bostonbubble.com

[Hard Rain]

I went to Hummer sale yesterday and it was mobbed! While the Hummer only gets 3 mpg and the market for gas guzzlers is falling like a rock , I was worried “I wouldn't have a chance”. Remarkably only one of the “mob” actually submitted a bid (presumably a low ball offer) so I raised my offer to over asking price and was in business. I was “ worried about too many offers and the price shooting up” . I have to tell you, I'm lucky in life.....

From today's Globe:

“Francesco Gambino arguably benefited from analysis paralysis; that is, of other shoppers' inability to act. The 43-year-old Gambino and his wife, Laura, 42, visited some 80 homes over two years looking for a property. They were thrilled with a Colonial near Lexington Center listed at $542,000, but the open house on Aug. 31 was mobbed. They worried they wouldn't have a chance: They felt the house with a nice backyard and good location was fairly priced. They made their offer that evening and found they were one of only two bids. They raised their offer to just above asking the price and were in business. "We were worried about too many offers and the price shooting up," said Gambino. "I have to tell you, I'm lucky in life."

Full story:

http://www.boston.com/realestate/news/articles/2008/09/28/wrestling_with_buyers_anxiety/?page=1

[Brian C]

[Guest]

IRONY

[Dorchester Grandma]

I recently made an offer on a bank owned condo in a very nice part of Dorchester, a second floor of a triple decker which needed a new bathroom, kitchen and some paint.. The asking price was $131,900. I was told that there were "multiple offers" and I thought that this might or might not be true.

I offered the asking price first, then when asked for "best and final" I offered $3000 over the asking price. Well there really were a number of offers and my perfectly good offer, (with pre-approval from a good bank) was passed over for another. Did this buyer offer more money? My realtor was unable to find out exactly why they did not choose my offer.

It seems that if a property is truly a good deal there is competition for it. There has been some improvement in the market but not enough. I really hate having to compete for a home and it seems that this is going to occur time and time again.

[samz]

The Boston Globe reporting on real estate is horrible (as pointed out by many others here). After reading a recent article I sent this letter to the editor (and got no reponse):

Hello,

These comments are for Elizabeth Gehrman, author of the column
"Bidding Wars? Quick Sales? It's Happening!" in the Globe on Sept 7th.

It seems like many of the real estate articles in the Globe are very
strongly biased towards sellers (and, of course, real estate agents).
I am a potential buyer and I was totally turned off by the article.
Why would I want to get into the market with such cynical sellers and
agents? This quote says is all:

"Several agents agreed that creating a sense of urgency is key. Buyers
must feel that if they don't act quickly, they'll lose their dream
house - a feeling that was common at the height of the market.

Thanks a lot. At least you're honest about the fact that in real
estate the buyer is always the sucker.

The most disturbing part of the article is the cognitive dissonance
between the desire of housing industry professionals to return to the
gold-rush boom days and the massive meltdown occurring in the
financial sector. I think it's irresponsible and distasteful to go on
about turning huge profits on a home sale at the same time that
taxpayers are picking the bill for huge bailouts. If there was a mea
culpa from the real estate industry, I must have missed it because it
sounds to me like "back to business as usual".

People will argue that Arlington, MA isn't part of that problem. But
certainly the huge increase in home prices there is a direct result of
the same financial structures that enabled huge price increases
everywhere. Is there any other reason that the median price of a home
in Arlington would double in 5 years? The population is roughly the same;
the rate of home sales is the same; median incomes are roughly the
same.

I wish I could go to the Globe for real, in-depth, responsible,
unbiased analysis of the real estate industry. But sadly it seems like
the paper has some other agenda.

-Sam

[john p]

I think your letter is in the strike zone.

However, nobody is going to tell you what to offer and they can huff and puff all they want, IT'S YOUR MOVE.

I would say to all prospective buyers, think about your risk, break down all the variables and make your own formula and model out where you think the floor will be and then give yourself a factor of safety in case you're wrong. I'm saying learn to QUANTIFY YOUR RISK. Then, feel comfortable about your offer. It should not be something you feel guilty about.

In 2006 I put an offer in on a house that was asking around $650k. I put in an offer for $450k. It's still for sale today, and it is asking $465k.

http://www.realtor.com/ ...truncated...

This house is 4,000 square feet and has a mad dog family room to throw benders in. When we put in the offer, the seller was insulted. At the time, it may have been an insult, but I wasn't trying to be a prick or an aggressive jerk, I was honestly comfortable with my analysis and projection that that was/would be the value of the place.

If you do your homework and quantify your risk, you'll actually come off more comfortable and at peace with your offer. If you act like an aggressive yuppie, if a seller is borderline, they might not say yes out of princple. Now I am a reject from any group: yuppie, redneck, etc. etc. so please don't take anything I say personally.

Editor's Note: This post was edited to abbreviate a URL which was widening the page due to the way that the forum software lays out posts. No other changes have been made, and the URL still points to the original destination - only its display has been shortened.

[Dorchester Grandma]

I intend to keep offering the asking price or a bit over if need be. I am hoping that there will soon be enough bank owned or even short sale properties to choose from so I don't have to compete with other buyers or investors.

I wait for prices to come way down so that I can have an affordable place in which to live when I retire.

I am reminded of the cherry tree in the back yard of my childhood Long Island home. We used to wait until the cherries became just a bit riper before picking. Another day or two and they would be perfect for our pie. Then when they are just at their peak of ripeness we would wake up to a tree full of cherry pits. The birds has eaten them all during the night. This is exactly what has been happening with Dorchester condos. The day that a condo price drops enough to be a good deal, an investor gobbles it up (often with a cash deal) before I can even get to look at it.