The following scenario is fictitious and any resemblance to an actual occurrence is strictly coincidental.
Here’s the way it goes. A property that may have had a value three years ago at (take any amount) $500,000 is now being offered in the range of 50% to 60% of that. “Why is the price so low?”, you ask. It’s because an owner wants to sell and that’s what it’s going to take; and that’s at, or close to the appraised value.
Now enter the so-called buyers. The listed price and appraised value is at (any price will do), let’s say, $300,000. After showing 37 houses (yes, that does happen), the buyer decides on one. The offer is $200,000, nearly a third of the appraised value. The owners counter at $275,000 because they are motivated to take their bruises and “move on.” The buyers return at $205,000, add they want a home warranty and all the furniture. Now everyone, including the owners, the listing agent, and the buyer’s agent are wondering about the mind-set of the so-called buyers. Are these buyers or people who have nothing better to do with their time?
In the end, there are four losers: the owners, the owners’ agent, the buyers’ agent, and the buyers. Yes, the buyers. The owners are upset and discouraged because they thought that they could plan to “move on”; the two agents got nothing for their efforts during the process; and the buyers passed up a good value‚—assuming they were buyers.
Now this may sound sexist, but this seems to be a “guy” thing. In conversations with Realtors in our office and outside our firm, the story is the same. “I found them the perfect house for them. The Mrs. fell in love with the home, but the guy was a real _______!” One of my experiences ended with the wife and son leaving the island without the husband and not speaking to him for nearly a week.
While the owners and the owner’s agent go back to square one and continue to market the property, the buyer’s agent now has to decide whether or not their customer is worth the effort. Don’t forget that the agent has already shown the “buyers” 37 houses. My personal advice to the agent: “Fire the client and go fishing!”
While similar stories do exist, they don’t represent the majority of the Realtors’ experiences; most sincere buyers are reasonable and a pleasure to represent. Some often become friends of the sellers.
If you are concerned about getting a “fair” price for a home, make the offer subject to an appraisal. A reasonable seller should accept such a proposal. In any case, if the purchase is subject to financing (say of 80%), if the property doesn’t appraise at the offered amount, you can walk.
If you’re a “pure” investor, start by employing a knowledgeable and experienced Realtor; and let the Realtor know up-front that investment is your game.
If the lifestyle of the Marco Island/Naples area (or any other community) is what you seek, when negotiating to purchase a home (whether primary residence or vacation home), be reasonable. Life is too short to fight the system. In the end, you want to be a “happy camper” in your new home, not in the hospital with a coronary.