Do you remember when you received actual meals on the airplane? (I am not talking about when all the Realtors were flying first class.) On most flights today you can get excited when the peanuts come for a second round and the flight attendant gives you the full can of coke. I told my kids that back in the day we used to get the full can without asking for it, and even had full course meals. Now, because I let them in on the secret, my kids always ask for the full can on the plane, but we still can't do much about the meal.
Our expectations have been lowered and we have accepted it and learned to work with what we are given. Does the same hold true in the real estate market with buyers? Have expectations been lowered and Buyers are just are not getting what they use to get, or should be getting, in regards to their new home's condition?
Not too long ago, when the word "upgrade" in regards to a property's condition was used items such as granite counter tops, stainless steel appliances, and custom flooring were discussed. Having these items would increase the value of the new home, while at the same time, give the buyers a chance to personalize the comfort and enjoyment of their new house. Now the word upgrade is being used in regards to the house's electrical, plumbing, and HVAC systems, energy efficiency, and overall appearance. Perhaps the proposed Cash for Caulkers, which Obama decribed as "sexy", is capitalizing on this trend.
Times have changed with today's market. The market is about to bottleneck with REO listings in horrible condition, nothing is appreciating homes more than time will allow, and the new home is considered upgraded if it has all the fan blades attached to the living room ceiling fan.
Knowing the true condition of most homes in this market, I spoke with an agent yesterday about the condition of properties in today's market and Buyers expectations. Here is how it went down...
"Do you believe Homebuyers in today's market are more concerned about the condition of the property than a few years ago?" I asked.
"Buyers do not care about initial condition, they are signing off AS IS and worrying about the condition later." He responded.
"Have Buyers really lowered their expectations that much in a home's condition? I disagree with your statement. In fact, I believe Buyers care A LOT about the condition of the property they are purchasing." I said.
I then asked my Realtor friend, "What about if the property has a bomb hiding somewhere, do you think the homeowners would just sign off AS IS, I mean, this IS a condition of the property, right?" To which he responded, "But the Buyers do not know that there is a bomb because, as you stated, it is HIDDEN."
"So what you are saying, that Buyers are not concerned about what they can not see?" I asked.
"How can they be concerned about what they don't see? There are a countless number of items that are hidden, and even can go unnoticed in an initial home inspection. In fact, many investors are barely looking at the properties before buying them." He said.
"Really, so, what are some of the hidden items are the homes in today's real estate market?" He figured he set himself up for this one.
"Things like 'discolored' paint masking itself over mold, decks and balcony structures that are not secure, non-permitted room additions with faulty electrical systems...." He went on with a few more, and frankly, I was a bit surprised that he had so much knowledge of these hidden bombs.
So, I changed the original question, "SHOULD homeowners today be more concerned about the condition of the property than a few years ago?"
His response, "Yes... BUT THEY DON'T KNOW THEY SHOULD BE."
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I find Realtors are facing a dilemma in today's market in truly serving the needs of today's consumer.
- How much information should Realtors really tell prospective homebuyers?
- How much information is a Realtor legally, ethically, and morally obligated to disclose?
- How do disclosures change on a bank owned property?
- What are the real needs of the consumer today?
- What things are buyers not being educated on, but should be?
- What things are Realtors not educated on, but should be?
While we are working on the fastest IDX systems and virtual offices, are we missing the big picture when truly serving the needs of our consumers, or should we just keep our mouth shut?
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