Don't panic, I am not ending my love affair with real estate. I will be selling real estate until they put me in a home and even then I am sure I will be trying to get out and take buyers to see houses!!
With the dramatic price increases of 2005 to 2009 and the very strong seller's market, homeowners could sell their properties for glorious profits. When I did listing presentations, sellers were thrilled with my evaluations. I often heard comments like, "Wow, we didn't think our house had gone up that much, this is great!". Often their house sold in less than a week for close to list price. Many times owners received multiple offers that drove the selling price above asking price. Sellers LOVED real estate, buyers not so much. Buyers had to write offers quickly or the house would be gone. Often buyers had to lose a house or two before they learned that waiting meant losing out! Buyers HATED real estate!
When prices started to tumble in 2009 everything changed, as it always does in the cycle of real estate. Quite suddenly the market changed from a seller's market to a buyer's market. Houses were not selling quickly anymore so buyers could take their time to find the right property. Multiple offers disappeared completely and sellers needed to wrap their head around price reduction after price reduction if they truly wanted to sell. Some sellers refused to adjust their pricing and their house sat on the market, month after month with no action. If they were lucky enough to get an offer, it was thousands (and I mean thousands!!) below their asking price and if the sellers did not reduce their price, buyers walked away and looked for another proeperty and there were lots to choose from. In a buyer's market inventory soars as homes do not sell and more keep coming on the market. The only houses that sell in a buyer's market are the ones that are priced to sell, not priced on what the seller needs to get out of the deal. What a seller paid for the house, how much his mortgage is, how many debts he needs to pay off is of NO concern to a buyer. What the house is worth in this market, at this time is the only factor for a buyer. It is a huge adjustment for sellers and one that many missed out on. I know many sellers from 2009 and 2010 that are kicking themselves for not taking a good offer then and finally taking an offer in 2012 for thousands less. They simply did not face reality quickly enough, and I tried really hard to educate them. This continued from 2009 until last year.
Well guess what folks, the cycle has changed again as it always does and always will! In the last two weeks, of the six offers I have written, 4 of them went into competition!! When I set up showings for my buyers and I call 6 realtors to make appointments, 3 of them have accepted offers, and they have all been listed for less than a week. When I write an offer with my buyers, the ink isn't even dry when I get the call from the listing realtor, "We have another offer, you are in competition". The market has changed, it is once again a seller's market!
Now it is buyers that need to face reality. Offering 10% less than list price, is not working. You will probably get a counter offer back at full list price and told to get serious. Sellers don't need to reduce 10% to get their home sold. Taking your time to think about writing an offer for a couple of days is not working, the house has sold! Being in competition is probably going to happen, be prepared. Many buyers tell me, "I don't like competition, I am backing out". Of course this is your choice but it is probably going to happen again with the next house. Be prepared!
And next year will be even worse (or better), depending on whether you are a seller or a buyer. BUY NOW, PRICES ARE GOING UP! So many times, buyers say to me "If I had only known the market was going up, I would have bought sooner". Let me clear that up for you...the market is going up! If you are a buyer out there shopping for a house, look at list prices as sale prices because they probably are the same price. Educate yourself on the competition process and be prepared to go through it. The stress comes from being unprepared and caught off guard. I will show you how to make that work for you but you have to be willing to step up to the plate and realize sellers are in control again. If you don't accept the reality of a Seller's market, you will lose out.
So this is my new job, educating and preparing buyers and getting them to accept this new reality. Good bye sellers, educating and preparing you over the last 5 years has been fun but my work with you is done!