"The SECRET" to efficiently working with Buyers. Part 2 Helping Buyers understand the market

"The Secret" .....Part 2 helping Buyers understand the market
By Greg Perry, Kirkland Realtor
Kirkland real estate

Part 2 of my Series "The Secret" ......to working efficiently with Buyers" , a section of my initial Buyer consultation.

While working with Buyers, I feel it's critical for them to understand basic market conditions.  If they don't understand what is happening right now in the market, or if I don't understand their perspective of the market, when it is time to make an offer, everyone is frustrated.  Here are the basic points I cover with brief explanations:

WHAT IS A BUYER'S MARKET? 
I ask the Buyer," If I use the term, Buyer's Market, how would you define that?" I find most Buyers have a basic understanding, however I've had to teach this concept as well.  Very simply, a Buyer's market is when the Buyer has an advantage in negotiation.  (Too many Sellers, and few Buyers).

WHAT IS A SELLERS MARKET?
Of course, it's the opposite of a Buyer's market, where the Seller has an advantage in negotiation. (Too little inventory, plenty of Buyers)

WHAT DO YOU THINK IS HAPPENING IN TODAY'S MARKET?
I want their perspective.

WHAT'S HAPPENING IN TODAY'S MARKET?
Here I introduce the basics of what is currently happening from my perspective.  We often have two or more markets in our Region depending on the price point.  I use absorption rate charts to help them understand the current market conditions.

DOES YOUR HOME APPRECIATE IN VALUE ON A DAILY BASIS?
I believe it's important for the client to understand that real estate is a market.  With time, the real estate market will go up, but in the short term, the market may flatten for a period or make a correction.  Entry level homes in our region (Seattle's East King County) have gone up for the last 18 years straight, but that is not a guarentee that it will continue every year.

WHAT ABOUT SEASONAL TRENDS?
Again, I show charts to show the Buyer the yearly seasonal cycle of activity.  I stress to the Buyer that the best time to buy is when they are ready!  The charts show us the time of the year we have to work the hardest, and I assure them that no matter when they're ready, we can be successful!

I introduce the idea of "intelligent negotiation".   What I mean by this is, sometimes it's wise to offer exactly what the Seller is asking for.  Sometimes it's wise to negotiate for a steep discount.  And, sometimes it's wise to offer the Seller substantially more than they're asking.  Sometimes it takes every ounce of negotiating skill I have just to assist my clients to acquire a property they desire when it's in the middle of a bidding war!

After this discussion, both my Buyer and I are comfortable that they have a basic understanding of the market.

Next up:  Understanding the Buyer's desires and needs.