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| Member |
Put my house on the market few weeks ago on a Friday. Had 7 offers, all above asking by Sunday at 5PM. Accepted one for $75,000 over asking with no appraisal but don't close until next month so who knows. | |||
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| Member |
Thanks for clarifying that. I always thought that you could not "collect" bids but rather had to entertain each bid individually and respond within a specified time period. (24-48 hours) I am sure there are ways Realtors can manipulate this to their clients advantage, however. | |||
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| Get my pies outta the oven!  |
Disagree 100% A crash is coming and an bad one at that. This all is absolutely unsustainable. We are in a 2021 version of tulips in Holland circa 1630's. | |||
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I Deal In Lead |
And yet that's exactly what happened when I sold my last house in 2005. Got around a dozen bids, each one accompanied by a personal letter to me allegedly written by the bidder telling me why I should sell my house to them and not the others who had bid. I got $75K more than my asking price and that was 16 years ago. OTOH, my bid on the house I'm in now which was a few days after getting all the bids on my old house, I bid $5K more than the asking price and got the house. | |||
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| Member |
I love you guys but sometimes I wonder why. Lol. This is no tulip scenario. At the end of this someone still owns an item that has worth. A lot of worth. Tulips? Not even close to a valid analogy. It also doesn’t have the common earmarks of a bubble. These homes have value even when they correct. They also aren’t being bought on the backs of bad loans. By selling over appraised value, which they are, guarantees that buyers are bringing cash, lots of cash to closing. Of course there will be a correction. Mortgage rates returning to a normal rate alone will cause a correction. This market will cool and people will find themselves with a home that isn’t as valuable as when they bought it. It might also trigger some PMI issues for homeowners, but there is no reason to think the market will crash. Maybe it’s semantics but correction and crash are quite a bit different. Ask people who owned property in Detroit if they would have rather had a market correction. | |||
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| Get my pies outta the oven! |
How does your house have “value” when you owe $600,000 and it’s now worth $250,000? | |||
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The Unmanned Writer |
It’s not that the house is “worth” $250K, it’s that this is what others are willing to pay for it today (like when a neighborhood becomes overrun by thugs and drug dealers) or the more scary scenario, that is all people can afford to pay and you need to sell for some reason. Life moves pretty fast. If you don't stop and look around once in a while, you could miss it. "If dogs don't go to Heaven, I want to go where they go" Will Rogers | |||
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paradox in a box |
I've seen this line of thought in previous threads. It's really kind of silly. It's well known that this is how the housing market works. What if it's a bad market and the bids are below asking. Does the seller need to wait until they get asking price? I mean you aren't going have the supermarket give you milk for less than the price because no one else bid on it for higher. There really is no other way to sell houses. It's not just a price that has to be met. There are tons of contingencies. How's it financed, what if it doesn't appraise, how will inspection issues be handled... You can hate the game but that's how it's always been. I don't really see a scenario with a set price that would work in real estate.
I'm assuming this is a cash deal and they have shown proof of funds? If not then something sounds off. An appraisal would be required by any bank giving a mortgage. Then they would need cash to cover any appraisal shortfall. Regarding posts about appraisals, it does seem true that most houses are appraising. But it's been tricky. The realtors have to speak with the appraiser more often now and justify the appraisal with comps. There have been times when appraisal wasn't met. A good realtor will know this and steer you to an offer with cash to cover. These go to eleven. | |||
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| Member |
There is just some stupid running through this thread. A house that sold for 600k dropping to 250k qualifies as a crash. There isn’t going to be a crash. That’s the point. You keep saying crash many of us keep disagreeing and saying correction. As for value. The last crash was fueled by bad paper. Houses that had no intention of being used for any purpose other than flipping. Since this is the thread of bad analogies, the last market crash was GameStop trading. Everybody Hopi g to buy and then sell at a quick profit. All fueled by a system that would loan money to ANYBODY. These houses are being bought with good loans backed by real cash money. People are not flipping houses. They are moving into them. You ever hear the trope about the cheapest 5hing you will ever buy? It’s not really true but it’s interesting because it’s is true in a very significant way. Name one thing that you buy on a regular basis that will cost you the exact same amount in 3 decades. The answer is nothing other than your mortgage. How do you