Have you heard this tender real estate axiom before? “If buyer and seller both feel like they’re getting screwed, then it must be a fair deal.” This horribly depressing statement works on the principle that if I’m not getting mine, at least you’re not getting yours. Take it from me: I’ve been miserable before and hanging out with other miserable people doesn’t make me feel any better.
What could possibly set a homebuyer or homeseller off like that? Well, in this market, it apparently doesnt’t take much. A buyer’s incredulity when a seller refuses to fix nickel-and-dime inspection items; delays in response time (albeit within the parameters of the contract); a seller’s reluctance to allow a showing at a certain time or a buyer who won’t back off their 2-hr window. And on and on and on…
… however, during a testy market, such as the one we’re all basking in right now, the big “diss” usually comes down to price. For buyers, it’s seeing a house with a price tag that’s out of whack with the neighborhood (sellers aren’t serious, hence they won’t negotiate); for sellers, it’s getting a low-ball offer (“Are they high?” is a common refrain from some of my clients). My colleague Betty Jung in Portland, OR has some sage words on this topic, which you’ll find in Betty’s blog, but the answer, once again, lies in what how well your Realtor can read between the lines of a listing. And trust me, it’s not that hard in this market.
SELLER’S LAMENT
As I alluded to in my “This Lovely Market” post, if you’re selling in this market, it’s likely you HAVE to sell, which means that the SALE of the house is the top priority vs. the PROCEEDS from that sale. (Getting in touch with how your house ranks on the market could mean touring the other active listings with your Realtor.) If the comps reveal a $300,000-$310,000 list price, why would you list your house at $325,000? To end up at $310,000? That’s not a great strategy, unless you’ve been keeping up with your updating and you’re presenting a turn-key house to the buying public. Otherwise, when you go market with a stale, overpriced product, buyers can see you from down the block. There’s also no law against holding firm to your price if you feel it’s competitive; just don’t ignore buyer feedback.
BUYER FEAST or FAMINE?
Having been to Las Vegas a few times in my life (when I say few, I mean quite a few), I can attest to the dull ache of “winner’s remorse.” The pain of losing is swift and painful, don’t get me wrong, but I think the syndrome of wishing you had bet more on a winning hand, game or roll is the true business model that supports Vegas. Ever been the guy/girl at the craps table who had the puniest bet during a hot roller’s streak? Everybody around you is raking it in and you’re getting stack envy. So what happens? You get out fo your comfort zone, stop listening to reason and overcompensate to the point where you actually think you understand horse racing. Today’s buyer is not unlike the modest Vegas winner; the market has provided him with a healthy buy opportunity but he’s pretty sure he can squeeze these “desperate sellers” even more.
The problem is that while sellers shouldn’t be angry at low offers on their overpriced house, buyers can’t expect sellers to roll out the red carpet for any offer, especially when they’re priced fairly.
Good Realtors understand how the market has moved and where it’s headed; at least, they’re in a position to react quickly to it. And since the goal of real estate is to sell and buy homes, not win, reacting to the market is a very good skill to have.