Different Buyer's Market Now

I haven't taken a buyer out in months. I have been concentrating on Short Sale Listings. But, I had an open house recently in order to attract some buyers for one of my listings. Suddenly, I acquired two buyers who didn't even know if they qualified for a loan. They both wanted to see homes that included a pool, views, and acreage, for no more than $100,000.

Now....it all came back to me. I was so busy early last year running around with buyers, getting them pre-approved, writing multiple offers until midnight, searching the MLS, calling listing agents begging for information so I could write a winning offer. No wonder I got burnt out.

But this time it was different. There are almost no REOs for sale; mostly Short Sales. And with those Short Sales the listing agents actually called me back with a variety of stories such as "the buyer just walked", "the buyer didn't qualify" please submit an offer. Which brings me back to my Open House. For some reason, I wasn't getting any interest in this listing that would have sold in 5 hours last year. That feeding frenzy seems to be gone. Maybe buyers are still avoiding Short Sales, maybe they too are burnt out putting in offer after offer only to get their credit ruined after so many "cross-qualifying" credit inquires.

It could be just a weird month in Southern California, a fluke, but anyway I am putting in two offers tomorrow. One on a STANDARD SALE....unheard of in this area. The other on a Short Sale that has no other offers. Maybe I'll be doing more Open Houses.

I definitely think buyers are still avoiding short sales. Although the closing rate is much improved, and the process is getting better, the buyers I have been working with usually want to avoid them. Unfortunately, here in Northern California it's similar to where you are -- few REOs (and they get so many offers, including many cash offers, that my buyers looking for a home never have a chance) and not too many standard sales. The standard sales aren't bargains, either, so then my buyers who think that they should be able to get a steal since they think the market is in the toilet aren't interested or want to make such a low-ball offer that it's a waste of everyone's time. I have been working on educating my buyers about short sales, what it really means to get involved, and why they shouldn't just avoid them wholesale.

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Comments

Sam Shueh March 17, 2010 at 4:39am

Many of the standard sales here are investor purchased properties often at 30-50% mark-up. The banks and buyers as well as realtors all wonder if the properties can be acquired for that much mark-up. The underwriters are really looking at these homes to ascertain the mark-up is legit. It is not the buyers who don't like to purchase a short sale properties. The time it takes is longer than people have patience for. Often the ss homes ended up at Sheriff sale months after the offers are submitted.
Megan Zavieh March 8, 2010 at 5:52pm

I definitely think buyers are still avoiding short sales. Although the closing rate is much improved, and the process is getting better, the buyers I have been working with usually want to avoid them. Unfortunately, here in Northern California it's similar to where you are -- few REOs (and they get so many offers, including many cash offers, that my buyers looking for a home never have a chance) and not too many standard sales. The standard sales aren't bargains, either, so then my buyers who think that they should be able to get a steal since they think the market is in the toilet aren't interested or want to make such a low-ball offer that it's a waste of everyone's time. I have been working on educating my buyers about short sales, what it really means to get involved, and why they shouldn't just avoid them wholesale.

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