Kevin Raisch

My OFFERS are not being accepted, WHY?

I am sure you or one of your colleagues has made that statement at least once in recent months while they are searching for a home. My colleagues and I as a Realtor want to assure you that we too are disappointed as well when your offer is not one of the winners.

Several issues may be in play to cause your offer not to be the one. If you are writing an offer on a "Bank Owned" property the asset manager in charge of the property is looking for the best offer written. This means the offer needs to net the bank the most money after all of the expenses related to the property are met. Needs to have an agent and lender that can get the transaction closed on time.

Here is where you meet the multiple offer situation, banks price the property at the appraised and BPO price so anything less than the listed price will not even be considered. Most of the time the pricing on the house is for an "as-is" which is sometimes slightly below market value, the perceived bargain. The Buyer frenzy begins resulting in 30 offers on a single property.

To net the most money for the bank cash offers or large down payments win most of the time, the reason; no appraisal necessary because no financing, no credit check or history needed again no financing involved and most importantly shorter time frame to close. This is the ideal offer for an asset manager seeking to get this asset off his books.

If your offer asks for closing costs, this is a deduction away from the net sum of funds the bank will receive upon sale.

Is you offer price too high over the list price? Some offers exceed the list price so high that even an appraisal cannot meet the offer price. This type of offer slows the system down for the asset manager by having to renegotiate a new price when appraisal comes in low. This delay increases carrying costs for the asset for the bank and diminishes the net return. Asset managers in more recent cases have asked the Buyer to make up the difference from the appraisal and the offer price.

The most outward reason for the offer not to be accepted is the price range. Most Buyers are looking in the $300,000 - $400,000 price range and the inventory in this range is limited. When a property is listed in this range most buyers are lining up to go and look at the home.

So what does all this mean, be patient and be willing to keep on trying no matter what the outcome. There is a home out there for you and it may take some time to find it but you will.

Feds Cute the rate to near zero and mortgage rates drop again. The 30 year fixed mortgage rate has fallen from 6.5 in October to 5.19 today. This with the declining prices makes for a perfect situation for Buyers to get off the fence and get back in the market.

Refer to CNN MOney article from today;

http://money.cnn.com/2008/12/18/real_estate/Mortgage_rates/index.htm?postversion=2008121811

New York Times reports home buying is Ideal article from12/06; http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html?_r=1&scp=1&sq=It%20maybe%20time%20to%20think%20about%20buying%20a%20home&st=cse