Here’s an interesting stat from April’s RMLS Market Action: there were more closed sales in April of 2007 (2598) than there were in April of 2006 (2558). Properties are moving. Yesterday, we lost out on a multiple offer situation at full price. After looking at about ten properties, one was clearly the favorite. It was listed at the beginning of May and the first accepted offer failed (apparently when the buyer got cold feet). Back on the market, our offer was competing with someone who had missed out when the first offer was accepted. The seller chose that offer simply based on the fact that they had been interested in the property longer than we had. We were told the offers were almost identical (after the fact). That happens.
Part of the discussion we had was, “what price to offer when we think there is a competing offer?” If we have comped the property out and see that it is fairly priced, you have to ask yourself, “will I be upset if I lose this property to someone else for X dollars?” In this case, the conversation was over $5000. At 7% interest the difference in payment is roughly a dollar a day. Analytically $5000 is a good chunk of change to most people. Emotionally, it was decided that it was a small price to pay for what we thought would be the stronger offer.
12 Comments on “$5000 over 30 Years- Analytical V. Emotional”
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It was listed at the beginning of May and the first accepted offer failed (apparently when the buyer got cold feet).
It’s a great time for buyers to have cold feet.
Also, are you sure that it was just a case of cold feet? I’m hearing that deals are falling through because borrowers are having a tougher time than they anticipated getting funding. Buyers also have to come up with some cash up front now – they got used to all that 0-down happy talk the last few years so it can come as a bit of a shock that they might actually have to (*shudder*) put 5 or 10% down. I suspect that when they start thinking about writing the $35,000 check for 10% down on that near-median-priced house they have second thoughts – can’t say as I blame’em.
Ron Ares of re:PDX reports different April 2007 numbers. “Compared to April 2006, new listings are up 23%, closed sales are flat, and pending sales are down about 7%.” http://www.repdx.com/2007/05/16/market-activity-april-2007
Both number of new listings and pending sales are better indicators of current market health than closed sales, which is a lagging indicator.
My bad. I misread (and mistyped) April 2007 sold figures. Should have been 2594, not 2994. But, in my opinion, still surprising. A (very) slight increase doesn’t follow what would have been expected considering last year’s booming market.
Closed sales are done. New listings get withdrawn, canceled, go pending or accept a bumpable offer. Pending sales get cold feet (that’s what the listing said, no way to verify), buyers fail to get financing, etc. Closed sales are the only “sure” numbers.
Perhaps you could correct the typo in your original post?
Done.
The National Assocation of Realtors itself considers pending sales to offer “more solid information on changes in the direction of the market than any of the indicators currently available.”
Personally, unless a seller totally cancels a listing, a new RMLS number should not be issued until 90 days after the original or last number. I'[ve seen the same house for sale in Forest Heights with three different RMLS numbers – very misleading after a while.
Same number of sold homes with higher inventory indicates bad market news rather than good news. Same percentage of sold homes in relationship with inventory would indicate at least a steady market.
Example 50 homes sold with 100 available = 50%
(but)
50 homes sold with 200 available = 25%
Finally – I can contribute to the blog on which I’ve been lurking for so long. May not be all that insightful considering the stakes, but interesting and somewhat relevant (I think) nonetheless.
http://blog.oregonlive.com/breakingnews/2007/06/pippen_reportedly_sells_portla.html
link seems to have gotten cut off… trying again.
http://blog.oregonlive.com/breakingnews/2007/06/pippen_reportedly_sells_portla.html
dp,
You beat me to the punch. Not sure why you are having URL problems but Pippen’s home was going to be the topic of my post today.
We need to consider how one outlyer skews market data. 812 days on market.
Part of the discussion we had was, “what price to offer when we think there is a competing offer?”
This question will become increasingly, and then completely, irrelevant within a few weeks. Prices are going down, and there will no multiple offers no matter how great the “home.”
Having just moved to Portland, from Sacramento, I’m interested in hearing about the real estate market here. Kinda sounds like Sactown did last year.
Regarding the post, it’s definitely nice for sellers to have multiple offers but I would not go too crazy as a buyer in writing a better offer.