Playing the Auction game with Las Vegas Bank owned Homes
One of the main questions we’ve been getting asked lately is why would listing agents list bank owned Las Vegas Homes available for sale far below market value?
Simple. It draws a lot of attention due to the low price and even gets plenty of free advertising from all of the Las Vegas real estate agents:
- E-Mailing these “great deals” to prospective clients
- Advertising the Properties on their websites or blogs as “The Best Deals” for Summerlin Real Estate, Henderson, etc.
Much like Auctions advertising increbibly low prices to get people interested in attending the auction in the first place, the whole point is to get as many people as possible to the “event” and let the emotions take over. It’s been working for hundreds of years and it will work for as long as people do not take the time to learn the Auction concept.
Experience in Las Vegas Foreclosures Matters
Experienced Las Vegas Real Estate agents know the auction concept game and we also know what agents and banks they represent that are playing the latest games. Obviously, everybody has been chasing the really good deals (too good to be true) and from my experience, it’s the same agents playing the games and then blaming it on the asset managers.
Unless you don’t read the paper or have never read a Las Vegas real estate blog, you’ve probably seen the “feeding frenzy” quotes and the claims of ”multiple offers coming in on properties under $300,000″. It certainly sounds great and it is true, but reality is, that it’s on bank owned properties with extremely low asking prices that is creating all of the attention and the multiple offers that you may be reading about.
For example, a well known REO agent listing a lot of Wells Fargo owned properties is notorious for this and gaining quite a reputation from investment Las Vegas real estate agents in the know. Mention the name and expect a groan. A couple of others have made our list and will probably soon be just as well known in the circle.
For us… our most outrageous experience with this particular group was when we were working for a first time homebuyer three to four months ago and found a great little townhome listed a little above market value. We put an offer in at market value… and waited for the bank response. Only one other offer was in on the property and what did they do? They dropped the price (while two offers were in on the property) $30,000 below market value or $38,000 lower then their original asking price. When we called up and asked why they would do this… supposedly it was a “miscommunication” between their various asset managers and as listing agents, they only do what the asset managers tell them. After all of the other offers come in (obviously many, many more) we get the typical phone call with the “put in your highest and Best offer”.
We knew the value and did not budge. Somebody else came in (as normal) and bid more on the property and the bank accepted their offer. Guess what? Two months later we get a call back saying the deal fell through (probably did not appraise) and the property was available for our buyer.
Obviously though, like many other potential Las Vegas real estate buyers, our first time homebuyer became completely frustrated with the whole process of the games and ended up renewing their lease for another six months. (Sure, we could have advised to put in a higher offer, but continue reading and you’ll understand why we do not advise this in the current market.)
As another Las Vegas Realtor® stated:
“This market has got to be one of the most confusing and frustrating for buyers. Everything they hear has been telling them it’s a buyers market. Then they start looking…make an offer or two and say “WHAT’S GOING ON! my full price offer sat around for 3 weeks and the home was sold to someone else for $40k over list.”
Las Vegas Real Estate Values – Knowing what Market Values Should Be in the First Place
For our areas of specialization, we know the values and when we review the listings, we can spot the game right away — especially when we see who the listing agent is.
The fact of the matter is, there is no shortage of future foreclosures in Las Vegas that will be hitting the market in the coming months. When you know how many Notice of Defaults (first stage of formal foreclosure proceedings) have been filed in the past couple of months, you’ll certainly think twice about putting in offers above market value. Truly experienced Las Vegas foreclosure agents know this information and when you also do Las Vegas short sales as we do, you also have a pretty good grasp of how many Las Vegas homeowners are contemplating just walking away and letting their Las Vegas homes go to foreclosure.
Yes.. homes in Las Vegas are finally selling again since prices have dropped, but the Las Vegas bank owned inventory numbers are not.
Despite all of the sales going on (over 50% of total sales were bank owned properties in my May report –> Las Vegas Real Estate May Sales Report, Bank owned inventory is still going up. Currently it is up to 5,000 bank owned homes and condos on the Las Vegas MLS right now — up from 4,851 from my report on 7/20/2008 –> Las Vegas Foreclosure Homes Report.
TRUST me, I’ve been Extremely tempted to Highlight properties and provide the fax numbers to send the offers to for properties obviously under priced so I can waste somebody else’s time like they’ve wasted ours.
Now that prices are where they are, several people want to buy in this market and IMO, the biggest deterrent is exactly what keeps getting brought up. Las Vegas homes that are fairly priced are not getting the attention because everybody is wasting their time with the one across the street that is listed for an unrealistic price, being advertised that it’s the best deal in town, etc.. etc.. and causing frustration with buyers because they want to chase down the next “great” deal.
Personally, I am seeing stability in certain areas we specialize in.. but obviously plenty of confusion being created because of lack of transparency, experience and/or education in simple economics.
If it’s too good to be true… then more then likely it’s not.
Hopefully this post helps you to understand what is going on when you come across tactics and I certainly Don’t mean to rant.. I just hate it when I see tactics in the real estate business that are equivalent to a third rate used car dealership.
Paul Francis, CRS
Las Vegas Real Estate
702.592.3058
