Marin County Real Estate: Don’t Believe Everything You Read; The Bottom Is NOT Falling Out
As the avalanche of scary real estate news continues, we’ve noticed a new trend in offers on real estate in Marin: buyers coming in with extremely low offers on property, often in the range of 80% of the asking price. Last night I heard about a home asking $950,000 that received an offer of $575,000. (I would have counseled the Seller to counter at $2.5 Million).
Buyers have a right to offer whatever they want. Sellers have a right to sell for whatever they want. And bottom line, property is only worth what someone is willing to pay for it.
But the reality is that very, very few of these offers, to my knowledge, really come to fruition. As the person making the offer usually says, you never know - and they may be right. Perhaps the Seller will take an offer 20% off the list price. And as a listing agent, I always encourage the offer - because you never know, if the buyer gets the counter offer, they may well sign it, and getting a dialogue going is the first step to a sale.
I just checked the ratio of sale price to list price for a number of Marin markets, and the story is almost exactly the same. This ratio measures how much of a discount property actually sells for - so if it is 90%, that means on average, property sells for 90% of the asking price.
In Mill Valley, for the last six months, the numbers are all in the 96% range. In Greenbrae, homes have been selling for 96% to 98% of list price. In Corte Madera and Larkspur, homes are selling for 96% to 97% of list. And in Novato - the toughest market in Marin all year - average sale price is 96% to 97% of list price.
So the vast majority of the low offers don’t go through. The reason, as noted in an earlier post, is that when properties are overpriced (and plenty of them are!), the typical pattern is that there is a series of price reductions. When the home hits the magic number, boom - off it goes, sometimes with multiple offers.
