Are lower end condos getting multiple bids way above list?

A

airbear747_IHB

New member
Hi -



I am a first time home buyer, approved for an FHA loan. I am looking for a condo in mid orange county for less than $125k. My agent found a couple that I wanted to see. The first was listed at $105,000 in lake forest and the second was listed for $115,000 in Fullerton. When she called to set up the showing, she was told by both properties that they had multiple bids that were upwards of $140k!



Is this a true picture of the low end condo market? Should I give up for now and wait until the tax credit is gone?



Thanks in advance for your advice.



- airbear
 
Yes.



My range is in the 300Ks and I'm finding the same thing. It's a price war out there. With not a lot of inventory out there these days people will attack a property like locust and throw higher offers out there.



Some realtors will be fair and submit the first offer they receive. Others utilize a bidding war tactic.



In addition, I recently visited two new listings that had offers on them a few hours after they hit the MLS. Realtors are submitting offers sight unseen.
 
[quote author="airbear747" date=1247274361]Hi -



I am a first time home buyer, approved for an FHA loan. I am looking for a condo in mid orange county for less than $125k. My agent found a couple that I wanted to see. The first was listed at $105,000 in lake forest and the second was listed for $115,000 in Fullerton. When she called to set up the showing, she was told by both properties that they had multiple bids that were upwards of $140k!



Is this a true picture of the low end condo market? Should I give up for now and wait until the tax credit is gone?



Thanks in advance for your advice.



- airbear</blockquote>
I would definitely wait until the craziness passed. Also, do some due diligence on the HOA to make sure that the finances are in order because the last thing you want are increasing HOA fees and special assessments.
 
<a href="http://cowles.econ.yale.edu/P/cp/p09a/p0909.pdf">Don't be part of the herd, you will be led off a cliff.</a>
 
[quote author="airbear747" date=1247274361]Hi -



I am a first time home buyer, approved for an FHA loan. I am looking for a condo in mid orange county for less than $125k. My agent found a couple that I wanted to see. The first was listed at $105,000 in lake forest and the second was listed for $115,000 in Fullerton. When she called to set up the showing, she was told by both properties that they had multiple bids that were upwards of $140k!



Is this a true picture of the low end condo market? Should I give up for now and wait until the tax credit is gone?



Thanks in advance for your advice.



- airbear</blockquote>


is it really because of the tax credit that condos in this price range would be bid up so much higher than listed? im a first time buyer, but i dont count on money that i dont have, which the tax credit is to me... just seems as if all the doom and gloom in the media about the collapse in real estate has brought the po folk like me out of hiding, only to be disappointed
 
A friend of mine recently bought a condo in OC in April. She was mainly looking at condos under $150K. But before that she spent a month or two submitting offerings left and right hoping to get a place but each place she bid for had multiple offers coming in also, so of course she got rejected by all of them. She was either outbid or the buyer was paying all cash.



Would it be possible that a lot of the buyers for these lower end condos are not buying the to live in but more an investment as a rental unit? especially those that are paying full in cash???
 
[quote author="hehegrl" date=1247284298]



Would it be possible that a lot of the buyers for these lower end condos are not buying the to live in but more an investment as a rental unit? especially those that are paying full in cash???</blockquote>


Yes. Depending on the location and market rent, it would be quite easy to generate a positive cash flow from a property like that. $600 a month service on a loan with no mortgage insurance. However, as some people on this blog will point out, you are also competing with the wannabe Donald Trump's out there. People whom are still biding on property's and not thinking of what could happen if rents decline. Those individuals will learn really quickly that they aren't as smart as they thought they were.



*$600 a month considering they actually take a loan
 
[quote author="hehegrl" date=1247284298]A friend of mine recently bought a condo in OC in April. She was mainly looking at condos under $150K. But before that she spent a month or two submitting offerings left and right hoping to get a place but each place she bid for had multiple offers coming in also, so of course she got rejected by all of them. She was either outbid or the buyer was paying all cash.



Would it be possible that a lot of the buyers for these lower end condos are not buying the to live in but more an investment as a rental unit? especially those that are paying full in cash???</blockquote>


yea thats what ive been told by agents on a couple occasions, that my 'offer is up against all-cash offers, only chance is to offer higher'... but since ive got to stick to my set budget, theres no followup action on my part...
 
