Buyers Beware!

Agents try a new tactic!

Recently a new phenomenon has appeared in the local real estate market in the tri-valley.

Many homes in Livermore and homes for sale in Pleasanton are affected.

Several homes have come onto the market at very deep discounts. These are bank owned properties or “REO”s. The asking price is so low that it does not really reflect the true value of the home. For example, a property in Livermore bank owned and 2100 square feet was listed at an asking price of $330,000. The last home similar to it sold and closed for $550,000 one month ago. There currently exists two others similar on the market for the low $500,000s. By listing the property at an artificially low price, the bank and listing Agent aims to get a lot of excitement and activity immediately and encourage multiple offers. The house I give as an example generated over 20 offers in only 4 days on the market! The idea here is to have buyers ‘bid up’ the price by competing with one another!

There is nothing wrong with this of course nor is it unethical, but I do believe that innocent buyers who believe that they are seeing a great deal need to be counseled that their chance of being successful on purchasing one of these homes at these discounted prices even if they offer full or over asking price is unlikely, moreover they are sometimes being led into the competitive bidding war.

Take care before you make an offer to purchase. Make sure you see the last 2 months sales in the neighborhood of similar homes. We are still in a declining market but if something seems too good to be true, probably it is.

Related posts:

1. Not all buyers are worth a counter offer!
2. How to find Bank Owned property
3. Have we hit bottom?
4. It doesn’t matter!
5. First Time Buyers get a credit.

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