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Real Estate Industry

August 22nd 2005

THE SILLY OFFER SEASON

Unless you ask, the answer is always no.


"I hope for my sellers' sakes the time never comes when I have to rely on one of your offers to sell their properties."

So said an indignant agent in a terse e-mail to an audacious buyer last week as he responded to what's known in the industry as a "silly offer".

After several years of being asked to pay higher and higher prices, after being treated with almost universal disdain not to mention shedding buckets of tears at the emotional flogging they've endured it's time for property buyers to get the upper hand.

And many of them are loving it.

With credible reports that property prices are 20 per cent over-valued and with everyone other than the most ridiculously recalcitrant realtors realising that the boom has become a bust the only thing to increase in value is the confidence (okay, sometimes, the cheek) of the buyers.

It's the age-old law of supply and demand. As buyers have decreased in numbers their chance of buying more cheaply has soared.

And just how cheaply can they buy?

Well, it depends how "silly" (or cheeky) they are prepared to be.

If prices really are 20 per cent too high, then asking for a 20 per cent discount seems quite reasonable. Ask for a 30 per cent discount and that might be headed toward the silly level.

But not according to some agents who are getting upset with any buyer who dares challenge them with an offer which sees their commission slipping away. The audacious buyer mentioned earlier offered $420,000 for a home reportedly priced at $450,000 less than a seven per cent discount.

Well, look out sellers, because the next offer may be even less than $420,000. In fact, some cheeky buyers, when asked to make a better offer are immediately decreasing their original offer instead of increasing it.

They are making an offer that's better for them as buyers. How silly is that?

It's not silly at all because many sellers are rejecting offers and then, a few weeks later, having to accept an even lower offer. This is what happens when prices are going down. It's not silliness, it's economics.

So, don't be shy buyers, if you make a silly offer, what's the worst that can happen?

Well, there's an old saying, "Until you ask, the answer is always no."

The silly offer season has arrived; and that means the answer just might be yes.


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