties. I must admit, I do see this as a trend. Personally, my buyers are offering around 25% under ask with no reasoning. I am not quite sure where this methodology is coming from…it appears not to be in one price point–but all over the board: from $280,000.00 to $3M units.
For the reason that I am a huge data driven individual when it comes to real estate trades, I do not see the validation of 25% reduction of ask at this time. These buyers are REAL; but, their “want” has not turned into a “need”. It is almost as if they are throwing paint all over the city with these low offers hoping to find a real masterpiece of a unit without having a true passion for a specific property.
On the inventory side, I have seen more realistic pricing. Not everything but, I feel we are about two-thirds of the way there with the majority of the newly listed units. I do have a method to pricing regardless of the market: I ALWAYS pitch to price a unit 5% above what the unit will actually trade for. The trade is based on a minimum of what has correspondingly closed within the last 3 months blended with similar active units – with more weight on the closed units.
Why is this my method? Partly, because I cannot seem to lose the foundation I gained years ago as a national real estate analyst and residential property appraiser. Secondly, because I hate to play the game of what brokers call “buying a listing” with an outrageously inflated list price. Thirdly, I know this is the only way to sell a property –in any market. Most importantly, it is best for the seller, adds to my creditability as a professional and integrity as an individual.
I do believe, I am going to see my buyers’ “wants” turn into a real “need” in mid-February 2009. We all need to keep in mind that real estate is a commodity and even though the price per square foot may take more of a dip throughout 2009 – the real return on the investment will be appreciated by all within the next five years…
