Another Twin Tale Of Two Buyers

This morning, I listed a barely used horse saddle for sale on Ebay. New, this saddle and accessories cost more than $400. I started the listing at $160 and also implemented the Buy-It-Now option for $250. A bargain, no question about it.

Within an hour, I had an email from a buyer who wanted me to end the auction early so that she could buy the saddle for $200 - and moments later, another buyer used the Buy-It-Now option to complete the purchase.

The first buyer could have placed a bid for $160 to start… but she knew that the bidding would go much higher than that. Instead, she figured she could offer me $200 to end the auction early - and she would "steal" the saddle.

The second buyer - recognizing an outstanding value - jumped on the Buy-It-Now. She knew that $250 was a good deal - and my 100% feedback gave her the assurance she needed.

This isn’t the first time I have seen this behavior on Ebay. While one buyer is trying to "steal" an auction - another comes along and makes the purchase. The exact thing happened a few months ago while I was selling a camera lens. While one buyer was telling me that $600 was a good offer - another was making the purchase for $900.

The same principles apply to buying real estate.

Last month, I worked with two different buyers who placed offers on seperate foreclosed properties. In the first case, I showed the first client a home back in late November when the home was priced at $150K. When asked how much the home was worth, I told my client that it was worth $130K - and that we should wait until the price is reduced, as the seller will not want to take that big of discount off of list price.

Why? Because instead of dropping $20K, the seller will test the market at $10K less before accepting $20K less.

We waited through several price drops until the property was listed at OUR price. Then we asked for a generous contribution from the seller towards the buyer’s closing costs.

My other buyer wanted a home that was priced at $175K, but was worth $155K. The seller dropped the price to $145K in the hope of getting multiple offers - which they did receive. Our offer was the strongest - and the seller countered us, offering to meet us halfway on closing costs. Instead of countering back - my client decided to stand pat on her offer. Take it or leave it.

Although the seller’s counteroffer still priced the property below market - my client did not care. She thought they should take our offer with no counter-offer. So, the listing agent will counter one of the other prospective buyers… and someone else will get the home.

This isn’t the first time I have seen this happen. Many people are confused about what they should offer - as well as what they should expect. My advice is to look for value and work from there. When a property is priced right - don’t expect the seller to meet your aggressive offer with an abundance of joy - not even in this market.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Foreclosures, Mythbusters, Tips For Buyers, Trends | 7 Comments »

Those Within The Housing Industry Are Most Vulnerable

While most of the nation can appreciate the devastation in our housing market, most can not understand the pressure put upon those who derive their living from it.

Many people may believe that all of those idled construction workers can simply find other means of work. Others may believe that all of the other tradespersons and professionals such as appraisers, real estate agents, real estate attorneys, home inspectors, mortgage brokers and others can simply fill out an application for a position in an unrelated field and get hired without a great deal of difficulty before their unemployment benefits run out.

It ain’t that simple.

In the past year, I have witnessed several of my colleagues lose their homes to foreclosure. Not just a few, mind you… and not just those who have been in the business a short time. Some have been successful agents for many years. In our business, there is no unemployment insurance. When you can no longer afford to stay in this business - there is no safety net.

But much worse than that, I have also witnessed several colleagues lose their lives, as well. All relatively healthy young men in the prime of their lives - taken by heart attacks. In the last few months, we have lost an appraiser, 47; a builder, 40; and a Realtor, 43 - and those are only the ones I am aware of, as there are undoubtedly others.

Unfortunately, our legislators do not want to face up to the fact that they created this mess in the first place - nor do they want to address the fundamental problems in the housing market. Chris Dodd and Barney Frank want nothing to do with the spotlight that would reveal their complicit behavior in the Fannie and Freddie  mess.

Instead, our legislators want to pass another giant spending bill to pay back all of their cronies who helped them get elected. The housing crisis? Maybe they’ll talk about that when we get to the third or fourth trillion.

Let’s look at the first $350B - it has been revealed that the taxpayers overpaid $78B for the "toxic" assets that were acquired. So Congress not only bought "toxic" assets (which they should have picked up for pennies on the dollar) but they managed to overpay for them. Now there’s something Congress is good at - overpaying!

What did these banks do with the money? Buy other banks!

But that’s not all that they did. They also paid out big bonuses.

In the last housing bill, Congress did add a $7500 tax credit for first-time homebuyers - but they removed the down payment assistance programs. To make matters worse, the tax credit was actually a no-interest loan that had to be paid back - instead of being a true tax credit. Many buyers could no longer buy.

One step forward; three steps back.

Since then, the only substantive legislation offered has been that from our Senator from Georgia, Johnny Isakson. His proposal doubles the tax credit, eliminates the loan provision, and makes the credit available to all home buyers. who are purchasing standing, vacant inventory. The Senate, eager to pick up a few Republican votes, approved some version of the proposal. We’ll just have to wait and see what the conference bill looks like.

I continue to be concerned, however, because the President and the majority party in Congress both believe that only government and its spending of dollars (of which it does not have) will reverse the trend of the last eight years of mismanaged economic policy.

Unfortunately, the last eight years involved spending an additional FIVE trillion dollars that we did not have… and look where we are, now. We have a national debt of over TEN trillion dollars… and a President and Congress eager to start programs that will add several more trillion to the total.

The one thing we do need right now is an improvement in consumer confidence - and I don’t see that happening anytime soon. The big government types are using this crisis as a way to expand government, and according to the polls - the public is well-aware of it.

Consumers vote with their wallets - and many are simply scared to spend any money. The two-year Presidential election cycle with the complicit media helped to drive down the economy… and what started out as a snowball rolling downhill became an avalanche of epic proportion. When you tell the American people that we are in the worst economy since the Great Depression for not just months - but years - you shouldn’t be surprised if it becomes a self-fulfilling prophecy.

It is my hope that our leaders will come to the understanding that without a housing recovery - there will be no economic recovery. It is the single largest asset that most people own - and when you allow that asset to become a liability, you’ve shaken the very foundation of our economy.

I don’t know if Sen. Isakson’s proposal will be enough to stabilize the housing market - but I believe it’s a good start.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Foreclosures, Real Estate News, Trends | 2 Comments »

The General Did Not See His Shadow This Morning

By MIKE MORRIS
The Atlanta Journal-Constitution

Call it groundhog gone high tech. Georgia’s resident weather prognosticating rodent, Gen. Beauregard Lee, on Monday sent text messages via Twitter as he prepared to exit his lair at the Yellow River Game Ranch and pronounce to the waiting crowd whether there would be six more weeks of winter.

“A crowd gathering outside my house,” Gen. Lee “twittered” at 6:45 a.m.

The groundhog was joined this year by the Gwinnett Braves’ mascot, “Chopper,” who the game ranch referred to as Beau’s “much more athletic cousin.”

As the time for his annual forecast drew closer, Beau twittered, “I have been eating more organically lately, but I think I smell grits!” A few minutes later, he added, “no, it’s hash browns.”

At 7:26, Beau posted on the social networking site that there were “lots of people yelling outside; must be time.”

Meanwhile, 560 miles to the north, Beau’s Yankee counterpart, Punxsutawney Phil took a moment to declare the Pittsburgh Steelers world champions, then saw his shadow and forecast six more weeks of winter.

Just moments after Phil’s forecast, Georgia’s groundhog emerged under cloudy skies, failed to see his shadow and promised that spring would be just around the corner.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Atlanta Area News, Just For Fun, Technology | 1 Comment »