I explain to the agents that the bank will want market value. Market value is determined by the comparable sales. So, before making an offer, the agent should look at the comparable sales. Some of these agents get upset. They say things like, "Oh, quit horsing around and just tell me how much we have to offer." They should offer a price that is close to the comparable sales. An agent should never advise a buyer to buy any kind of home, a short sale or a bank-owned home or even a traditional sale, without looking at the comparable sales. You can't make an intelligent decision if you don't know the comps.
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At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.
Comments
I agree completely. As soon as my buyer wants to make an offer on a house I run comps (Solds, Actives, Pendings, Contingencies, Expireds, Cancellations – the whole picture) and we sit and go over them. Then I will ask them what they want to offer on the house in question. Sometimes even after all that I have to explain why their lowball offer won’t fly, and we start all over again. What – you want to offer outrageously low and ask them to pay your closing costs too?! Somethimes this is a pattern with buyers… But I always do the “homework” so they can make an honest offer and we won’t insult the seller/bank/investor/listing agent.
Great article. I am a first time home buyer and I still have this “it’s buyer market” in my head.
I have a real estate buyer and I think he does really good in knowing what offer we should put in.
We recently put an offer on a distressed home. The home was being sold by the owner and it is screaming for help (drainage issues, backyard flooded, homeless tenant took up residence, and the steps to get into the house was demolish by hurricane Irene. Anyway, the listed price was $99k. The other homes in that area was about $214k and up. Again, this home was a contractor or a handyman special.
My goals is to knock it down and rebuild. So, I wanted to offer a bid of $70k to $80k. Do you think we were too low? This house has been on the market for 1 year.
Rochelle: You sound like an excellent agent, and your clients are lucky to have you!
It doesn’t matter what I think. It matters what your agent thinks, what the seller thinks but most of all what the bank thinks.