Vanishing Offers Are the Newest Trend in Real Estate Market
August 27th, 2008 categories: Central Connecticut News & Information, Home Sellers, Real Estate Market
Two years ago, a home buyer would submit an offer, a home seller would likely counter and more than likely, both parties would come to an agreement - or the seller would just flatly reject the offer knowing that another offer was around the corner. The buyer also knew this so typically they were willing to negotiate.
Today, I’m seeing a very different trend - vanishing offers.
Vanishing offers look like this.
Scenario A: A buyer puts in a written offer and submits it to the seller. The seller counters but the buyer literally disappears, either due to an issue with financing, changing his/her mind or they are not willing to do any negotiating whatsoever.
Scenario B: A buyer’s agent calls the seller’s agent to float a verbal offer - would your seller consider an offer of X, knowing that it’s significantly below the asking price? The seller may even come down to X but by then, the buyer has moved on, changed his/her mind or the financing that looked good is no longer in place.
Vanishing offers are a reality in this marketplace.
Buyers are out there, looking and putting in offers but are having a difficult time committing to one home.
There are a few reasons for this. First, buyers are justified in thinking that there is another house, a better house for less money just around the corner and those sellers need to sell fast. Secondly, financing is disappearing for many people or requirements are changing making it more difficult for buyers to qualify. Lastly, there is no external pressure to buy such as media, friends and family pressure to get buyers motivated.
If you are selling a home in this marketplace, be aware that this is happening to most sellers. There isn’t much you can do about it except realize that you don’t have a sale until a contract has been written, signed by both parties and all contingencies have been met.
For Related Posts:
The Anatomy of Failed Low Ball Offer
Home Buying 101 - Step 9: Make An Offer Part 1
Home Buying 101 - Step 9: Make An Offer Part 2
Do you dig real estate news, tips and advice? Sniffing around for pet-related information in Connecticut? Get Unleashed - the blog that’s helping to find homes for people and pets.
Well, the disappearing offers are becoming more and more common just because buyers have more to pick from. Of course, financing is also a main issue, but the large inventory these days is a big player and being a realtor in Toronto, where the inventory is sky high, I often warn my seller clients about this, so they don`t get too discouraged and panic about the prices and so on.
The only thing we can do is adjust and do whatever we can to prevail.
The financing is the issue. Think about the process- a buyer gets interested and goes to a real estate agent, they see homes, find one they like, and start the process. They might put down a few bucks- but then, they have to see a mortgage agent. And that’s when newly clamped-down lending standards smack the deal down. The buyer has now had a reality check concerning their credit, also sprinkle with a taste of the contingency of selling their existing home. It’s just another stage is the progression of the downturn.
So the adjustment becomes the price, which goes down- but only to a point where the seller can lose so much before being too far upside-down. And the pendulum swings- but not just back to the middle. Think much lower…
Most of it is financing - but much of it also is that buyers have so very many options for housing and there is nothing pushing them to buy.