Austin Market Cooling Down - Lowest home sales (Dallas, San Antonio: apartments, foreclosures)

[FromCalitoSteinerRanch]

Originally Posted by futurecitizen

Can anyone speak to what the difference is between the list sales and the prichase prices? We are hoping to relocate there and want to get a sense of bargaining power...

Thanks.

When you say "there" do you mean Steiner Ranch, or Austin in general? It varies based on the old addage supply vs. demand. In some areas, you may start the process by offering 15-20% less than list, but in other areas, you may have to offer above list to get a serious response in a multiple offer scenario.

[austin-steve]

In some areas, you may start the process by offering 15-20% less than list,

That's not a good idea. A general assumption like that is not valid. A properly priced home in an area in demand will sell quickly for full price or more. More than half the deals I've written this year have been multiple offers. This is in South/SW Austin.

On the homes we list, an offer 15% to 20% below list price won't ever receive a counter-offer. It would be viewed as a joke and receive a polite "no thanks". As an ill-informed buyer, you'd be spinning your wheels and wasting your time.

The best way to buy a home is to get an agent who really knows the area in which you want to buy. They can provide a CMA and help you make sure you make an offer based on current market conditions. Ask your Buyer Agent about the "Hot Market" factor in your area because that will tell you what the current level of supply/demand is and will dictate your offer price.

For example, in Circle C right now, there are 44 Active and 42 Pending listings. This is a strong Seller's Market. The average days on market for the Actives is 35. The average days for Pendings is 36. Lowball offers will be dead on arrival in this type of market.

In Steiner, there are 125 Actives and 39 Pending Listings. The average days for the Actives is 64. The average days on market for the Pendings is 56. This is NOT a hot market as there is way more supply than the current demand will absorb. Lowball offers might have a chance in Steiner, but you might have to make several before you find a Seller willing to deal. Many will simply hold on and not sell, or will rent the property instead of taking a lowball.

If you come into Austin, or any town for that matter, you can't simply use a generalized assumption about the market upon which to base a buying strategy. You have to become educated about the particular market in the specific area in which you want to purchase and make sure you either know how to read a market yourself or are being represented by an agent who does.
Steve

[GreenPlastic]

We just sold our house in one day to the first person to take a look. This is after increasing our asking price to beyond what we expected to be able to get. At least in central and SW Austin, the market is very strong.

[gigi927]

In the MLS area RN (which encompasses River Place, Steiner and several other areas) through fall of 2006 most homes sold at 96-98% of list price. That dropped through the winter; we'll see where it comes back up. We always say anything at 10% or more below list price is a lowball. You can try it, but don't hold your breath unless there's a dire situation with the seller.

[FromCalitoSteinerRanch]

Originally Posted by austin-steve

That's not a good idea. A general assumption like that is not valid. A properly priced home in an area in demand will sell quickly for full price or more.

I stand corrected, and duly noted.

[Trainwreck20]

Depends on the list, of course....it is all over the board. I highly recommend that you get a real estate agent to help you out. One house down our street sold for several percent over list during a bidding war, of sorts, and the one that is on the market across the street is overpriced (imho) and I think will sell for ~5% under it's list.... I am curious to see how it comes out. I think the list price will be changed, though, so maybe it will sell for the 'new' list price.

[new2aus]

In most cases doesn't it really come down to the individual house? We looked very seriously for 2+ months for a house in Steiner. I agree that a lot sit on the market, but I think it is really more about the product than the demand in the area.

We made an offer on our home in Steiner the 2nd day on the market. They got 2 other offers that day and we had to bite the bullet and go above list to get it. Hard to swallow, but given what we had seen (and continue to see) it was worth it to us.

Another house on our street just came on 2 weeks ago and had a contract in 5 days, so if they are desireable I think they move fast. The new homes that sit seem to be the ones on 50 ft. lots. They just don't seem to be the type of house people are looking for out here.

[austin-steve]

Another house on our street just came on 2 weeks ago and had a contract in 5 days, so if they are desireable I think they move fast. The new homes that sit seem to be the ones on 50 ft. lots. They just don't seem to be the type of house people are looking for out here.

It is interesting, being in the business, to see which homes move fast and which don't. Often, two properties can be very similar "on paper", but vastly different on walk-through due to pricing, staging, floorplan, condition and other factors.

The other thing I see often is agents listing a home in an area in which they are not familiar will often price it way too low or too high. We just sold one $10K over list price to our buyers, but I believe they are still getting it slightly below market value. There were 5 offers the first day. I think it could have been priced $15K higher and still sold fairly quickly, but the listing agent doesn't work South Austin and isn't familiar with the hot pockets and the nuances of the demand in the different neighborhoods.

Steve

[Austin97]

Originally Posted by austin-steve

That's not a good idea. A general assumption like that is not valid. A properly priced home in an area in demand will sell quickly for full price or more. More than half the deals I've written this year have been multiple offers. This is in South/SW Austin.

On the homes we list, an offer 15% to 20% below list price won't ever receive a counter-offer. It would be viewed as a joke and receive a polite "no thanks". As an ill-informed buyer, you'd be spinning your wheels and wasting your time.

I would hope that the corresponding agent would take every offer seriously as a chance to negotiate. Why wouldnt you counter offer?

I am closing on a lake property tomorrow where we offered 11% off what the seller was asking and it was accepted.

[austin-steve]

I would hope that the corresponding agent would take every offer seriously as a chance to negotiate. Why wouldnt you counter offer?

That's a good question - how should a seller handle low-ball offers?

Real Estate Agents disagree on the best negotiating strategy for responding to lowball offers. There are two general camps of thought.

One philosophy says that the amount of an initial offer doesn’t matter, and that the seller should always respond to any offer with a counter-offer of the lowest ‘bottom dollar’ price she is willing to accept for the property. I not only disagree with this strategy, but believe it is fails to protect the seller’s best interests.

To put it harshly, it is incompetent and negligent, in my opinion, for an agent to advise a seller to disclose her bottom line price based upon nothing more than the existence of a lowball offer. Nevertheless, I’ve heard many veteran agents claim that this is the best response to any offer - that “any offer is a good offer and deserving of a counter-offer”.

Another approach, the one I follow both as a listing agent and as a seller of my own properties, has always been to respond to lowball offers with a cordial “thanks, I appreciate the offer - really I do, but we’ll have to pass on it at this time”. This strategy assumes that the offer is so low that you would not consider selling at or near the offer price under any circumstance, and that you are not selling under duress or time constraints.

Declining the lowball offer is the same as counter-offering at full price, but puts the pressure on the buyer to decide if he is serious enough to adjust his offer price upward instead of forcing you to decide whether you are desperate enough to adjust your asking price downward.

Often, the buyer’s agent will respond with something like “well, can you give me an idea of whether we are even in the ball park?” or “help me out here, if we come back at $X, do you think the seller will counter?”

To these questions I will say to the other agent that the seller and I are confused by the offer and can’t ascertain how to respond, because the offer price is so far below the market value of the property we don’t know if the buyer is serious or not. I’ll ask whether the offer was based on a market analysis that they can provide. I’ll also ask if the buyer has some other rationale that I can provide my seller to help her understand how the offer price was determined.

It’s important to not be offended by low offers, but also not to be suckered into effectively dropping your asking price just because somebody wants to start negotiating at a below-market price level.

Steve