In the early 1990’s I represented the Resolution Trust Company (RTC) in the sale of many of their Los Angeles foreclosures (reo’s/real estate owned).  One interesting story concerns a home in La Canada which I had listed for sale.  The RTC had an interesting way of conducting business. After a home was on the market a certain number of days, the home was reduced, not the price reduction recommended by the listing agent but reduced by a formula/calculation.  Often the calculation resulted in the home being priced too low.  The RTC did not encourage multiple offers but preferred to negotiate one offer at a time.

This particular home had initially listed at an asking price too high for the current (1990’s) market and after the prescribed time (perhaps 60 or 90 days) there was a 20% price reduction.  Immediately I had a handful of offers, but the RTC (a government run company) had their own way of doing things…. And it was not by multiple offers, but rather to deal with each offer in the order they were submitted to me, the listing agent. 

The first buyer who wrote their offer was in the driver’s seat, the property was now priced 10% below market.  How do you mess up this opportunity? By being a fool; and that is exactly what the first buyer was; they decided that even though the asking price was 10% below current market value and that there were a handful of other offers, that they would offer less than asking price.  They wanted to see if they could negoitate a little more; they felt they were in the driver's seat and would at least get a counter offer.



Kaboom…. the asset manager stamped their offer rejected; there was no counter offer and the 2nd offer which happened to be my client's offer was up. My clients were not clueless and offered the full asking price. Today, my clients remain in the same home and we continue to giggle over the the first buyer (offer #1) who missed this opportunity.

Los Angeles homebuyer’s take note; the home you purchase today will likly be purchased at today’s market vale. If you are fortunate enough to buy a home which has been overpriced and on the market for a bit, you might get a real estate deal.... but well priced homes continue to sell, some quickly and some for over asking price.