This is a buyer’s market, but that doesn’t mean sellers are always going to cooperate.  More often than not in this market sellers are not wanting to cooperate.  It may be a buyer’s market, but some sellers are fighting that reality and behaving as though it is a seller’s market.  You would think all sellers would realize what a buyer’s market means, but I can tell you that some sellers are behaving as though buyers are a dime a dozen and that they can demand a higher than FMV price or any terms they want, even if it is unreasonable in this real estate market.  This article is the fourth in a series entitled Buyer Tips in a Buyer’s Market.

Buyer’s Market Reality

Buyer’s Market Not Seller’s Market

I sat with clients today talking about the value of their home and what they might be able to net if they sold it.  We looked at comparables that have sold, and we looked at active listings that are comparable.  We discussed how many days these homes have been on the market (DOM), first for the ones that have sold and then for the active listings still on the market. For the homes that sold I brought out the data sheets showing what the original listing prices were and what the final selling prices were.  All of this information is invaluable in understanding this buyer’s market, and it is important in determining a reasonable listing price in the very beginning.

Buyer’s Market – Pricing

We discussed a home just coming on the market that is comparable and the listing price.  It is listed at what I believe is several hundred thousand above fair market value (FMV).  This is a disastrous seller mistake, and it is a disastrous listing agent’s mistake.  Here’s why.

A home that is grossly overpriced when it first comes on the market will lose some buyers right in the beginning for all the months it is overpriced.  Those buyers search the MLS online based on their maximum price.  A home that is priced substantially over FMV will never capture the eyes of qualified buyers who would look at it if it were priced at or closer to FMV.  Since buyers are few and far between, loosing a single buyer could mean not selling the house for a year or longer in the higher price ranges.  Those buyers will buy other homes, so they are lost to an overpriced seller forever.

There’s another disastrous result in a buyer’s market for a home that is substantially overpriced.  It disappears from the radar for other real estate agents.  Agents who walk through a home that is clearly overpriced will mentally remove that home from their radar entirely.  They know their buyers will not pay that ridiculous price, and so they won’t waste their client’s time or their time.  If agents show an overpriced home, it is to persuade their buyer to buy the other home they are about to view with a substantially lower price.  The longer a home is on the market at a grossly overpriced home in this buyer’s market, the more stale it will be.  Like stale bread, no one wants it anymore, and no one even wants to look at it.

Here are two bits of trivia for you.  Many sellers who are getting advice from agents who overprice their listings do not understand any of these issues and have no idea that their home will suffer these disastrous consequences and grow stale on the market.  This comes from 37 years in the business and talking to hundreds of sellers over the years.  The other fascinating aspect of an overpriced listing is that the listing agent never gets paid.  Isn’t that interesting!  He or she wastes time (maybe several years) and money listing and advertising a property without ever selling it and earning a commission.  That’s just plain crazy.

My buyer tip in this buyer’s market is don’t waste your time looking at homes that are way over priced.  The sellers are not in touch with reality, and they rarely are willing to negotiate reasonably with a buyer who is in touch with reality.  This is a buyer’s market–not a seller’s market.

Possibly Related Posts:

• Port Ludlow Real Estate
• How Listing Prices Affect Offers
• Real Estate Without Offices
• Sequim Real Estate Broker – Attorney Still Giving It All Away for Buyers
• Sequim Buyer’s Agent – On a Mission for Clients

This is the third in a series of Buyer Tips in a Buyer’s Market.  Sellers are making some big mistakes in this market, and a buyer who is fully informed and knows how to intelligently negotiate will have a huge advantage in this market.  In part 2 of this series of Buyer Tips, I wrote, “Some listing agents are making huge mistakes in negotiating the price and terms for their selling clients, and sometimes these mistakes rise to the level of sabotaging their own clients’ transactions.”  If you’re going to negotiate the best possible price and terms on the purchase of your retirement home in Sequim or Port Angeles, it will be tremendously helpful if you know what sellers and their agents are doing and not doing in the negotiating process.  As they say, knowledge is power.  The purpose of this series on Buyer Tips is to give you power when you are negotiating.

Buyer Tips from Seller Mistakes

True story.  Clients hire a buyer’s agent and make an offer on a manufactured home on a couple of acres.  The listing price is a little high, probably $35,000 above fair market value in this market, and that’s being generous to the seller.  The house was listed at a price just south of $300,000 and the buyers offer was very reasonable.  The earnest money check was written for $1,500.  There were several standard addendums, including a home inspection addendum, a well and septic inspections, and a financing addendum.

(more…)

Possibly Related Posts:

• Sequim Buyer’s Agent – On a Mission for Clients
• Do You Know About Buyer’s Agency?
• Character is Everything
• Sequim Buyers Agent Sells The Most Homes in 2011
• Sequim Real Estate Broker Writes Book to Help Realtors

Buyer Tips in a Buyer’s Market.  This is the second in a series of articles that will give buyers insight into the mind of a seller and their agent.  See part one at Buyer Tips in a Buyer’s Market Part 1.  In the first article I wrote, “Sellers must have listing agents who are extremely good at three things:  marketing the listed home for sale (using the right technology, advertising, photos, and videos), persuasive sales (written and verbal), and negotiating the price and terms.”

I’m going to address these three topics in reverse order, starting with Negotiating the Price and Terms.  This single issue  of negotiating mistakes in this buyer’s market has the greatest potential to hinder a buyer, not to mention kill the transaction for a seller.  But if you know the way some sellers and their agents are thinking, if you know the misconceptions they have about negotiating the price and terms, you can have the upper hand in negotiating.

Some listing agents are making huge mistakes in negotiating the price and terms for their selling clients, and sometimes these mistakes rise to the level of sabotaging their own clients’ transactions.  Do they intentionally sabotage their own transaction?  No, they do not.  After all, they earn no commission if the deal does not close.  Perhaps the best way to make the point is by sharing some examples of how a listing agent sabotages the sale of their own listing, and we’ll look at how this effects you as a buyer.

This is a Buyer’s Market Not a Seller’s Market

A retired couple from Arizona decided to write an offer on a home (somewhere in the Northwest) that was about 30 years old and located way out of town, about a 30 minute drive from the nearest town.  It is remote enough that very few retirees even look at homes this far out of town.  This is not a modern home, and it doesn’t compare to the gorgeous modern kitchens of newer homes.  This would be a tough listing to sell, but one thing I can say with great confidence:  this home must be listed at a very reasonable price, because the buyers for this home in this remote location are few and far between.  Literally, this seller might only see one qualified  and interested buyer once in three years.  And to state the obvious, this is a buyer’s market, not a seller’s market.  (more…)

Possibly Related Posts:

• Port Ludlow Real Estate
• How Listing Prices Affect Offers
• Real Estate Without Offices
• Sequim Real Estate Broker – Attorney Still Giving It All Away for Buyers
• Top 20 Sequim Real Estate Posts of 2011

Buyer Tips in a Buyer’s Market.  This is the first in a series of articles that will give buyers insight into the mind of a seller and their agent.  After hundreds of transactions as a buyer’s agent, I’ve recognized some common patterns, and I’ve decided to share these patterns with my readers who are primarily buyers.  The purpose of this first article is to make you as a buyer aware of the importance of what I will share about sellers and their agents and how you can benefit, sometimes by $10,000 to $70,000.  But the benefits to you are far more than just money, although that would be reason enough to know these things in a buyer’s market.

It is a Buyer’s Market

A significant number of sellers and their agents are repeatedly making the same mistakes, and if you are aware of these mistakes in this buyer’s market, you can take advantage of them.  Sellers are experiencing a lot of pain right now.  Many are having to sell their homes at losses or for so much less than they had hoped.  And many more sellers are frustrated that their homes have been listed for sale for one or two or three years and still have not sold.  This is a critical time for sellers.  They are under great financial stress, and many absolutely must get their homes sold.

Clearly, sellers must have listing agents who are extremely good at three things in a buyer’s market:  marketing the listed home for sale (using the right technology, advertising, photos, and videos), persuasive sales (written and verbal), and negotiating the price and terms.  It is a sad fact in reality that many sellers do not have agents who are extremely good in all of these areas.  It is especially unfortunate, because the sellers are the ones who lose out.  I can almost guarantee that these sellers don’t even know why their homes haven’t sold or why that last offer blew up and the buyers walked away.  Some think they know, but they don’t.  After 30 years of getting inside buyer’s and seller’s heads, I have a pretty good idea of how the conversations go between sellers and their listing agents.

Buyer’s Market and Sellers

By the way, you might wonder why I don’t share these things with sellers if I can help them.  The answer is I primarily represent buyers, but in addition to that sellers are not asking me.  I find it fascinating that buyers are using the Internet extensively but sellers are not.  Buyers are doing their due diligence in their research for their next home and who they hire as their buyer’s agent, but sellers are not doing research on their listing agents or how their homes should be marketed or the huge negotiating mistakes that are being made.  If I am correct about this, and I am, it becomes even more incumbent upon sellers to carefully choose a listing agent who is knowledgeable, competent, experienced, professional, and trustworthy.  But I can say with some confidence that the vast majority of sellers simply don’t know how to select an agent.  They just assume the agent they call has all these qualities.

Buyer’s Market and Agency

I represent a select number of selling clients, but even then I never act as a dual agent for a buyer and seller.  Read more about why I only represent one client at a time and how buyers get the short end of the bargain in Dual Agency.  Not everything I share about how sellers and their agents think will help you negotiate a better price in a buyer’s market, but if you as a buyer have a better understanding of what is going on with sellers and their agents, you will be far more likely to get the better end of the negotiations.  I want you to win your negotiation on both price and terms and end up in a far superior position against a seller.

