Go Ahead & Make a Reasonable, Market Value Offer. Most Buyer’s Won’t

Home buyers often pass up the opportunity to make an offer, even a reasonable statistic based offer, on an overpriced home.  Sellers just don’t understand that often buyers don’t want to insult them, and start the negotiations off on the wrong foot.  Seller erroneously thinks that he can “just try”, or because he “needs to get” a certain dollar amount for the home, that an interested buyer can just make an offer, and then he will consider coming down.  That line of thought is terribly flawed. The majority of buyers will not make an offer. So the home sits.

Listing agents can give bad advice. I’m afraid it happens more frequently than it should.  The seller may be-uninformed that his asking price is out of line with market value.  The seller may simply be using the “wishful thinking” strategy of marketing.  Just hoping that someone will think the price is pretty good and makes an offer.  As a buyer considering an overpriced listing, don’t automatically assume that both agent and seller are aware that the home is overpriced. They may both need educated.

Buyers viewing a nice home, that is clearly overpriced, will often assume that a seller has turned down reasonable offers.  Generally, there are no offers for the seller to consider.

Overpriced Listings Don’t Advertise “I’m Overpriced”. So How Do You Find an Overpriced Home?

Ask your agent to research the Multiple Listing Service for homes in your price range, and areas of town that you would like to live.  Have your agent also look for homes in your areas of interest that are priced a bit above your top price range.  Depending on your approved loan amount, that may be $5000 or $50,000 over your comfort zone.  Your agent should then be able to quickly find the homes that have been on the market for 4, 5, 6 months or more.  Discuss with your agent what would be “reasonable” days on market for your area and price range, and then look for homes that have exceeded the norm.

If your agent is experienced and knows her market well, she should be able to help you understand which of these homes are clearly overpriced, and may be worth a visit.

Will a Seller Lower His Price?

Quite Possibly!!  It happens all the time.  A hot seller’s market is one thing, but in this current environment, when buyers clearly have the upper hand, sellers are slowly beginning to understand that last year’s price is not today’s price.  Too many seller’s are suffering from “not my house” syndrome, where they think that their home is immune from the current home selling downturn.  When their home is neither shown, nor sells, they slowly learn that not just the neighbors have taken an equity loss, but so have they.

Not every overpriced home will sell, even when a reasonable offer is presented.  But do know that when a seller is asking an unreasonable price, it’s very possible that your offer will be the one to finally help them understand the true value of their home.  If that same seller has turned down previous offers, it’s just  a matter of time before the seller “gets it”, the light bulb goes on, and he understands that if he is going to sell,  he better strongly consider this offer.

Let’s Not Be Unreasonable

Let’s be sure that we understand the difference between finding the good deal in an overpriced home, from a pool of overpriced listings, and making a low-ball offer.  If you make a low-ball offer on a home whose sellers have fairly and accurately reduced their asking price to reflect the current selling environment, be prepared to either jump up in your price, or be prepared to walk away.  The low-ball offer will probably not result in you owning the home at the low-ball price. Those offers, quite often, turn into a waste of time and energy for all parties involved.

No, this is a different approach to finding your dream home, from available inventory, that you may have not previously considered.

Enjoy your new home search, and I hope you found this interesting!

More Cincinnati real estate information can be found at RealCincy.com