Real estate today is very very different from just a few years ago. When I was just beginning my real estate career we were in a market where builders couldn’t keep up with demand and everyone was buying. In some areas there were even bidding wars on homes which helped drive up prices. To top that off mortgage companies were lending to more and more unqualified buyers.
Today’s market is ramped with foreclosures. In Columbus, and in many other parts of the country, the only thing selling are these bank owned homes. Families, couples, and individuals are taking advantage of someone else’s situation and personally, I think they should. Even sitting here writing this I am sitting on my couch in one half of a duplex, that I own, which is now worth some $20,000 or $30,000 less than what I payed. I am not going to sell my home if I don’t have too but with renters paying me rent it does help some. So why not take advantage of a discount like that.
One of the specific types of foreclosures, or repossessed homes as they like to be called, are HUD homes. Owned by the department of Housing and Urban Development (hence the name HUD) these homes are usually a terrific deal. There’s only one problem; every agent in town is bidding on these homes and they’re bidding over the asking price, sometimes as much as $30,000!!
Now why in your right mind would you do that? The real estate market is at an all time low right now and you’re bidding over what the asking price is. Why? I feel terrible when by a client what they should offer. I give my honest opinion but I always end with a little phrase “Well someone else can always bid higher.” In all likelihood they probably will.
I am not sure the other agent realizes it, or maybe their client just wants the home that bad, but you’re responsible for the difference between HUD’s asking price and what you offer. I’d love to see the bank accounts or the jobs of these people bidding $20,000 over the asking price of a HUD home. Feel free to donate to my cause if you like but seriously, you’re over paying on a foreclosure. I just find the situation ironic at best.
My point in all this is if you’re a buyer bid high but know your means and limits. Just because someone else wants the home that bad doesn’t mean you need to follow suit. Agents come on. Do you really need to tell your client to bid that much or are you looking for a bigger commission.
