Sunday, October 06, 2019
We've been in this particular dynamic for well over five years now. Buyers should keep this fact front of mind when making offers. The chance of buying a property below fair market value is practically zero and even finding a seller willing to accept fair market value is not a slam dunk. With the majority of listings asking delusional prices fair offers are often rejected. Here's an excerpt from an older post about offering strategies:
I've prepared and received many hundreds of offers over the years and I've seen quite a few that never stood a chance of success, a large number recently. Beginning negotiations on a positive note helps, and price and terms of the very first offer set the tone. Regardless of commentary to the contrary, emotions are a real part of most real estate transactions. We have humans on both sides so it's reasonable to expect human reactions and emotions. Assuming a property is priced within the range of what the data suggest is fair market value, an offer reasonably near that range will usually be received by a seller as a constructive beginning. An offer way below that fair range is usually received with negativity and little to no optimism that a deal will be possible. Constructive optimism or adversarial negativity. That first offer determines the tone of the negotiations and often has an impact on final terms. Anyone making a crazy low offer should be prepared to have to start over at a higher number when they receive no counter from a discouraged seller. Another thing; I have presented enough low offers to know that if one part of an offer is unattractive the other parts better be compelling if there is to be hope for a deal. An offer far below asking might be considered if it's cash, with a quick close. Might. An offer with a close more than 45 days in the future, contingent upon a mortgage or even worse, the sale of another property, better be close to the seller's wished-for selling price to stand a chance of consideration. Buyers who are compelled to offer low should consider the attractiveness of the terms and make them as shiny as possible if they hope to have any chance of success. New, overpriced listing might need a little seasoning time on the market before an unrealistic seller will consider reasonable offers.
I'm waiting for someone to consolidate the largest concrete restoration companies in the state and put together an IPO. It could be huge with demand for contractors off the chart. Condo associations contemplating concrete projects are finding that wait times can run into years if their project isn't a particularly enticing one. Owners in buildings that have been putting off addressing concrete repairs are in for a shock when they begin requesting quotes. If your building is showing cracked balconies or walkways and your Board is not discussing this, it might be prudent to push for what's only going to become worse and more expensive. [Translation: a large and growing special assessment] Procrastination can be very expensive.
My hope that the ocean would calm down enough during the annual mullet run to allow for some relatively peaceful surf fishing has not been realized. The ocean remains disturbed and the running mullet are safe from my cast net as are the snook that those mullet may have fetched for me. Oh, well. There's always next year.
“I thought Twitter was driving us apart, but I’m slowly starting to think half of you always hated the other half but never knew it until Twitter.” __Michael Arrington