"Buyer's market" is a term that is thrown around more often than a baseball on Opening Day. But as frequently as the topic of Buyer's market comes up, I find that there's a good amount of misconception on the part of the consumer on how to handle this environment.
The buyer's market can be defined as a real estate market where there's a large selection of homes available for sale in different price brackets. The selection is vast--but, vast with what? To a REALTOR who's seen a huge amount of inventory in numerous townships, I can accurately report that there's a lot of TIRED homes out there, posing as "great listings", with a smattering appearance of move-in condition homes that are priced attractively below comparable sales. So although there may be a large number of homes to choose from, the newer inventory that's priced well, sells incredibly fast, sometimes with multiple offers on the property.
What happens to the market weary homes? They sit unsold, until someone makes a "lowball" offer. The house may sell for much lower than it would if it were priced correctly the first day. Or, the listing might expire, only to be relisted by another REALTOR who hopefully can present the reality in a digestible form to the sellers.
(NOTE: I admit, my previous paragraph was exceptionally self-indulgent as everyone knows what happens to the tired, overpriced listing.)
What I find to be interesting (and exasperating) is the effect that the term "buyers market" is having on the buyer who is served real estate gloom and doom for breakfast, lunch, and dinner. Besides the media offerings, these buyers will also frequent the "Chicken Little" real estate blogs like crack-hungry addicts.
They're still interested to buy a home. And then, what happens when they find the "perfect" house at a price that's lower than very recent comparables? "Well, it's a "buyer's market" isn't it?" they opine. They make an offer that's $30-50-80K lower than asking. Of course, they're insistent on putting this offer together despite what their REALTOR suggests. And inevitably, there's always another buyer out there who's ready to make an offer that will be accepted.
So the obvious winners are the buyers who purchase a home in superb condition at just below market value. They're purchasing the house to LIVE IN IT...Not to make a killing on it some day and retire to Bora Bora. Maybe they'll make a modest profit on the home, maybe they won't...but the point is to buy a home that they can afford, at a good price, and in great condition.
The other winners are the homeowners who get to move on with their lives, knowing that they sold their home at a fair price to people who will enjoy living there.
Then there are the, well, other people. The buyers who hemmed and hawed while other customers for the home were writing an offer. The buyers who insisted their agent write the offer for much (MUCH) less than asking. The buyers who are now looking at their agent with a very confused expression on their face and saying, "BUT ISN'T THIS A BUYER'S MARKET? This shouldn't be happening!"
There's a surefire place for the lowball offer. Designate it towards the ridiculously overpriced home that's been on the market through the seasons. I've been asked to (and have) written low offers on homes that I knew in my heart could get better and more (and did).
Yes, it is a buyer's market... an opportunity to peruse a large selection of houses, purchase a great home at an affordable price, with a fantastic mortgage rates to boot. Add in a high FICO score, a sizable down payment and the planets have aligned.
Copyright © 2008, All Rights Reserved. "Antoinette" Scognamiglio (licensed as Maria), REALTOR® Associate, Prudential New Jersey Properties, 64 Diamond Spring Road, Denville, NJ 07834. This information cannot be copied, reproduced, transmitted, distributed, displayed or published. All data and information provided on this site is for informational purposes only. Consumers are urged to perform their own due diligence in all matters real estate.
"Antoinette" Scognamiglio specializes in the northern New Jersey markets of Northern Bergen County, Morris and Sussex Counties, in addition to several townships in Passaic County. Please visit my website learn more about my philosophy in conducting real estate business, and also to access the resources I offer to the public at large. My credo is..."The title of REALTOR® should be held with great care or not held at all." Put your real estate transaction in careful hands. Contact me directly on my cell at 201-240-8699 or my Denville office at 973-625-1250, ext. 105.