Many sellers should be very concerned after this past week’s economic crisis. Who isn’t watching TV, reading the Newspaper, or getting news online about how this mess could affect the Real Estate Market? This especially holds true to the housing market here in Tampa.
If you are trying to sell your home and haven’t already started a short sale or foreclosure process; then congratulations to you! I believe if sellers realized just how much more difficult it’s going to be to find a buyer who can qualify for a home in today’s economy, they would take whatever offer they can get. But some people selling their homes still aren’t convinced.
I was working with a buyer last week on purchasing a home in the Clearwater area, which made me think about this whole scenario. As we were trying to negotiate a price with the seller and could not come to terms; I thought “if they only knew”. Knowing the Real Estate Market is very hard to do unless you live and breathe it every day like we do as Real Estate Agents.
I cannot tell you how many times I hear other Real Estate Agents say the seller didn’t take the offer they got 3 months ago and they are really regretting their decision now. What happens, is that when sellers want to meet the buyer’s terms, those buyers have already taken their business elsewhere. Because we’ve got about 15 months of inventory in the Tampa , St. Pete and Clearwater areas, buyers have so much to choose from. They know they are in the driver’s seat and eventually will find someone who is willing to meet THEIR price and terms.
The qualified people who are buying now are savvy. They are not willing to be in a situation where they could potentially loose money if they buy now, so they are making low offers. Since many sellers are now competing with short sale and bank owned properties it is going to affect the market even more. Let’s face the facts, if your home doesn’t appraise, no one is getting a loan.
Here’s the email that was exchanged between the seller’s agent and myself (buyer’s agent) on the offer my client put in last week.
I spoke with the buyers and here’s their position. In light of what is going on with the bail out plan and the difficulty buyers will now be faced with in obtaining loans they feel their offer is fair. Knowing certainly with an increased amount of foreclosures coming on the market, conditions in our market will not improve for some time.
The buyers are pre-approved, putting a large amount of money down 35% and have an 800 credit score. Savvy buyers such as Jack and Terry, are not willing to buy in our market, without considering an even further possible depreciation.
If your sellers are really holding out for a few thousand dollars more in their pocket they could be waiting a long time. There is also a very good chance that finding a buyer as qualified will be much more difficult with the banks not lending money freely. I’m sure you’ve run into many situations this past year where contracts have fallen through after all the hard work we’ve done.
I’m attaching a spreadsheet that outlines the home prices and amount of sales comparing Aug 2008, to Aug 2007. The median sales price has come down 20% from last year. If prices were to drop an additional 5% over the next few months, which we know is very likely to happen, that would equate to 11,000 from the 220K they are asking for. (Our offer was 205K)
As I’m sure you know if the house doesn’t appraise, because they waited too long, then the sellers will be in an even worse situation. Still having to pay for taxes and maintenance of the home until it sells.
I know when we spoke yesterday you mentioned you were just the messenger. I am encouraging you to please be more than a messenger and relay this information to your sellers. Maybe if they see the stats, and after last night’s news media talking about how credit will no longer be available to home buyers, they would take our offer and reconsider.