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Thursday, August 26th, 2010 at 9:55 PM

Take Your Shot

An example of a buyer who took a lowball shot at a listing that had some tell-tale signs:

1.  A number of other active listings nearby that weren’t selling,

2.  Out-of-town REO listing agent,

3.  A World Savings/Wachovia/Wells Fargo original loan amount of $687,000,

4. A newer tract house that was unattractive enough that it probably wasn’t getting any offers.

Posted on Thursday, August 26th, 2010 at 9:55 PM in Foreclosures/REOs, Jim TV, Market Conditions, North County Coastal, Thinking of Buying? | 17 Comments » | Print Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Reader Comments: 17 Responses

  1. Low ball is the way to go as prices are still way too high unless one wins lottery or is a trust fund baby.
    Those $400K to $700K houses in OC should come down at least $200K to $100K before they are “REAL” estate. It is still full of air… no matter what real estate agents or Obama tell me.

    RC | August 26th, 2010 at 11:43 pm

  2. It never hurts to try! :)

    CA renter | August 27th, 2010 at 2:02 am

  3. I wish more realtors would have the balls to advise clients to lowball the mispriced garbage, but JtR seems to be a minority of one within the cabal of realtors, who all seem to mistakenly believe that it is better for them to operate in a stable or inflating market of overpriced turkeys and low transaction volume, instead of aggressive pricing, even if it’s declining, which might result in more transactions instead of a standoff.

    Let’s see. 5% of 1 sale at 115% versus 2 sales at 90%. I must not get the new math. ;-)

    Keep up the good work JtR!

    Sean | August 27th, 2010 at 6:42 am

  4. “It’s a great time to look” – JtR. I agree with that. It only takes one as this person proved.

    FirstTimeRenter | August 27th, 2010 at 6:48 am

  5. Jim,

    In a buyers market, doesn’t the $650k closed sale become the comparable (new price level) for other homes in close proximity?

    Ginger | August 27th, 2010 at 7:43 am

  6. This low ball transaction is a perfect example of my two favorite quotes as they apply to real estate:
    (1) “Be quick, but never in a hurry”
    (2) “If you don’t ask, the answer is already no”

    Susie | August 27th, 2010 at 8:28 am

  7. a call to the buyer’s agent would be interesting. i’m curious if they started at $650k and it was a simple acceptance. or did they start lower and get countered. or higher and use inspections to rengotiate lower?

    you don’t have an old video of the interior do you?

    SFrealtor | August 27th, 2010 at 9:49 am

  8. Interior tour:

    http://www.youtube.com/watch?v=WHKtICbBb5U

    No answer at realtor’s office, she is an independent that I’ve never heard of before. The listing agent had a link in remarks for agents to submit offers, that’s another tell-tale sign that a lowball might work, when the listing agent is so lazy that negotiations are on-line only.

    My favorite quote, though I hate it when my buyers throw it back at me:

    “If your offer price doesn’t make you cringe, it’s not low enough.”

    Jim the Realtor | August 27th, 2010 at 10:23 am

  9. The $650,000 is a valid comp to me and every buyer in the marketplace, just not to sellers.

    Jim the Realtor | August 27th, 2010 at 10:24 am

  10. And I’m just curious, JtR, how many times has a listing agent come back to you in the last couple years with: “Your buyer’s offer has insulted my seller!”?

    Just my 2 cents, Jim, but I think you could write a terrific book with your real estate adventures over 25 years (and include a lot of awesome info too). You just have to think of a catchy title!

    Susie | August 27th, 2010 at 12:25 pm

  11. Original sales price was $792,000 in 2004.

    Jim the Realtor | August 27th, 2010 at 10:13 pm

  12. Agents are regularly insulted, that’s how ridiculous the business is – they think it’s all about them, instead of getting out of the way and selling the house.

    Jim the Realtor | August 27th, 2010 at 10:14 pm

  13. Jim, your comments in the video are pure gold!

    greenlander | August 27th, 2010 at 11:27 pm

  14. How true: Its how I got my own personal starter mansion (ok, I kid slightly, but)…

    The out of area real estate agent was so lazy she didn’t count the bedrooms & bathrooms, or check the square footage after the PERMITTED addition on the tax roles!

    Listed a 4bd/4ba, 3000 sq ft, single-story house as 3bd/2ba, 2000 sq feet! And she was in there because she took some (bad) photos). Her lazyness easily cost the bank $50K.

    Basically, out of area real-estate agent is a huge flag for a smart buyer. Jim, do you have the ability to search for such things?

    Nicholas weaver | August 28th, 2010 at 6:35 am

  15. JtR,

    “9.The $650,000 is a valid comp to me and every buyer in the marketplace, just not to sellers.”

    And why should this be considered a valid comp to the organic sellers of the neighborhood? The IRS definition of fair-market value is the price something would have for a buyer that doesn’t need to buy and a seller that doesn’t need to sell.

    From my POV this house has a seller that has no use for the home besides to dump it. Add to this that have a out-of-town realtor. Doesn’t sound like holding out for ‘fair-market value’ was in the interest for any of the parties involved in selling.

    Low balling is great for these types of properties, as long as people don’t get caught up in it and think that they are entitled to apply this method to all properties. One also must remember there is a lot more risk involved in buying a REO or short sale than a normal organic sale.

    There is a lot of money to be made in RE in the coming years. Good luck to all out there.

    SoCal condo owner | August 28th, 2010 at 10:49 am

  16. Either way, unless one digs this up down the road a ways to get the *true* story behind it, if someone else on the road is selling and a buyer comes along, all they have to do is point at this one and say what it sold at, and there’s your argument.

    Even if this one ends up being flipped for a bit more…it’ll still be well below what these other idiots paid for theirs.

    Matt | August 29th, 2010 at 9:27 pm

  17. True stories are easily a click away, including list dates, delist dates, tax values, bank foreclosures, and all previous sales data. Any home owner with internet access can find all the history they need to make an informed decision about the price they are willing to accept for their property.

    SoCal condo owner | August 30th, 2010 at 2:56 pm

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