[quote author="ArbyOC" date=1247275496]Some realtors will be fair and submit the first offer they receive. Others utilize a bidding war tactic.</blockquote>


The job of the listing agent is to get the most money for the property for their client. By starting a bidding war, they are just doing their job.
 
Au contraire, (sp?)



The Realtor is to find the "highest and best use" not highest and best price. Had Realtors focused on consumer protections rather than higher commissions we would not have found ourselves in the spot we are in.



Realtors cannot be the gatekeepers against rampant greed, but they should have at least put up a better fight.



My .02c



Soylent Green is People.
 
[quote author="Soylent Green Is People" date=1247289574]Au contraire, (sp?)



The Realtor is to find the "highest and best use" not highest and best price. Had Realtors focused on consumer protections rather than higher commissions we would not have found ourselves in the spot we are in.



Realtors cannot be the gatekeepers against rampant greed, but they should have at least put up a better fight.



My .02c



Soylent Green is People.</blockquote>


I disagree somewhat. Now, artificially boosting commisions is not in the client's best interest (pocket listings, for example). But getting the most money possible (from a legit bidder-if somebody's financing is weak, taking a lower bid from somebody with, say, all-cash makes sense) is absolutely the Realtor's job. There's no "greater good" here, for the most part. It's just like a defense attorney's job is to get his client off, even if he thinks/knows that his client commited the crime in question.
 
Not to quibble, but lumping Realtors with Defense Attorney's isn't the best way to support your case here. Trust me as a loan hack. we get compared to used car salesmen all the time in the vein of "birds of a feather flock together". A good Realtor will refuse a listing due to WTF sellers, just as good Defense Attorneys (.....cricket's chirping) need to pass on a case every so often. As we all know, what is a cruise ship full of attorneys and realtards called when it sinks to the bottom of the ocean? A good start. But I digress....



A Realtor should advise a buyer not to over pay and not to over bid. They also should advise sellers NOT to accept the highest offer because it is likely going to be an appraisal issue once the transaction gets into escrow.



In a perfect world this would be the norm. Since we live in an imperfect world we can only ask that people would look out for what's best, not what's easiest to get done.



My .02c



Soylent Green Is People.
 
[quote author="Soylent Green Is People" date=1247291401]Not to quibble, but lumping Realtors with Defense Attorney's isn't the best way to support your case here. Trust me as a loan hack. we get compared to used car salesmen all the time in the vein of "birds of a feather flock together". A good Realtor will refuse a listing due to WTF sellers, just as good Defense Attorneys (.....cricket's chirping) need to pass on a case every so often. As we all know, what is a cruise ship full of attorneys and realtards called when it sinks to the bottom of the ocean? A good start. But I digress....



A Realtor should advise a buyer not to over pay and not to over bid. They also should advise sellers NOT to accept the highest offer because it is likely going to be an appraisal issue once the transaction gets into escrow.



In a perfect world this would be the norm. Since we live in an imperfect world we can only ask that people would look out for what's best, not what's easiest to get done.



My .02c



Soylent Green Is People.</blockquote>
Very well put...preach on brother man! Over bidding = bidding against yourself. The best thing for buyers to do is set their own reserve price for a property they are interested in and not go above that. Buyers should really bone up on the "Winner's Curse" economic theory (unfortunately too many buyers get emotional which results in irrational decisions).
 
Yup... a good Realtor should tell their client to go with the sure money rather than the high money... because in the end... if the high money doesn't pan out... it might get you less than the sure money in the first place.



I am surprised there are "bidding wars"... this seems like the antithesis of the bubble days where people were afraid of being priced out... now they are afraid of getting "bottomed out"?
 
[quote author="norcaljeff" date=1247460048]The home foreclose moratorium per CA law is causing much of this. Once that 90 day window passes, prices will retreat again.</blockquote>


I remember reading that this moratorium was only for lenders who didn't have loan modification programs up and running. Since most lenders do by now, I heard that the moratorium wouldnt delay foreclosures like the last. Is my memory wrong?
 
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