Miami Homes -Paying Tomorrow’s Prices Today

By Maggie Dokic on January 8th, 2009
Categories: For Buyers, Real Estate Chatter

I had a lovely conversation with a Miami home buyer the other day. I was helping him sort through relevant market data so he could place an offer on a townhome. I didn’t want him to pay more than he had to. I also wanted him to understand that he wasn’t going to pay less than the market data said the home was worth.

I boiled it up by stating, “I don’t want you to pay yesterday’s prices (which were higher), but you can’t expect to pay..” before I could finish, he chimed in and finished it for me… “tomorrow’s prices either.” Eureka! We laughed. I realized he understood perfectly what I was referring to. I love it when my point gets across and makes sense instead of garnering a glassy-eyed look.

It isn’t always that easy to get home buyers to understand this. Everybody wants a deal. That’s fair enough. I do too. But I’m reminded of a home buyer I was working with last year. She had a specific date by which she needed to be able to move into her newly purchased home. It was 60 days away. We had to find a property quickly and get it under contract so she could meet her deadline.

I must have shown her 25 homes. Nothing was ever right for her. But I understood why. It’s not that the type of home she was looking for did not exist. There were plenty of them! One small…errr….big problem, though….they were priced much higher than she was willing to pay. Not being realistic with prices can be a huge problem when trying to buy a home.

In an effort to show her what was available in her price range, in the condition she wanted, I even took her to areas that were farther away from her work. No good. Too far. Beautiful property though.

We finally found one she could live with, close enough and with a gorgeous lake view. I could imagine waking up each morning to that view outside my window. Even though she was qualified to pay the asking price, and it was worth what the bank was asking, in the condition that it was, she insisted on going 30% lower than asking price. I prepared the offer and we submitted it. No good. They counteroffered at 5% lower than asking price. She stood firm and didn’t budge so that deal went sour fast.

I understood all along that she was trying to pay tomorrow’s prices today. She wanted the townhouse in March, but she wanted to pay the price that it would be worth in September. Everyone knew that the market was headed south. Why couldn’t I find her a home where the bank would take far less than they were asking? Basically, because the banks really do price at a make-me-buy price. Most people see that and have picked up some great deals. The homes that don’t sell, for whatever reason, are reduced in price again usually every 30 days. The banks don’t want to hold on to dead-weight real estate and will drop the price in order to get it under contract.

One very important thing getting in this young lady’s way, as I’ve mentioned, was her pressing time needs. She had to close by a certain date. She didn’t have the luxury of being able to wait. When you find yourself in a situation where time is not on your side, you can’t afford the luxury of being that unwilling to negotiate the other aspects of the deal, such as price.

So yes, if you’re bent on paying a certain price, and are willing to take the chance that the house will still be available in 4 months, then chances are you will pay less for that house later than you will now (and I’m referrencing today’s market, nothing else). But who can guarantee that the house won’t sell? No one.

At the end of the day, paying tomorrow’s prices will be done tomorrow. Today calls for something else.

This entry was posted on Thursday, January 8th, 2009 at 2:47 pm and is filed under For Buyers, Real Estate Chatter. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

1. myrtle beach foreclosures said at January 9th, 2009 at 11:48 am

   Recently I have saw some banks offering properties at what you would definatly call “make me buy prices”. with short sales too you just have to be willing to make an offer!