The current Metro Detroit real estate market as of July 2009
Wayne and Oakland County real estate market
I continue to be busy selling homes in the metro Detroit real estate market. In the last week I have had for closings, and 4 new offers put in. It is tougher to win a bid on low priced Metro Detroit foreclosures if you need a mortgage. There are cash buyers out there. We have lost (out bid on highest & best bids) to cash buyers even up to $100,000. But we are winning them here or there. It usually takes about three or four bids to win a house. This is the usual scenario.
That is simply because at first the Metro Detroit home buyer wants to put in a low ball bid on the foreclosures. I tell them that they are going over list price and I print off the lastMetro Detroit foreclosures that have sold. But they usually don’t listen. So they lose the first one.
Then we go out to look at some more homes. But another bid in a little higher or at list price. We lose that one too. I give them the list of the latest foreclosed homes that have sold in the last 45 days that shows list price and sold price. The home buyer finally really looks at it and realizes that they have to bid higher than list price on good or decent homes.
Then they are in the ball game. The next one the bid higher. Then there is a good to great chance of winning.
This scenario plays out every time I take foreclosure buyers out. They have heard about the great deals that people are buying. So they first think they need to low ball the bid. But finally they realize that these Metro Detroit foreclosures are priced so low that they are great deals even over list price.
I want to scream sometimes but I know that if I am patient the client will learn the hard way. They just don’t know any better. They just met me and don’t have complete trust in me yet. But after a while they realize I am right. I see too many homes in a week and bid with too many clients. I do know the metro Detroit real estate market fairly well. But I’ll be going out next week with new foreclosures buyers and do the whole scenario all over again.
On the reason why a bank goes with a cash buyer instead of mortgage buyer is simple. They know the deal will close and close quicker than a mortgage deal. Some mortgages fall apart and the banks know that so they would rather have a sure cash deal over a mortgage deal. A bank will award to the bid to a cash buyer over a person who needs to get a mortgage to buy the home.
It seems I am all over the place. I have been looking at Northville, Plymouth, and Cantoncolonials in the $300,000 -$400,000 range. Then Royal Oak, Clawson, Berkley ranches in the 100 -160,000 range with other clients. Then I have been looking at Lincoln Park, Taylor,Dearborn Heights foreclosed homes under $20,000. There were over 50 homes on the list this morning. It’s hard to believe that there are that many Metro Detroit foreclosures under $20,000. They need work but they are in decent areas and a great value for a cash buyer.
Of course I have about 10 Oakland County lakefront home buyers that are looking for lake homes that are a deal. It seems that I am looking at houses all over the Metro Detroit area and I am amazed at the bargains. But one perception or myth I am still hearing but not seeing is that people are lowballing the house and getting it. Yes I am seeing up to 10% below list price offers being accepted but I’m not seeing many 20% lowball offers being accepted in the last 30 – 60 days. The metro Detroit real estate market has heated up a little. Many times you have to bid over list price on the inexpensive foreclosed homes in the under $80,000 price range to win them. (We have lost bids even when we bid $12,000 over the list price of $72,000 on a Livonia ranch. We lost a Taylor home by $4500 on a $13,000 list price.) They are over bidding significantly sometimes to win the bid. The homes were both still great deals at the price the other people one them at.
Russ Ravary your Metro Detroit real estate agent
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