Hat tip to WC for sending in this realtor story - here are excerpts:
“I’ve never done an open house. I don’t need to. Those are for agents who don’t know how to get business on their own. I have a large sphere of influence. I’m an extrovert. When I walk into a room, I can engage in conversation with anyone. People who work with me know that I’m a driver. I’m a go-getter. Another thing is that real estate isn’t my family’s sole source of income. If it was, I think my clients would feel that pressure.”
Flores elaborates, “The amount of offers we write is going up. Because prices are still low and rents are increasing, you have a lot of investors with cash that are buying up everything under $400,000. We’re competing with all cash. Anything under $500,000 typically receives multiple offers. If you have a listing, you’ll get investors who write all-cash, no-contingency offers with a 14-day close. You have all these poor VA or first-time FHA buyers come in with strong offers, but from a listing standpoint, it makes sense to go with the investor, even though you want to help out the military.”
“It can be extremely depressing,” Walkush adds. “We try to put a compelling story together when we send cover letters to the listing agent, saying, ‘Give this VA buyer a chance!’ Another thing that is knocking out the VA, FHA, and small-down-payment buyers is appraisals. Appraisers are appraising based on properties that closed 90 days or longer ago. They don’t want to recognize the upward movement of the market. So, you’re writing an offer for a VA buyer, and that seller is anticipating that the appraisal can come in $10,000–$15,000 lower. That puts the FHA buyer at a disadvantage. They can’t come up with the cash to cover what the banks aren’t willing to loan.”
“Buyers nowadays understand that they’re going to have to bid higher than they would like to,” Flores explains. “When you have an FHA buyer all excited to see a property, realistically, the likelihood of them getting into that property is low.”
Real-estate broker Viki Navardauskaite has considered getting a part-time job. “I don’t want to switch careers, but it would be nice to have something on the side that’s more stable. I love what I do. It’s very exciting. In real estate, there are a lot of emotions involved. You get married, you buy a house, and you have a baby. Those are the most important steps in life.”
Some of that excitement is starting to dwindle.
“When I show my clients the right house and see a smile on their faces when we write an offer, it gives me such a sense of hope. But things are changing. Now, the listing agents will say they already have 15 offers when I place one. Imagine the chance of getting the house! Last week, I submitted four offers for clients. On Wednesday, the emails started coming in. Not a single one was accepted. It’s so disappointing. Unfortunately, that’s not uncommon.”
Viki tells her clients to remain positive. She encourages them to get their offers in quickly. “I tell my buyers, ‘Roll with the punches.’ It’s almost like, ‘Just take what you can get.’ It’s getting to that point. It’s sad.”
Viki has seen the market go through drastic changes in the past six months.
“With the lack of inventory and the high demand, what we’re experiencing are buyers running around making offers. Everything has multiple offers. It’s really hard to get anything accepted. It’s driving prices up. People submit over asking price and they still don’t get in. I urge my buyers to make their offers as clean as possible. Nowadays, listing agents won’t even counter you. They go ahead and choose the highest offers. Since the summer, there’s been a new rule: make your highest and best offer right away.”
Due to these changes, Viki has seen many clients become discouraged.
“I have clients get into the market and see how hard it is to buy a home. I have a lot of buyers saying, ‘Oh, my god! I will never get into a house.’
“I had a short-sale property listed in Lemon Grove in early September,” says 30-year-old real-estate broker Dave Rice. In less than 24 hours, I had 21 offers. Of those, 18 were all cash. Cash buyers bring bank statements to verify that they have the funds. I verified $16 million in cash chasing this one $230,000 house.
“This has been happening for about the last six to eight months. Around the beginning of 2012, investors started to sense that we’d hit the bottom, and the market started to turn around. There’s been a frenzied rush to get in. Inventory has been tight for the last year and a half. Largely, that’s a result of banks delaying foreclosures. They aren’t foreclosing on properties, either, not as frequently as they could. There are fewer that are falling into default. A lot of the loans that were made in the mid-2000s have already gone bad.
The story includes what it’s like behind-the-scenes at a real estate office: