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Seller Beware!
Even if you are living under a rock you can’t help hearing about the real estate market and how crazy it is.
Perhaps if you are a seller, though, it has taken a little bit longer to realize that it no longer is a seller’s market where you get to call the shots.
So seller beware! It is a buyer’s market and the buyers know it.
I was out with a new buyer the other day and we were viewing a great house that was very well priced.
The buyer turns to me and says, “What would you offer on this? My friends told me you should offer at least 10 percent below the asking price.”
I think her friends must have read the same article I have sitting on my desk, written for buyers. The first thing it suggests a buyer should do in this market is offer 10 percent below asking price.
But wait. What if the house’s asking price is already a screaming deal? What if the sellers are completely on board that it’s a bad market and they priced accordingly? Doesn’t matter! Seller beware. It’s a buyer’s market and the media says 10 percent below is the magic number.
But surely if a buyer is willing to put an offer on a home they must truly love it and picture themselves living there. There must be some sort of emotional attachment, right? Wrong! Seller beware. It’s a buyer’s market and decisions are no longer wrapped in emotion. Buyers’ decisions are driven by the best deal they can get – how low they can get the seller to go. I’ve seen many “lowball” offers come through and sellers countering back at reasonable prices (closer to the offer than the asking price) – ready to play the negotiating game and find that middle ground.
But instead of jumping in the ring and playing with the sellers, buyers are walking: “If you don’t meet my price, I am going to move on to the next one. I have plenty of options.”
And let’s suppose you get past this first hurdle of settling on an appropriate price. Then comes the inspection period. Even the age of the home and the fabulous price they negotiated for the home will not deter buyers from asking for every teensy-weensy little repair to be done, and then some.
Typically, sellers are expected to take care of health-and-safety issues, and sometimes deferred maintenance items are addressed. But in this new market where the buyers are in the driver’s seat, they are asking for the stars and the moon.
I recently had a transaction involving a 30-year-old home where the buyer requested every little tiny thing be brought up to excellent, like-new conditions, including the insulation, despite the home’s history of low energy bills.
So seller beware. Many buyers in today’s market expect not only repairs to be done, but upgrades, too!
What can you do as a seller to help make this all go more smoothly?
First, be realistic. Don’t believe that you will be the chosen one to be spared from this. Be prepared for the reality.
Next, have a good agent to help navigate you through the twists and turns of this crazy market. Find someone with good negotiating skills and the ability to hold things together – even if it is by a fine thread.
Also, work with your Realtor to prepare in advance for some of these issues. Price accordingly, and perhaps have some inspections done up front so you know what you’re getting into or to set the tone at the time of the initial offer, communicating a cap on repairs.
It always helps to know your limits in advance and plan your course of action accordingly.
To all you sellers out there: I’m not typically one for jumping on the “doom and gloom” bandwagon that the media portrays, but I think it’s important to occasionally take a ride on the reality train.
Seller Beware! It’s a buyer’s market and buyers know it!
Lara Wells Osborn is a Redding native. After traveling and working around the world she has returned to Redding with her husband and three children. Lara was the No. 1 producer in her office for the first quarter this year and was in the top 7 percent of Coldwell Banker agents nationwide in 2007.
Contact Lara Wells Osborn at Coldwell Banker C&C Properties - Westside, 1801 Buenaventura Blvd., Redding, CA 96001. Cell: (530) 276-3026. Fax: (530) 419-1167. E-mail: laraosborn@ccproperties.com or www.larawellsosborn.com.
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Very good, though I’d like to know what 10% article is being referred to, as it sounds very familiar. Is it something you’d be willing to pass on to me at my listed email address?
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The NY Times had a nice companion article to yours - with a sample perspective from both seller and buyer. Check it out if interested, at:
Dear Home Seller, Dear Home Buyer: An Exchange of Letters
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Good article Lara. What concerns me is that realtors and sellers complain about not being able to sell or get the asking price (a.p.) — even close to a.p. What I have observed is that realtors and/or sellers neglect the yards. Why? Who will give the a.p. if the lawn is two feet tall and the flower beds have been taken over with six feet weeds? We have had two homes in our neighborhood (representing three realtors) that were a disgrace! The neighbors finally contacted the owners and realtors to get the lawns mowed. Then the grass grew back. What about putting some bread dough in the oven a few minutes before a showing so the house smells homey and has a warm and cozy feeling. Little things like this can sell homes. I think that there are realtors and sellers who are not trying hard enough to sell homes.
