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A question for Tom, Gigi, et al. : Approximately what percentage of buyers you are currently seeing, meet the following profile?
* Looking at houses with a listing price of between 550K and 600K
* Will spend up to 575K (so honestly we don't think the 600K listing top end is unrealistic, depending on the house itself of course)
* Pre-APPROVED (not just pre-qualified) for a 75K mortgage, the rest being cash
* Does NOT have to sell their own house first
* Can close entirely at the seller's convenience
Because based on our experiences over the past couple of months there seem to be a TON of buyers out there with qualifications as good as ours, or so the selling agents for the 3 homes we have lost out on getting over that time period have told our agent. In all 3 cases the homes were overpriced for the market (in the 590s) in both our opinion and our buyer agent's...and yet all 3 were on the market less than two weeks before being snapped up! This sure doesn't sound like the so-called "buyer's market" the media has been hyping. So we are wondering two things: (a) Are there really THAT MANY good buyers like us out there, and thus there still IS a lot of competition for homes? and (b) Is the mid-to-high 500K market actually a "hot" one on Long Island (in other words, still pretty much a seller's market in that price range) while the lower and upper ranges are slower?
Or have we just been really really unlucky in the houses we chose to make offers on?
I think you should say what area you're looking in.... 500K is not a lot for a house in a great neighborhood, but it is a fortune for a house in a crappy neighborhood.
Also, if I'm not mistaken, many people make their home purchases in July/August so as to be all set for the coming school year, end of summer/back to work, etc. and that could be why those houses were snatched up.
Another thing to consider is (and I'm not being negative here), are you sure your agent has your best interest in mind? Or are they schemeing/coniving? 3 houses being on the market for less than 2 weeks and then people just pop up with 500K in CASH to snap them up?? Sounds fishy to me.
I think you should say what area you're looking in.... 500K is not a lot for a house in a great neighborhood, but it is a fortune for a house in a crappy neighborhood.
Also, if I'm not mistaken, many people make their home purchases in July/August so as to be all set for the coming school year, end of summer/back to work, etc. and that could be why those houses were snatched up.
Another thing to consider is (and I'm not being negative here), are you sure your agent has your best interest in mind? Or are they schemeing/coniving? 3 houses being on the market for less than 2 weeks and then people just pop up with 500K in CASH to snap them up?? Sounds fishy to me.
Sounds veeeery 2005 to me too.....very strange indeed. Some things are selling on the North Shore Nassau where we have been looking (Port Wash, Great Neck etc), but most are not.
Could be bad luck or timing.....as above, you are looking in the height of the selling season (school time). I am betting that there are going to be fire sales from the "motivated sellers" by mid-Sept.
The areas we've been primarily looking in have been in Smithtown and Hauppauge, all in very nice residential neighborhoods with no "downsides".
We have absolutely no qualms about our buyer agent. She has been with one of the most well-respected firms in that area for over 35 years and we have known and used her both for buying and selling since 1998.
On the other hand we (and she) had some major qualms about one of the selling agents (the one where the agent's wife was listed as having brought the buyer that the sellers eventually chose over us).....
Losing out on 3 houses in a row is probably just bad luck. Despite yours and your buyer agents opinions these homes were obviously not overpriced, otherwise they would not have gone so quickly. Also, keep in mind that although your qualifications are excellent, many other people are excellent buyers, too, so I wouldn't put a great deal of weight on that. They probably beat you out simply on price. You didn't mention how much you offered.
Losing out on 3 houses in a row is probably just bad luck. Despite yours and your buyer agents opinions these homes were obviously not overpriced, otherwise they would not have gone so quickly. Also, keep in mind that although your qualifications are excellent, many other people are excellent buyers, too, so I wouldn't put a great deal of weight on that. They probably beat you out simply on price. You didn't mention how much you offered.
We're hoping it was just bad luck. As for price, in 2 of the 3 instances our offer was the SAME as the winning buyers (or so our agent was told by the seller's agent after it went to contract); in the third (most recent, meaning as of yesterday) the seller's final counteroffer was 580K (after we'd made our final offer of 575K) and our agent was told that the seller decided to take the other offer which had "met their counter" since the other buyer was "just as good" as we are regarding the other items (cash, preapproved, no house to sell, flexible closing date). Interestingly this seller has already moved out of state, so our agent wasn't able to present our offer in person, and when she asked for a conference call to be set up in order to present our offers that way, the listing agent refused. So we're all now curious to see whether the winning buyer here is either the listing agent or someone else in that agent's office.
Also, keep in mind that although your qualifications are excellent, many other people are excellent buyers, too, so I wouldn't put a great deal of weight on that.