think a plumber in California affords a 1.6 million dollar house? The answer is he bought it 30 years ago. His mortgage, principal and interest, haven’t changed a penny in 30 years. Nothing else you buy works like that. So where is the value? You live in the house paying the same mortgage as last month and the 359 months before that and eventually you have more value than you did to start. You have to live somewhere so why not in this house that is temporarily undervalued? Even in your ridiculous example if you can afford your mortgage you stay and pay. Why? Because if you walk away from your house you still have to go live somewhere. Your rent might as well be your mortgage. Eventually no matter how undervalued your house is or if it stays that way (historically it won’t) you eventually get on the other side. The doom and gloom isn’t supported by facts or history. Corrections you live through, crashes you throw yourself off buildings. Big difference. | |||
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| I Deal In Lead |
Years ago, the houses in my neighborhood were selling for around $250K. A Sheriff's Department Deputy bought one 2 houses from me for that price. Around a year later, the houses were selling for $175K. My neighbor who lived between me and the Deputy said he felt sorry for the guy because he lost money. I told him the Deputy hasn't lost money unless he sells. A number of years later the Deputy was still there and the houses were selling for $500K. | |||
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safe & sound |
It's not silly at all. A sale is listing something at a price, possibly negotiating, and selling it. An auction is having a starting dollar amount, escalating bids, and then selling it to the highest bidder. This is reality. This (at least in my state) is the law. I have no problem with people who sell real estate as a sale. I also have no problem with people who sell real estate at auction. But let's not cross lines. Choose one or the other.
That's how a sale works. You offer an item for a price, sometimes people attempt to negotiate a lower price, and when the seller and buyer mutually agree a transaction occurs. How an auction works is that you start the bidding at a low price, and then that price escalates with the item selling to the highest bidder.
The supermarket, by law, must sell you the milk at the advertised price (or less). Otherwise it's bait and switch. Similar to what's going on in that example with the real estate. To offer something for sale, with no intent to sell it at that price, is wrong.
Sure there is. Two ways. The first being a sale, the second being an auction. Choose one.
That has nothing to do with the difference between a sale and an auction.
I don't hate the game. I just think that Realtors shouldn't get to play both sides of the fence. You want to auction homes? Great. Get your auctioneer's license. You want to sell homes? Great. Get your real estate license. Want to do both? Great. Get both licenses. Then when you sit down with your clients, choose. Do you want to list your house for sale, or sell it at auction? If you list a property at $100,000, and a guy comes along and offers you $100,000 (no inspections, no contingencies, cash in hand), you should be obligated to take it. No different than the classifieds here on the forum. If you list a property at $100,000, with no intention to actually sell it for $100,000, and hoping that you'll get $150,000 because you have buyers running the price up, then that's an auction and should be treated as such. I know plenty of auctioneers with real estate licensing. How many realtors do you know with an auctioneers license? | |||
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Member |
I would contend that every single real estate transaction is an auction period. The listing price is just a reserve. Every offer has it's own unique contingencies that makes it unique, be it less than asking, asking, or more than asking. Two offers at the same price will often still have different terms that make them unique, and the seller picks the most favorable to their situation. "The people hate the lizards and the lizards rule the people." "Odd," said Arthur, "I thought you said it was a democracy." "I did," said Ford, "it is." "So," said Arthur, hoping he wasn't sounding ridiculously obtuse, "why don't the people get rid of the lizards?" "It honestly doesn't occur to them. They've all got the vote, so they all pretty much assume that the government they've voted in more or less approximates the government they want." "You mean they actually vote for the lizards." "Oh yes," said Ford with a shrug, "of course." "But," said Arthur, going for the big one again, "why?" "Because if they didn't vote for a lizard, then the wrong lizard might get in." | |||
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| paradox in a box |
I was about to write a long reply to A1 but this sums it up pretty concisely. A1 knows this and that's why I think the argument is silly. Real estate transactions are basically auctions, sure. But he seems angry that realtors have a different type of license with rules that are specific to real estate, not auctions. I doubt an auctioneer license covers all the stuff in a real estate license. It is what it is, no reason to be angry over what it's called. These go to eleven. | |||
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| safe & sound |
