Buyers Beware: Low Ball Offers Don't Work Anymore!

WASHINGTON – June 18, 2012 – It’s not something that economists routinely track, but it provides a rough sense of what’s happening in local real estate markets. Call it the lowball index.

A year ago, according to researchers at the National Association of Realtors (NAR), one out of 10 members surveyed in a monthly poll complained about lowball offers on houses listed for sale. In the latest survey – conducted during March among a sample of 4,500 agents and brokers across the country and not yet released – there were hardly any. Instead, the focus of volunteered comments has shifted to declining inventory levels – fewer houses available to sell – and multiple offers on well-priced listings.

A lowball offer typically involves a contract submitted to a seller where the price proposed by the purchaser is 25 percent or more below list. Lowballs increase sharply when there’s a glut of properties available, asking prices are out of sync with local economic realities, and values are depressed or uncertain. Buyers figure: Hey, why not? Maybe I’ll get lucky.

Based on the latest survey results, that sort of strategy is not a winning move in many communities this spring. In fact, in local markets where inventories are tight and competition for homes rising, realty agents say that buyers looking to steal houses by lowballing their offers are ending up at the back of the line – their contracts either rejected out of hand or countered close to the original asking price.  READ THE REST OF THIS ARTICLE

Reprinted with permission. Florida Realtors®. All rights reserved.

Miami Market Still Improving

Inventory of residential property in Miami-Dade County continues to decline even as sales remain strong.  There is now a little less than 5 months of inventory on the market.  As a comparison, in March of 2008 there was 55 months of inventory!