Actually that was my original question: Are there indeed MANY other excellent buyers in this price range right now? Given the economy in general (at least as portrayed by the media!) one would think not... but as always, Long Island is an anomaly as compared to the rest of the country.
We did ask our agent whether we should just go all-cash, even though for income tax purposes it benefits us to have a 75K mortgage for the next five years; we COULD go all-cash if we HAD to, but it just works better for us to do it this way for now. We will be paying down/paying off the mortgage during the first five years, essentially it is ONLY because the interest writeoff will help offset some extra income we'll be getting from 2009-2013. But she said that there is no difference between being 100% cash and 87% cash as a negotiating factor when the 13% financing is already in place and approved.
So Tom (and other realtors), are you saying that in the mid-to-high 500s pricerange you are seeing at least 50% of buyers with similar excellent qualifications as ours? Meaning they have 80% to 100% cash? Seriously? Or perhaps that you're seeing at least 75% of such buyers? Or MORE than 75%?? ("Many" is too vague a term, IMO... give me percentages! ) I have a hard time visualizing that 1/2 to 3/4 of the buyers out there are that solid, to be honest. Or are sellers now simply deciding solely on dollar amount and neither they or their agent care very much anymore about which buyer is more 'solid'? have things changed THAT much? You'd think that with the current mortgage mess, a solid all-cash or mostly-cash/already preapproved buyer would have a clear edge!)
Last edited by totallyfrazzled; 08-09-2008 at 11:16 AM..
Actually, an "all cash" offer is usually not the deciding factor. Price is. The fact is, if someone is highly qualified to get a mortgage they are considered just as good.
If you really think this is making a difference try making your offer with "no mortgage contingency". This is just like an all cash offer, in that it does not allow you an out if you cannot get the mortgage, even though you still intend to get one.
One thing that you said really bothered me. You said that the listing agent refused to let your agent present the offer on a conference call. This is clearly not allowed by MLS rules. Your agent should have pushed harder. Our rules state that unless the seller in a hand written letter states that offers are only to be presented through the listing agent, the selling agent has the right to present the offer in person (or, in this case, a conference call). Your agent should have demanded that she be allowed to do this and should have contacted the zone chairperson if she was refused.
Actually, an "all cash" offer is usually not the deciding factor. Price is. The fact is, if someone is highly qualified to get a mortgage they are considered just as good.
If you really think this is making a difference try making your offer with "no mortgage contingency". This is just like an all cash offer, in that it does not allow you an out if you cannot get the mortgage, even though you still intend to get one.
One thing that you said really bothered me. You said that the listing agent refused to let your agent present the offer on a conference call. This is clearly not allowed by MLS rules. Your agent should have pushed harder. Our rules state that unless the seller in a hand written letter states that offers are only to be presented through the listing agent, the selling agent has the right to present the offer in person (or, in this case, a conference call). Your agent should have demanded that she be allowed to do this and should have contacted the zone chairperson if she was refused.
Actually she did push for it, and the selling agent kept saying that it was "just too inconvenient, because the wife works" (ever hear of cell phones) and "because of the time difference" (ONE HOUR!). After 2 or 3 requests the selling agent stopped returning phone calls, even to her cell, for most of the day. By the time our agent finally got through to her, at almost 7:30 pm (!!!) the sellers had "decided to accept the other offer". So we lost out. Again. Our agent was livid but what could we do? The selling agent had an accepted offer in writing via fax. The most she would do was to say they would accept our offer only as a backup.
You'd be amazed at how many agents disregard the MLS rules. A new listing came on the market on Wednesday and when we heard the news about our latest offer, our agent called the listing agent to ask for a showing this weekend. Listing agent said "The owners are away on vacation". Lockbox? "No" Listing agent has a key? "No, by appointment only". Our agent asked when the sellers will be coming back; listing agent said she "has no idea". Not even an approximate date? "No, no idea, they will be back whenever they get back." (!!!) Our agent said that according to MLS rules, if a house cannot be shown at all within the first 10 days after it's listed, the listing has to be taken off and relisted when it CAN be shown. And to that the listing agent said "Oh, I don't think so." So our agent is going to keep calling until the 10 days are up and if the listing agent keeps saying it can't be shown yet, she (our agent) is going to file a complaint. It'll be REALLY interesting if that house ends up with an accepted offer before the listing agent "allows" us to see it!! The way things have been going lately it wouldn't surprise us at all.
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So our agent is going to keep calling until the 10 days are up and if the listing agent keeps saying it can't be shown yet, she (our agent) is going to file a complaint. It'll be REALLY interesting if that house ends up with an accepted offer before the listing agent "allows" us to see it!! The way things have been going lately it wouldn't surprise us at all. 
