Deal or No Deal
March 15, 2010
A few years ago there was a popular TV show called "Deal or No Deal". I am not a TV watcher so I know very little about the actual show. It is the title that caught my attention. In the current real estate market, it seems as though many buyers are wanting to play the game of "Deal or No Deal".
The first round of the game has to do with finding a property that is priced at a level such that it is viewed as "a deal". Some serious buyers really do a lot of homework to research such data as prices in the neighborhood, prices per square foot, what percentage of price decline has occurred, etc., etc. By the time they are ready to make an offer on a property, they evaluate the listing price as to whether it is "a deal". If not perceived as "a deal", then they either pass on that property or submit an offer in line with the perceived "deal" price.
In this game, buyers often are dismayed to discover that they are in a multiple offer situation and that they end up losing (i.e. not being the successful buyer). If a property is now listed at 20-30% below the price for which it sold in 2005-2007, chances are that it is a good value - maybe not "a deal", but certainly an opportunity for a buyer to purchase a home that might formerly been out of reach price wise. This could be a "real deal".
The second round of the game has to do with the loan process. Many prospective buyers now search the Internet for financing. They may also call local mortgage agents. They then compare the stated interest rate. Sometimes they remember to also ask for the financing fees. New RESPA regulations do offer rules so that a potential borrower can compare the actual costs of obtaining a loan. Often , the "deal" here is the lowest quoted interest rate - at least that is the reason a borrower selects the lender that will process the loan. Unfortunately, like any vendor, there are reliable lenders and less than reliable lenders. It is not always "a deal" to choose a lender whom you never meet and who may be physically located in another part of the country.
I have seen some of these "deals" turn into "no deal" when, after a month or so, this lender says, "Sorry, No deal."
The best "deal" on this real estate market, in my opinion, will be a property that meets a buyers lifestyle needs and financial needs. A professional real estate agent will provide information on comparable sales and will be able to help the buyer construct an offer that will be competitive in a multiple offer environment.
A few years ago there was a popular TV show called "Deal or No Deal". I am not a TV watcher so I know very little about the actual show. It is the title that caught my attention. In the current real estate market, it seems as though many buyers are wanting to play the game of "Deal or No Deal".
The first round of the game has to do with finding a property that is priced at a level such that it is viewed as "a deal". Some serious buyers really do a lot of homework to research such data as prices in the neighborhood, prices per square foot, what percentage of price decline has occurred, etc., etc. By the time they are ready to make an offer on a property, they evaluate the listing price as to whether it is "a deal". If not perceived as "a deal", then they either pass on that property or submit an offer in line with the perceived "deal" price.
In this game, buyers often are dismayed to discover that they are in a multiple offer situation and that they end up losing (i.e. not being the successful buyer). If a property is now listed at 20-30% below the price for which it sold in 2005-2007, chances are that it is a good value - maybe not "a deal", but certainly an opportunity for a buyer to purchase a home that might formerly been out of reach price wise. This could be a "real deal".
The second round of the game has to do with the loan process. Many prospective buyers now search the Internet for financing. They may also call local mortgage agents. They then compare the stated interest rate. Sometimes they remember to also ask for the financing fees. New RESPA regulations do offer rules so that a potential borrower can compare the actual costs of obtaining a loan. Often , the "deal" here is the lowest quoted interest rate - at least that is the reason a borrower selects the lender that will process the loan. Unfortunately, like any vendor, there are reliable lenders and less than reliable lenders. It is not always "a deal" to choose a lender whom you never meet and who may be physically located in another part of the country.
I have seen some of these "deals" turn into "no deal" when, after a month or so, this lender says, "Sorry, No deal."
The best "deal" on this real estate market, in my opinion, will be a property that meets a buyers lifestyle needs and financial needs. A professional real estate agent will provide information on comparable sales and will be able to help the buyer construct an offer that will be competitive in a multiple offer environment.
posted by shirley harry at 8:02 AM
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