In an interesting turn of events, Coldwell Banker is initiating something that retail department stores, car dealerships and grocery stores do all the time.  They’re have a “sale”. It seems that Coldwell Banker has reached an agreement with about 25,000 of their Seller clients across the country to lower their asking prices by 10% for 10 days.

I first heard this story on Marketplace – a radio show aired on local radio station WAMU (88.5 FM) and produced by American Public Media – and I was glued to my radio to get all the gory details.

The concept behind the “sale” is to generate interest and, hopefully, real sales from the fairly significant price reductions.  You have to remember that while 10% off a blouse that costs $49.95 at Macy’s is only about $5, a 10% discount on a $300,000 house is $30,000 – a nice chunk of change.

Can You Buy It At Any Price?

As the Marketplace story points out, price is one thing.  Getting the mortgage to make the home purchase is quite another thing.  That is an important point to understand.  Today, it is not a slam dunk that you will be able to get a mortgage unless you have great credit, verifiable income and money in the bank for a down payment.

Rob Mercer of First Home Mortgage in Silver Spring, MD points out that FHA backed mortgages are still a great alternative for people with very little money for a down payment. FHA doesn’t require a minimum credit score either.  There are a host of other benefits to the FHA mortgage which I’ll go into more tomorrow.

The point is that low prices for homes is one thing – an important thing – but people still need to be able to obtain and afford a mortgage or nothing will change.

One More Thing

It’s important to understand that the offered price for any home is negotiable.

As long as the Seller and Buyer agree to the terms and conditions of the contract of sale there is a “sale”. All the marketing hoopla and media publicity doesn’t change the fact that a Buyer can offer 10% less than the offered price on any home.  It can be Coldwell Banker, RE/MAX, Long and Foster, whoever. If the Seller says “Yes” and  signs off on all the documentation.  It’s a deal!