Philastate – Echos in the Marketplace.
With all of the bad publicity we hear about our recovering, though sluggish economy, it’s easy to see why consumer confidence is very low these days. Bad news is beaten into our psyche every time we turn on the TV, read the newspaper, or go online. As a Realtor, this presents unique challenges for representing folks either buying or selling real estate. It seems to me no matter how I frame the conversation with my clients, and the subsequent facts that I’ve gathered for Mr. or Mrs. home buyer/seller to support what I’m saying, some common responses seem to pop up again and again in today’s marketplace. Here are just a few of the things I hear today when I meet with my buyers and sellers, and the good news behind every scenario:
1) “We need to get this amount of money for this home.”– If there was one statement that I hear again and again, over and over, it’s this. It’s very hard to be the bad cop in this situation, but what you NEED to get, and what you WILL get may be two very different things in this market. As many of you already know, it is a buyers market out there these days, and buyers know it. Even the most pragmatic of Sellers I come across have a hard time believing that their home may be worth significantly less than what it used to be just a year or two ago. For many homeowners, the equity they had built in their homes was their nest-egg, and the shock of not getting the amount of money they once envisioned coming out of the sale of their home is troublesome for many to say the least.
Here’s the good news: Although it may be true that most sellers will not get the price they had wished to get for their homes, keep in mind that most sellers will be purchasing a new home to move into after theirs has sold. The money that you may “lose” selling your home may actually turn into a net gain for you if you are buying a home at an equal or greater sales price than the home you currently live in. You’ll find that you can afford much more house today than you could a few years ago, and there are great deals to be had out there. So for those of you in this exact situation, focus on the positive! There is still a reason to smile!
2) “I’d like to focus on short sales and foreclosures.” – By now, almost all buyers have heard about the short sales and foreclosures taking place in the US, and salivate at the thought of getting a steal on a property that may be worth far more in other circumstances. While this may be true, and short sales and foreclosures can offer a potential buyer some great opportunities, there are a few things to mull over when thinking of buying one of these properties: 1) When you put in an offer on a home that needs third party approval, meaning the Bank that owns the mortgage for the home, the process can be a long one. In many cases, hearing back from the bank with an answer as to whether or not your offer was accepted can take a very long time. I’ve heard of bank responses taking up to three months or more! You may need to provide extensive documentation, and will most likely have some hoops to jump through. 2) When owners lose their home and don’t want to, it does not always make for the best parting of ways from their former home. Owners may let the property fall into disrepair, take things from the property, or even intentionally damage the property, leaving a future owner plenty of work once they move in.
Here’s the good news: Short Sales and Foreclosures can offer a great opportunity for a buyer dedicated enough to see the process through. Buyers, working in conjunction with their real estate agents to try and find that perfect “diamond in the rough” can be rewarded with a great home for a great price. Also, by purchasing short sales and foreclosures, you can help to free the market of sagging home prices due to the volume of Short Sales and Foreclosures. In order to make the housing market strong again, the inventory of Short Sales and Foreclosures will need to dwindle significantly. In the end, not only are you helping other home owners out, you have now helped yourself by getting a great home at a great value!
3) “I want to go in low”– In this Buyers market, many of my clients tell me that they want to offer a low-ball offer and see what happens. Many buyers see the deals that are happening in the market today, and want to take advantage of doing the same thing other buyers are. Since the average sale price of a home right now is about 92% of the original asking price, there may be room to negotiate on any future home a buyer may want. However, all real estate is local, and some neighborhoods or locations are different than others in regards to their demand. A buyer who insists on coming in very low on his/her dream home may be disappointed to find out that he/she lost the home they love to another buyer because they chose to offer a very low price and focused on stealing the home instead of buying the home. Also, there are occasions where a seller may become insulted by an offer they deem to be too low, and may not want to work with a buyer out of sheer spite.
Here’s the good news: For many buyers, going in low with an offer is a good strategy to go by if you’re willing to lose the house you’re bidding on. They’re are many deals to have out there, and much inventory to choose from. If you put an offer in on one home and it doesn’t work out, rest assured their will be another out there worth pursuing. Sometimes it pays to play hardball, and sometimes it does not. That’s why you have a Realtor to guide you in the marketplace!