Then every single Realtor should be a licensed auctioneer period.  My family is in the real estate business. I have had my license active twice. I would contend that special interest groups have made real estate transactions way more complicated than they need to be in order to protect their income, but that's besides the point. Each milk transaction is also unique. Maybe one buyers wants it today, and another buyer a month from now. Maybe one buyer is also buying $1,000 worth of other items, while the other is simply there for the milk. One buyer may simply toss it in the cart while the other wishes to read the label and check the expiration date prior to purchase. In either event the store sells them both the milk for the same advertised priced because that is what they had it listed for sale at. You want more money for these contingencies? Great. Put it in your listing. There are only so many. But if you have a buyer with cash and zero contingencies you should be obligated to sell for the list price.....unless you're running an auction. I have a similar problem with health care. | |||
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| Member |
Since everyone is talking about being "real" rather than stupid, consider this: If anyone on this Forum could predict crashes and corrections they would be doing something else for a living. | |||
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| paradox in a box |
A1: so you’d rather real estate agents get an auctioneer license instead of a real estate license? I have no idea what is needed for an auctioneer license but I’m betting it wouldn’t satisfy me as a home owner to hire an auctioneer that doesn’t understand real estate. The point being this is all semantics. You’re upset about a title more than anything else. Maybe I’ll suggest my fiancé put “or best offer” on her listings.  . Also consider who would be able to buy houses for list, cash, no contingency? Investors maybe. Most people would miss out and probably have to deal with an investors auction. Same difference just more cost. These go to eleven. | |||
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| safe & sound |
Only if they are engaged in auctioning real estate. They should be allowed to sell real estate with their current license. I'm sure it varies from state to state, but there are laws governing how auctions are conducted which the current crop of non licensed real estate auctioneers seem to be flouting.
It doesn't satisfy me as a consumer than there are unlicensed auctioneers auctioning real estate under the guise of a normal sale.
No, I'm not upset at all. I simply believe that people should do what they say. If you say you're selling your home, sell it. If you say you're auctioning your home, auction it. Don't tell me it's for sale when you're actually having an auction. It's misleading.
Great! So you list a home for $100,000, an investor comes along with all cash and no contingencies, and you refuse to sell it. Why? (Trick question....it's because you're not really offering your house for sale, but you're auctioning it instead). Can you name any other purchases that are conducted in this fashion? | |||
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| paradox in a box |
No trick question. If that’s how it worked then no one but investors would get houses and we’d all be paying through the nose. My point is, yeah, it’s an auction. You know it. I know it. The buyer knows it. The seller knows it. That’s real estate. No reason to expect different. Only other example is anything for sale that says “or best offer”. Actually reminds me of an item on Facebook yard sale a while ago. First person that offered asking didn’t get it because someone offered more. She was pissed. But the post said “or best offer”. So there was no recourse. Of course “OBO” is usually used to accept a lower offer. But this turned out unexpectedly. These go to eleven. | |||
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| safe & sound |
When somebody advertises an item for sale for a price, I expect to be able to purchase it for that price or less through negotiation. When somebody advertises an item for auction, I expect to bid on that item, with the highest bidder getting the item. Don't list something for sale without having the intention of selling it for that price. If there was no difference, then I wouldn't see separate real estate listings and real estate auctions. There clearly is a difference. I'm not talking about those who do intend to sell it for a price and end up getting a few buyers fighting over it. I'm specifically talking about those who offer something for a price that they fully intend not to accept, with the expectation that it will start a fight. I keep hearing Realtors talk about "bidding wars", but "bidding" occurs at "auctions" and most Realtors are not "licensed auctioneers". Something should be done about that in order to protect consumers from predatory practices. This whole *wink* *nudge* crap is just that. Crap. Be honest and upfront. It's either for sale, or for auction. Can't be both. | |||
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| The Unmanned Writer |
Cars. Case in point, you and I walk into a Dodge dealership at the same time to buy one of the last manual Hellcat Challengers. They have it advertised at $90k and I tell them I'll take it. You then offer $100k. Dealer will look at me for a new offer and if I don't give one, will tell me the vehicle is no longer available, sorry for the inconvenience.  Life moves pretty fast. If you don't stop and look around once in a while, you could miss it. "If dogs don't go to Heaven, I want to go where they go" Will Rogers | |||
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