Does this make sense?  This is foundational thinking for the true stories I will share in this series.  The next article will drill down on the important subject of negotiating mistakes and tips for buyers in a buyer’s market.

Possibly Related Posts:

• Port Ludlow Real Estate
• How Listing Prices Affect Offers
• Real Estate Without Offices
• Sequim Real Estate Broker – Attorney Still Giving It All Away for Buyers
• Sequim Buyer’s Agent – On a Mission for Clients

We are in a buyer’s market with the real estate market collapse.  While that might be obvious, it is much more of a buyer’s market than many realize.  This is what I would call a Super Buyer’s Market.  But it’s not a buyer’s market for any buyer.  Mortgage financing has gotten much more difficult to obtain for new home buyers or buyers with low or even average credit scores.  However, for the buyer with a high credit score and high income and low debt, or even better, buyers with cash, this is a super buyer’s market.

Buyer’s Market in Real Estate Collapse

Buyer’s Market Offers Opportunities

Buyer’s have a unique opportunity right now in Sequim and Port Angeles.  If they are pre-qualified or buying with cash or a very large down payment and good credit and income, they can buy a home below the current fair market value, which is already below the highs of 2005 and 2006.  And if you want to know where some of the best buys are right now, I’ll tell you they are in the higher priced homes.  Homes priced above $600,000 are typically $100,000 to $300,000 below their highs.

Buyer’s Market – Timing is Everything

It may be a buyer’s market, but timing is everything.  It always is.  A buyer looking for a quality home with a great water view, for example, may be in a buyer’s market, but that doesn’t mean they have all the time in the world to buy.  There aren’t very nice listings with great water views, and the best ones are being purchased buy buyers at a rate of about one a month.  Once that nice home is gone, it’s gone for a long time.  This tells me a buyer can’t fool around once they find the ideal home, but it also tells the buyer they can negotiate a very reasonable price.

There is a huge trap for sellers in this market, and I see a seller make a mistake and chase a buyer away about once a month.  When a seller has a buyer who is serious and wants to write an offer, that seller should not start laying down conditions as though this was still a seller’s market.  It’s not, but I have seen several sellers start laying down conditions about closing dates or other details, and buyers in this market simply walk away.

There is one appropriate answer for a seller who has a serious buyer, and here it is:  “How soon would you like to close and how can we accommodate your inspections between now and closing?”  Any other response could literally kill the transaction, and in this market a seller might not see a buyer again for one or two years.

Sellers don’t have to be discouraged, because there still are qualified buyers for nice homes in nice areas that are listed at reasonable prices.  Just be sure that when that one buyer in a hundred comes along that you don’t say or do the wrong thing and chase that buyer away.  I’ve spent a lifetime learning the nuances of not chasing clients away, and putting transactions together so that everyone wins.  This is what I do, and I love doing it.

This is a buyer’s market like none other.

Possibly Related Posts:

• Sequim Washington is Growing
• Buyer Tips in a Buyer’s Market Part 3
• Lowest Mortgage Interest Rates in 50 Years
• Do Sequim Realtors Say It’s Time to Buy?
• What the Market Crash Taught Me About Real Estate

It’s a buyer’s market in Sequim, Washington (and in Port Angeles), and if ever a buyer had the advantage, it is now.  There are five very clear reasons this is a buyer’s market right now on the Olympic Peninsula:

1.  It’s winter, and these next few months are the slowest time of year for selling real estate.  If you are a qualified buyer and you make an offer on a home, you will definitely have the seller’s attention, who will understand that if he is serious about selling, he must carefully consider your offer.

2.  The inventory is large.  Buyers have choices now they didn’t have in 2005 and 2006, when houses were selling like hot cakes.  But this doesn’t mean that buyers have all the time in the world to dilly dally, because the best of the best homes are selling.  I’ve written elsewhere about how buyers are cherry picking the best homes.

3.  The IRS buyer’s tax credit will not last forever.

4.  Interest rates are at or near a historical low for the past three decades, and that will not last forever.

5.  Sellers are motivated.  They’re motivated not only because of the time of year, but because many wanted to be moved before winter, and they are not.  Some are motivated for financial reasons.  They’ve made other plans, own another home in Arizona, and it’s time to sell this home and get out from under a second mortgage payment.

If you plan to buy a home or land in Sequim or Port Angeles next spring or summer, may I make a bold suggestion?  Buy it now and save a lot of money.  The competition next spring will be substantially greater than it is now.  You will be in a much stronger negotiating position  in the midst of winter compared to the hot spring and summer market, and that would be a good thing.  Right?

Search the entire Sequim MLS and Port Angeles MLS here.

Possibly Related Posts:

• Sequim MLS Listings Way Down
• Sequim MLS
• Search All Sequim MLS Listings (both OLS and NWMLS)
• Sequim Happy Valley
• Sequim Listed Homes for Sale