Sometimes called the “reverse contract,” the reverse offer is the practice of the seller writing a contract and sending it to the buyer, rather than the other way around. Typically, the contract offers a discount selling price. The tactic is somewhat controversial, but the logic behind using it in situations where you think you have an interested buyer who is dragging his feet on writing an offer might just be the push you need to get negotiations started.

Naturally, you can only try this tactic when the seller is willing to drop the price on the listing. If you have a seller who has gone against your good advice and demanded a high price for their property, a reverse offer may be a tactic to introduce when you feel they’re coming to their senses about the overpriced listing.

One other potential downside is the advantage it may give the buyer in terms of negotiating further on price. When a seller approaches a buyer with a discounted price, it could send the signal that the seller is desperate or in a weak position.

If you want to try and use a reverse offer with your seller’s approval, one way to pitch the idea is to show them how much it might cost them to carry the property an additional 60 days or more. In that time, the property’s value may be declining while they’re losing out-of-pocket money to pay the mortgage, insurance, etc. It might make the reduced price in a reverse offer seem easier to swallow.

Some professionals feel the reverse offer ultimately costs the seller too much, but in a market which demands creative approaches, it’s good to keep it in your back pocket for just the right time.

I read this and found it interesting…comments are welcome.

Release Date: June 23, 2010

For immediate release

Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.

Prices of energy and other commodities have declined somewhat in recent months, and underlying inflation has trended lower. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer-run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly.

New Home Sales Plunge 32.7% in May to a seasonally adjusted annual rate of 300,000 the lowest since 1963 when the reporting began. New home sales is a small part of the overall housing market, accounting for just 8% of homes sold in April.   The 32.7% decrease was also a record. The sharp drop followed two big increases that reflected buyers rushing to market before the tax credit expired.  The decline exceeded what had been dire expectations, and is likely to raise fears about housing. The sector is a sore spot within the broader economy.  Year over year, sales were down 18.3%.  The median price for a new home decreased, year over year, in May by 9.6%, to $200,900 from $222,300 in May 2009.  Inventories of new homes slid 0.5% in May to an estimated 213,000 homes for sale, from 214,000 at the end of April. But because of the severe sales drop the months’ supply at the current sales rate leaped to 8.5 from a revised 5.8 in April.  Regionally, new-home sales plunged 23.9% in the Midwest, 53.2% in the West, 25.4% in the South, and 33.3% in the Northeast.

FOMC rate decision expected at 2:15 today. The FOMC is widely expected to keep its key policy rate–the federal-funds target rate–at a record low near zero for an extended period to revitalize the economy, a decision the central bank has maintained since December 2008.  Investors will scrutinize clues from the Fed on the economic outlook given that many recent U.S. data releases have been weak, including an unexpected plunge in existing home sales and weaker-than-forecast job growth.

Treasuries Rally Before Fed’s Decision as New Home Sales Drop to a Record . The two-year note’s yield dropped to 0.673% Tuesday, the lowest level since 0.662% on May 25, as the bond market rallied on an unexpected plunge in existing home sales, which boosted demand for safe assets. The yield is not far away from its record low of 0.601% hit in mid-December 2008 after the collapse of Lehman.  The five-year auction, the second leg of this week’s $108 billion in new government note sales, is due at 1 p.m. EDT. While the five-year note auction faces some risks as it will be held before the FOMC rate announcement, traders said the demand should be fine as many investors prefer safe assets as the quarter end approaches. Tuesday’s $40 billion two-year note sale was stellar, which was offered at the lowest auctioned yield ever for the maturity.

Lower Inflation Expectations in U.S. Signal No Rush for Fed to Raise Rates A decline in expectations for future inflation in the U.S. signals that Federal Reserve policy makers should be in no hurry to raise rates as they meet today to set borrowing costs.

U.S. House Negotiators Rebuff Attempt to Revive Plan to Audit Fed Policy U.S. House lawmakers negotiating an overhaul of financial regulation rebuffed an attempt by Republicans to revive a measure that would remove the Federal Reserve’s shield against audits of its interest-rate decisions.

Outlook for Home Prices Grows Darker.   A monthly report by MacroMarkets LLC, due for release Wednesday, found that 56% of the 106 economists and other analysts surveyed expect home prices to decline this year. That is up from 40% a month ago.

Bernanke May Get Help From Stronger Yuan in Bid to Buoy Prices, Employment Federal Reserve Chairman Ben S. Bernanke’s efforts to keep U.S. prices and employment from falling may get a helping hand from China’s decision to let its currency gain against the dollar.

Housing Sales Slide Resumes in Threat to Obama’s Stimulus-Driven Recovery The U.S. real estate market threatens to undercut the Obama administration’s stimulus-driven economic recovery as home sales resume their record slide following the end of the federal homebuyer tax credit.

Housing on the Rocks, Make It a Double? Instead of a double-dip recession in housing, this week’s slew of economics reports are likely to point to a long, slow melt.

]]> http://rhettco.com/uncategorized/mortgage-info-update/feed/ 0 http://rhettco.com/uncategorized/15-acre-rv-park-lake-of-the-ozarks/ http://rhettco.com/uncategorized/15-acre-rv-park-lake-of-the-ozarks/#comments Mon, 14 Jun 2010 15:48:08 +0000 Rhett http://rhettco.com/?p=232 Continue reading →]]>

13242 Montana Road Gravois Mills, MO 65037 Spaces: 28+ Price: $725,000 Beautiful Lake of the Ozarks Property, perfect for an owner operator. 28 complete RV sites on 3 +/- acres, with electric, cable, internet, water and sewer and 12 additional acres for development. Well established customer base with 15 yearly customers. Includes 2 cedar cabins (furnished), gift store (very established store featuring Missouri wines and hand made/painted wine glasses), pool, laundry facility, game room and permanent rental home, developed up and running web page, local radio presence, member of Westside Chamber of Commerce and Loco (a local campground organization) as well as members of Woodall’s, Moarc and Trailer Life. Newer owners/managers home with 3 bed 2 baths. Verizon Cell tower on property with 25 year lease, and storage facility. Quiet side of Lake of the Ozarks and conveniently located near Gravois Mills, Laurie and Camdenton. Turn key business with everything updated.

Contact Information:

Rhett Smillie
KW Commercial
2925 E Battlefield Suite 111
Springfield, MO 65804
Phone: 417-883-4900
FAX: 417-447-9775
www.rhettco.com
Email: rhett@smillie.net

]]> http://rhettco.com/uncategorized/15-acre-rv-park-lake-of-the-ozarks/feed/ 0 http://rhettco.com/uncategorized/227/ http://rhettco.com/uncategorized/227/#comments Fri, 14 May 2010 13:23:38 +0000 Rhett http://rhettco.com/?p=227 Continue reading →]]> GE Capital Real Estate
To succeed in this real estate market, investors and managers need a new kind of toolbox. While financial implements are still critical, more traditional tools of the trade, a hammer, paintbrush and the number of a good plumber, for example, have joined them.

As the industry experiences one of the worst downturns in decades, real estate investors and managers are reconsidering strategies for success. Many of them have embraced a back-to-basics approach that provides a path for staying strong in a difficult economy. A key part of that approach: actively maintaining their properties.

Download the full White Paper

repost from:
Larry Culbertson, Regional Commercial Director,CLC Member, Dir. KWC Atlanta, Midtown, Assoc.Broker, Principal, The C Group, LLC