Buyers’ Tough Lessons

By Larry Hotz, Denver real estate expert

November was tough month for four of my buyers this year.

Chris and Maria are two of the nicest and friendliest Home Buyers I have met from this website. They were just married this spring and looking forward to purchasing the perfect home to raise a new family. Highlands Ranch was their choice.

So, we looked at many new and resale homes there. Finally, they found one they liked. So, they made an offer.

They offered less than the asking price and asked to have the Seller pay $10,000 in closing costs. It was an aggressive offer but the home had been on the market for six months. 

Wouldn’t you know? Of course a competing offer came in at the same time. Chris and Maria decided not to increase their offer even considering the competing offer. They thought perhaps the other offer would be rejected and theirs might be accepted.

Well, that didn’t happen. The home went under-contract at essentially full price.

"We will go full price", Chris told me then on the phone after he found out. "It’s too late", I explained. "But, Maria really, really loved that house and I am in trouble if I don’t get it for her." "Well, unless the contract falls on the loan or inspection contingency there isn’t much chance you can get it. That only happens about 7% of the time."

Then, there is Bob who also found me on this website. He is a top executive of company moving an office to Colorado. He and I spent several days just scouting neighborhoods. Just two weeks ago, he came back to Denver for a serious house hunting trip.

"My wife really likes the home in Castle Pines but lets look at the top 5 contenders", Bob asked. Well, we did. But, when we came to the home in Castle Pines and approached the front door, the lady of house looked surprised and said "I just accepted a contract". Again, that home had been on the market for almost 6 months. And, again I was the one who was surprised to find out that Bob and his wife were ready to offer on that home that day.

These were two "real-life" examples of what can happen even in a softer market. Of course, Denver is not nearly as soft as other markets but fewer homes are selling even in the better areas of the city. Disappointments can happen to buyers in any market.

Still, November turned out to be great for all these buyers. The home that went under contract fell out from contract. The holders of that first contract were not willing to accept some mold mitigation in the basement crawl space. Chris and Maria talked to the professional mitigater and were convinced his remedies were sufficient. Maria got the home she loved.

Turns out that Bob and his wife reconsidered what area they really to live in. They decided that that outstanding schools in the Cherry Creek neighborhood were more important than getting  a 2 acre lot near Castle Pines. So, they contracted for beautiful Tudor home near Greenwood Village.

 

 

November 30, 2007 | Filed Under South Suburbs 

Comments

2 Responses to “Buyers’ Tough Lessons”

  1. immobilien on January 12th, 2008 7:51 am

    I would like to know what areas of the country will see the greatest “turn around” in the coming months and years 2008, 2009?

  2. larry on January 12th, 2008 9:17 am

    That is a great question. I guess if I could really answer it definitively, I would be a very highly paid consultant which I am not. But, I am still going to give it a shot.

    I believe the two most important things to assess for each market is demand and supply.

    Denver, for instance, has a growing demand because more people are moving into the city than moving out. Also, apartment vacancies have fallen from from 15% to 5% in the last 6 years.

    Supply here is falling. Resale homes on the market have declined from November to December and overall in the last 4 months. The outlook for supply does not suggest a huge increase except in the less desirable and lower incomes areas of town. Employment is low here and forecast to be low in 2008.

    Other markets should do relatively well are high employment areas with net gains in forecasted population. Do the homework for each city is my suggestion. Good candidates might be North Carolina, Seattle, Portland Colorado Springs and possibly Boston.

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