Friday, February 17, 2006

CA requirement is a little late - comparing February 2004 with February 2006

Life has little ironies, and real estate is no exception.

California buyers agents are now required to tell their buyers that the offers they make are not confidential. The seller and his agent may choose to share the information in your offer, such as the price and terms of the offer, with anyone, including another buyer or agent to entice them to outbid your offer. This information may be important to buyers because it may affect the price and/or terms of their offer. It could also affect what strategies might be used in order to get offers accepted, such as having an offer expire quickly before the seller has a chance to receive another one.

Now that this requirement is in place, however, there may not be many markets that find it useful. Calfornia, New York, and Florida are still in relatively strong sellers' markets, but here in the suburbs of Los Angeles, California, it’s much closer to a normal market in February 2006. February 2004 in Southern California was another story, however, and that’s when this requirement would have been more useful because we had a double-digit number of offers on every property. The highest number of offers on one property that I was involved in was 26. My buyer didn't end up with that property, by the way. In fact, I wrote 15 offers at or above asking price in February 2004 and didn't end up with any of those properties. For February 2006, we have 3 offers written and accepted, all under asking price.

This requirement is just about 2 years too late, but it'll be in place the next time we're in the strong seller's market of the real estate cycle.

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