What’s in a Listing Price?
There’s something funky going on in the Twin Cities Housing Market in 2009 right now. I’m not talking about the low interest rates or tax credits, but what I’m talking about is Listing Price.
Listing Price, also known as Asking Price, is the price you would see on the MLS or other websites that list properties for sale.
The funky happenings around town are the Listing Prices of Bank-Owned Properties (REO’s).
What banks have started doing recently is actually listing homes at prices lower than market value, and getting multiple offers that drive the price above what they maybe should get for them.
Example: House that’s worth $100,000 is listed for $90,000. Buyers come in within the first couple weeks and think the house is a great deal (which it would be at that price). 3 or 4 offers come in, and the bank asks for the “Highest and Best” from each buyer and their Realtor. Since one or more of the buyers really want the house, they bid well above listing price to make sure they get the property. So a home that should have sold for $100,000, actually sells for $103,000 or more.
This is genius, really. And I can’t say I blame the banks for doing it. In fact, it’s probably a good thing for the market to make sure prices don’t plummet even further and thus cause another economic downturn.
What does this mean for the First Time Home Buyer??
Make sure you are prepared with your financing, and have done the research with your real estate agent on the area and the comparable sales. When you find the right house for you, don’t wait!!
Be ready to write an offer the same day and don’t think that you can offer 80% or less than list price and have a chance at getting the house, especially if it’s a Foreclosure Home.
If you need help learning about the offer process, or need financing advice, please call or email me. Click here for Contact information.
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