The Shift in Our Real Estate Market Has Led to Four Changes in How Buyers Approach This Spring’s Home Buying process.
Since May /June of 2018 we saw a distinct change in our local real estate market. For the most part, properties took longer to sell and prices soften somewhat. We are moving towards market equalization. With the Super Bowl behind us, I anticipate that the market over the next couple of months to be more active than last fall but less active than last spring.
Buyers are taking more time to educate themselves about our current real estate market. They are more confident in their choice of neighborhood, their choice in school district and their financing options. They aren’t forced into making a quick decision because they believe the market dynamic is shifting. The fear of losing out on a home and having to pay more for the next one is counterbalanced with a little more common sense regarding their upcoming home purchase.
Sellers should fair better in early spring while buyers should fair better in late spring through summer. Because buyers are more educated and the market is in flux, smart buyers shouldn’t fall for the artificial hype that sometimes surrounds the introduction of a new listing. For example:
When dealing with absurdly low list prices – buyers shouldn’t be participating in listing agent/agent teams attempts to create bidding wars. As the market equalizes, prices and/or activity slows. Buyers understand values based on prior sales and market conditions and know when they are being played. They’ll walk away from a ridiculously low priced home or wait until the property is priced correctly before they become emotionally involved. A knowledgeable buyer’s agent should help guide them.
When dealing with over-priced listings – buyers should wait for sellers to reduce the price of a home before becoming involved. Should a buyer become emotionally attached to an over-priced home and want to pursue an offer, that offer is likely to be incredibly low. Again, a knowledgeable buyer’s agent should help guide them.
When dealing with exaggerated claims of multiple offers/offer dates – yes, some agent/agent teams continue to make spurious claims regarding offers and/or the number of offers. Buyer’s fear of losing out on a home is not as prevalent in a softening market. The fear of overpaying becomes more of a guiding factor.
When dealing with agent representation – Buyers shouldn’t solicit listing agent/agent teams to represent them on their home purchase. With a seller’s market, some buyers believed it was to their advantage to solicit the listing agent/agent team to represent them in the home purchase thinking that they had a better chance at getting the home if the listing agent team “double ended” the transaction. Unfortunately there were listing agent/agent teams who took advantage of this arrangement. Note: dual agency is legal if disclosed properly but it does create an inherent conflict of interest between the buyer, seller, and brokerage.
Note: Double ending a transaction is an inherent conflict of interest regardless of brokerage compensation model. Don’t let anyone tell you that it isn’t.
If you have any questions or comments reach out to me at [email protected] or directly at 650 465-0755. Until next time, Take care!