Real Estate Not Worth Fighting Over
In the last few years the Bonita Springs real estate market has had some major changes and adjustments. The short sale, pre-foreclosure and foreclosure properties alone have hit the market in massive volume upsetting the system.
Everyone has heard the belly aching and complaining that real estate agents, me included, have shared about trying to deal with banks and their properties. A pricing phenomenon that you need to know about has hit the Southwest Florida area. Not, just the “price for the proven value so it can appraise” phenomenon but the “price it so people will fight like Rocky Balboa for it” phenomenon.
I guess when all else fails, start a fire and someone will notice you and that’s what some sellers and their agents have done. They’ve listed their properties at remarkably low prices, so low it looks like a fire sale or even a give away. To begin with, I don’t have an issue with the agents or sellers that do this. Personally, it’s just not my cup of tea and I don’t care to participate. The listing agents involved are working for a seller who is likely frustrated, may be in danger of losing their home and they’re probably financially tapped. The sellers may be willing to try anything to get their home sold and the agents are just trying to help them.
One of the first times I saw one of these ultra low priced listings in my area was last spring. A home came on the market in South Lee County at a price about half the value of the recent closed sales. The home was in a production builder community so there weren’t many improvements or upgrades available to reduce the value by fifty percent. This Bonita Springs home was priced artificially low to draw attention and it worked.
Because I’ve sold a few listings in this area, buyers looking for information about this community were finding me online. I averaged a couple of phone calls a day for weeks regarding this home and it wasn’t even my listing. Imaging how the phone rang for the brokerage that was marketing this home.
Long story short, this house received multiple offers that were submitted to the bank. The home is currently “under contract” but the price is now raised to a price in line with the remaining homes on the market in that community. There it sits waiting to close many months later. Don’t you wonder how hopeful all of those buyers who placed an offer on what they thought was the deal of the century still feel?
This home listing was basically wearing a disguise as a fire sale when it was actually more like a silent auction. While a seller may find a buyer this way the buyers who may have really had an interest in the property won’t get the home. Maybe the buyers understood what was going on and maybe they didn’t.
Somehow consumers have falsely romanticized short sales, foreclosures and now the “silent auction” homes. What is so desirable about competing with a couple dozen other buyers, in a bidding war on an underpriced home, sitting around for months, waiting for a lender to respond to pipe dream pricing while legitimate deals with potential fall by the wayside?
Read also: The Elephant in The Room
Most of the buyers that get involved in transactions like this have absolutely no idea that they don’t stand a snowballs chance in the Florida scorching sun of scoring that home anywhere near the listed price. Regardless of what the list price is and the fact that there are full price offers, the bank is still going to base its final decision on an appraisal or broker’s price opinion. So whether that home is listed for one dollar or one hundred thousand dollars the bank won’t approve an offer unless it’s in reasonable proximity to the appraisal that they’ll call for right after they get their wheel barrel full of offers.
Read also: When Fence Riders Reach Point Break
Many people make attempts t to buy “silent auction” homes but only one person stands a chance at owning it. While all of those buyers were spinning their wheels in the swamp of bank involved real estate the other viable home listings with equity or sellers who can make up the difference of the mortgage payoff were picked up by the buyers that realized what was really going on. Those buyers are probably already locked in on a decent interest rate, too. They’re not worried about rate increases and how much it will really cost them over the span of their fifteen or thirty year mortgage, either.
If you’re a buyer and thinking of trying to scoop up one of these too good to be true deals you need to know that you’ll likely be chasing ghosts. You may want to formulate a new plan and streamline your options. If you have a family that needs a roof over their head you need to be serious about the type of property you are looking at, the condition of its current state of ownership, the status of its current mortgage and the likelihood of getting it closed in a reasonable amount of time before you even get involved.
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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area. Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor. If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.
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I took LBD to Dog Beach at Lovers Key. We tried it. He was horrified at the notion that sand was on him, it smelled like the sea, other dogs were there, there was no air conditioning and there wasn't some sort of location for the passers by to stop and worship him.