Monday, December 14, 2020 / by Ernie Arrizza
Who determines the final sale of a property when you sell it?
There are many factors that go into getting offers when you list your house. If you read my article last week, Real Estate Formula you will realize that having everything in that formula is key to maximizing your potential, even in a blazing hot market.
It doesn't take a brain surgeon to understand that there needs to be people interested in the property at one particular time at that particular place and willing to pay that particular amount. It's supply and demand. We all know that because that's how we get a bidding war.
Sometimes agents and owners try to artificially create this by under pricing properties, and in some cases pretending illegally there is a buyer. It happens, It happens.
In the end, it whether or not a buyer is willing to pay the price and whether or not in most cases the bank will finance this venture. A bank will only finance a house if it is in their particular interest these days. Even if you are approved for a certain mortgage, it doesn't mean they will finance a property if you grossly over bid for it. In some cases the appraisal comes back and they will only give you sufficient funds to cover what they believe the place is worth. The house never loses. In this case the bank. They don't want you to not be able to pay for this property and then 3 months later have to try and sell this property for a discount. They want you to pay them interest for 25 years.
I always tell my clients that "The market speaks" We can talk all day and night about what we think, and set up strategies, and marketing etc, but at the end of the day, the market is not there, it's not there. Take for instance what is going on right now. Condos are a dime a dozen, but houses in the suburbs with some land are selling like hot cakes. The condo market is in low demand, and the prices keep dropping and dropping. A lot of people are just working from home, and nothing is going on in the city. People don't want to be cooped up in a box, when there is nothing open. Meanwhile if you work form home and want to go outside, it's steps away in the burbs. It's common sense. Now wait until the city is open for business, concerts are happening, sports, theaters, etc, people are going to start flocking back, and prices will jump back up.