Keep up the good work.
Kay
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Lara…good article. Over the past few months I have been very active in the sales process, showing 8 different buyers homes. 6 have closed or are in escrow, so we had pretty good luck, ranging in price from $230,000 to $750,000. A couple of things came through, though, and in some cases, it should be “buyer beware”. The big majority of the over 50 homes that I have shown have shown well, but some of them are so totally unprepared to be shown, let alone sold, that, as 1 buyer said, “that home is pitiful”. In a number of incidents with homes over the $500,000 mark, the homes were so overfurnished you “could not see the home for the stuff” in the home. From furnishings to paintings to wall art work, just unbelievalable. In 1 case the large animals in the home were confined to the garage and barked during the entire showing, and of course prevented us from going in the garage or the back yard where one of the dobermans “stood guard”. No way was this guy going in that back yard, nor did the buyers. Priced at over $600,000…not alot of buyers in that range, yet this seller “blew it”. Other sellers try to play “I can hide the lockbox better than anyone else….just try and find it?”.Agents try to deal with this, but some buyers just either insist or refuse to make the lockbox process either difficult or confusing. I looked under enough “lockbox on the gas pipe on the west side of the house under the hot tub deck, and be careful not to touch the poison ivy” type of lockbox definitions to last me a year. And, there was the seller that had on the listing “call owner for an appointment” and no one home. This went on for 2 days, and the out of town agent did not have a key, so we waited. After day 3 finally got in and of course could not go in 2 of the 4 bedrooms due to sick children in bed with the flu, and the parent said as we entered the home, “they have been spitting up all day”. Great setting to show a $500,000 home. The last example I will give, and most of us that have been around for many years could write a book of examples, was with a rural home in the $550,000 range on 5 acres. Just looked great on paper. We got there…no one home…but could tell by the smell as we entered, and as stated on the listing, “dogs in the back yard”, that there were more than just adults in the house. 5 bedrooms and 3 of them were closed….being the diligent, and at times “dumb” realtor that I am, I cautiously opened one of the doors and the smell was “overwhelming” to put it mildly. Moved to the 2nd door….same thing…and on to the 3rd door, somewhat prepared by this time. Fortunately, the buyer couple was at the other end of the home in this “split floorplan” home, but when I opened door 3 I could not help but see right in front of me the “pile” that caused these unbelievable odors. I briefly described what I had just discovered, and we left….the buyer mumbling “disgusting”. I got outside and immediately called the listing agent and she explained that the owners were away for about 2 weeks and that a teenage neighbor came in and let the dogs in and out, fed them, etc. I told her of our experience and she was shocked; said she would get a cleaning company out right away, etc.
So, sellers beware….for there are buyers out there….but you have to do your part to be prepared. Buyers right now are not much different than in normal market conditions….they want a good buy, and don’t we all; they are not easily fooled by amateur attempts to cover up the “bad spots”; most of them have been on the internet and know what square foot values are; most of them have looked, or are looking at a number of homes; and for the most part, are pretty savvy “home shoppers”. They can see through agents that talk like they know the market, but really don’t; they know what they can qualify and afford and don’t need to be given a line on “do you qualify” financially for this home. A number of buyers are looking for that “steal” either through a REPO or a stress sale, but after an explanation that, for example, today there are only 40 repo’s in all of the Redding area right now, they become more realistic.
Yes, sellers beware….but know that there are some buyers out there that will consider your home the “perfect fit for them”, and the deal is made. Win win for all.
Thanks, Ron Largent, Realtor-Partner Owner, Keller Williams Realty, Redding.
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Mr. Largent:
Too funny…and your stories even caused me to feel some sympathy for real estate agents (not an easy thing to do!).
Having bought and sold about 10 properties in the last few years (which involved looking at hundreds of homes) I can relate to your horror stories. Here’s my one piece of advice to sellers–leave the property while it’s being shown. If you can’t leave, at least bind and gag your children. My favorite story in support of this advice: I was looking a home in an area notorious for bad wells. The agent assured me the property had good water. The sellers’ five year old kid pops up during the showing to let everyone know in the loudest voice possible “We’re moving ’cause our water tastes like poo!”
Needless to say, no sale was made that day….
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