The Seduction Of The First Time Buyer

Hi Joni - oh, well, at least the buyers are back out!

It's great that the Buyers are back in the game, a good sign for things to come. I do agree, they think they can buy for 10 cents on the dollar, and they need a dose of "reality". Loads of inventory, but so may strings attached to finally getting it to close. A challenge to agents for sure, but a test to seperate the "men from the boys" (or the "women form the girls")

Re-educating buyers is the hardest part of my job.  First time, move up, investors, what ever.  They all think they can through in some low ball offer and walk away with it.

The streets are paved with gold! See it in the buyers eyes! I'm with a few others, it's a Lenders market!

Unfortunately a lot of these first time home buyers, and non-first time home buyers for that matter, are just giving up and opting to rent.  If the lenders don't watch it they could end up losing this once enthusiastic bunch and having an s-load of properties on their hands again.  Don't get me started either on the underwriters.  Seems they make up new rules by the day.  Good post and best of luck.

First time buyers are the most important cog in the machine.  If they don't, or can't buy, the next level can't buy and so on...which is why it all happened to start with.

Keep it affordable for the first time and entry level buyer and all will be much smoother sailing. When a seller needs to sell they need to sell at whatever the market will allow...the same isn't true for buyers...they can buy either when they can afford it or when they so desire to.  In our area, now is a good time to!

I just had the following question proposed to me with a request to write a response for the California Association of Realtors monthly publication, which I just finished and sent off moments ago.  Then, I check my email and there is THIS post from AR pops up...so interesting!

The question to me was:

"How have you convinced an on-the-fence, first-time buyer that now is an opportune time to purchase a home?"

The following is my Response to CAR:

I have to admit, like many Realtors out there in the midst of this short sale and foreclosure market that we find ourselves in currently, I do see a few very good buys from time to time. 

Personally, I know of several potential first time home-buyers who are chomping at the bit to plunge into the wonderful world of home ownership.  It's nice to see that sort of enthusiasm, especially during such unstable economic times. 

However, I must admit that I have NOT convinced any of these on-the-fence first-time buyers to purchase property, I don't think it's ethical to "Convince" these folks to purchase homes in a climate where we see so many properties still declining in value. 

Now, I understand that this philosophy may not find me popular among other Realtors at the moment, but I feel that we have a fiduciary responsibility to a first-time home buyer to educate them about the possibilities and consequences of a further declining marketplace.  Everyone seems to want to get the contract signed and get the buyer in escrow, but first, I hope each of us has taken time to fully explain to our first-time buyers the cons associated with today's marketplace, as well as the loudly touted pros of home ownership with regards to the current economic climate here in California.

The vast majority of first-time home buyers have worked hard and struggled to save their pennies for a down payment and closing costs, and we have to take a step back and realize that this is hard earned currency, even more difficult to have saved during this financial crises and it is not just some monopoly money that grows on someones tree in the back yard. 

Everyone has the right to own a home if they can afford to own a home, they also have the right to be educated and well informed by their Realtor that this "Marketplace" is just that...a marketplace.  I've watched prices skyrocket over the years, I think we may be entering into a different kind of world when the real estate market does make it's long awaited comeback from the dark abyss that it has entered in to these past years. 

I have to say that when I saw a condominium that sold in 2005 for $359,000 come on the market, now rolled back to a sweetheart of a deal a few months back at just $148,000...I thought THAT must have been the deal of the century.  Then...the next one was sold for $139,500, then another one went for $128,000, and now all the way down to $119,900.  I could not imagine that that condominium would have ever fallen below the $148,000 mark, especially in such a brief period of time.

We all want real estate prices to stabilize, and I believe that will happen...in time. 

Still, in the meantime, lets not spent too much time trying to "Convince" these tender folks into spending their dollars just yet.  And let's not forget that sometimes there just happens to be a pretty nice view from up there on that fence sitting position. 

Broker-Granny

www.ActiveSunshine.com

Buyer's are competing way too much now for this to be a true buyer's market, especially here in Beaumont, California, were REOs (the only game in town, it seems) are slim, prices are baited, and properties get consumed instantly by a buyer/piranha frenzy.

Just like all good housing data is local, local, local so the market local, local, local.  Granted, the 'sellers market' of yesteryear has gone the way of the dodo bird but in our neck of the woods where folks reguarly leave, come back and leave again the market is simply the market.

I like your style, 

Michael

I think many first time home buyers think they can get the perfect house for cheap but after going through the process, reality hits.  The market is really changing here and sellers are not giving as much as they used to.

Hey Joan:  Great post.  We have a buyer who has entered into a deal with that "third party" and so far things are going okay.  The first time home buyers are so excited about their tax credit, but they don't see the time is flying and soon they might just be out of luck, especially if they want to try that one last short sale . . .

Joan the prices are lower than before, however, it seems that the Sellers have many more options than the Buyers do.