South Bay Real Estate Blog

Thursday, February 16, 2006

What a difference a year (or 2) makes: comparing February 2004 with February 2006

In February 2004, I remember writing 15 different offers at or above asking price and not having any of them end up in a signed agreement with the sellers. Mine was always one of many offers, sometimes 10 or more. The highest number was involved in was 26 offers on one property.

When you’re one of many buyers, sometimes you get a counter offer, and sometimes you don’t. It all depends on what strategy the seller and his agent want to use. In fact, one buyer and I missed out on a property in the $400,000 range by only $1,000. We bid $8,000 over the initial asking price, and the seller accepted an offer that was $9,000 over the asking price without giving us a counter offer, which would cause us to bid up the price against the other buyer, netting the seller more money. I don’t know the circumstances because those are between the seller and his agent, but I believe his seller could have netted more money had he chosen a different strategy.

Now so far in February 2006, headed toward a normal market, we’ve written 3 offers, all below asking price, and all 3 buyers are now in escrow. And prices overall are 30-50% higher than they were then. What a difference a year or two can make!