Newport Beach, Costa Mesa and Orange County Buyers Beware – As many prospective home buyers today are keenly aware, lack of inventory, all cash buyers and record low interest rates have created a competitive marketplace. A “seller’s market” of the past has returned to many above-water homeowners wanting to sell, especially in such great locations as Newport Beach and Costa Mesa. New data reported in the Wall Street Journal affirms that “price reductions” are gone in many markets and on the decline nation-wide. (WSJ article.)
But buyers beware of the “list price.” Even with the incline in pricing for many markets, some pricing, especially for short sale properties, can be disingenuous. As previously covered (article here), short sale “list pricing” is always “subject to lender approval” and typically only a “opening bid” request, at best. Similarly, many foreclosure properties and other forms of distressed properties seem to take on a list price dramatically below current market price. As appraisers are cautious of inclining markets; so too are many real estate professionals and a list price may be a reflection of an honest assessment of value. However, sometimes pricing is deliberately designed to cause an increase in foot traffic and create a bidding war, all to the listing agent’s benefit.
What is a buyer to do? Be prepared to make your own assessment of the value of a property and bid accordingly, in-line with your pre-approval limitations. (pre-approval article.) In most situations, if your offer makes it past the first-round (weeding out non-approved buyers, under-qualified buyers and other filtering), you will likely be asked to make your “best and final offer”; a situation which causes you to blindly bid against yourself and all others. In theses cases, you must essentially ignore the list price and shift focus to your realistic assessment of the value, your goals and your financial capacity.
Buyers seeking a home, short sale or otherwise, should consult a local qualified REALTOR® in the local market they are seeking. All real estate is local and only a local REALTOR® knows the area best.
2901 West Coast Highway Suite 200
Newport Beach | California | 92663-4023