Housing Survey: Fewer "low ball" Offers in 2012

by 23 Apr 2012
(Washington Post) -- It’s not something that economists routinely track, but it provides a rough sense of what’s happening in local real estate markets. Call it the low-ball index. A year ago, according to researchers at the National Association of Realtors, one out of 10 members surveyed in a monthly poll complained about low-ball offers on houses listed for sale. In the latest survey — conducted in March among 4,500 agents and brokers across the country but not yet released — there were hardly any. Instead, the focus of volunteered comments has shifted to declining inventory levels — fewer houses available to sell — and multiple offers on well-priced listings. A low-ball offer typically involves a contract submitted to a seller where the price proposed by the purchaser is 25 percent or more below list. Low-balls increase sharply when there’s a glut of properties available, asking prices are out of sync with local economic realities and values are depressed or uncertain. Buyers figure: Hey, why not? Maybe I’ll get lucky. Based on the latest survey results, that sort of strategy is not a winning move in many communities this spring. In fact, in local markets where inventories are tight and competition for homes rising, realty agents say that buyers looking to steal houses by low-balling their offers are ending up at the back of the line, their contracts either rejected out of hand or countered close to the original asking price. In high-demand, high-cost markets that have rebounded from recession slumps, sellers are now firmly in control; they pay scant attention to low-ballers. Jayne Esposito, an agent with Coldwell Banker Residential Brokerage in Los Gatos, Calif., says that multiple offers are “the rule, not the exception,” in her area, and many transactions end up with final contract prices higher than the listing. “Sure, I’ve had a few buyers try to low-ball, and they wouldn’t listen,” she said in an interview, “but that didn’t work out well for them.” Similar trends are underway in more moderately priced markets. Read full story from The Washington Post  



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