Below is actual written correspondence I've been having with one of my clients looking to purchase a home in Monmouth County or Middlesex County New, Jersey. This type of exchange is one that occurs regularly with buyers & sellers who are unsure about the state of the real estate market. I am glad we discussed this in writing, so I can share it word-for-word with others who may have the same questions.
CONVERSATION VIA TEXT MESSAGE
December 23, 2008
CLIENT: Hey Amber this is Dxxxxx. I hope you are well. Want wish you & your family happy holidays. Thanks for the anniversary card you sent us. We were shocked you remembered us mentioning that. I know you're a pro with this text message thing but I'm new to this so go easy on me. hahahaha
AMBER: Hi Dxxxxx! Great to hear from you. I was wondering what was going on with you since I hadn't heard any feedback from you on the homes I've been sending you. Are you & your wife still looking to buy a home soon?
CLIENT: Sorry about taking awhile to get back to you. We've been so busy. Decided to put the house search on hold for now. But I know the prices will go down a lot further. When they drop we definitely still want you to be our agent. About to head into a mtg. Will catch up with you soon.
AMBER: Ok. Thx for the msg. I have some valuable info I think you'll want to hear but don't want to keep you from your mtg. Will follow up with you the week after the holidays. Enjoy!
Below is when we resumed our exchange of messages now via email...
January 14, 2009
AMBER: Hope your time during the holidays with your family was the best ever! I'm curious about something you said in your last message to me on Dec 22. Exactly where did you hear that the types of homes specifically in the towns you're interested in will be going down in price soon? Or are you speaking in general terms across the country?
CLIENT: Well that's what they've been saying all the time on CNN, FOX and most of the news channels. Everyday they say that home prices haven't hit the bottom yet and they said things will continue to drop dramatically. So since it's all over the news I know they must be right.
AMBER: Actually prices ARE NOT going down much further in the towns you're interested in like Manalapan, Marlboro, Freehold and Freehold for homes that are in GOOD shape expecially. If you look at the latest statistics from NJAR (New Jersey Association of Realtors), the homes that have asking prices that are continuing to drop are homes that are OVERPRICED and/or homes that are in POOR CONDITION and/or homes that have sellers who are financially strapped (and possibly headed toward SHORT SALE or FORECLOSURE status). The NICEST homes, that look even prettier in person, are priced appropriately and are in desirable locations are selling FAST! When I say "FAST" I mean that in some cases those homes are selling in 30 to 60 days from the day they go on the market. In fact, I've been involved in two "bidding wars" over a couple of AMAZING homes in the past 45 days.
CLIENT: A house selling less than 60 days and bidding wars? Sorry but I have a hard time believing that kind of stuff is happening in this day and time. Mortgages are too hard to get these days and the economy sucks.
AMBER: Everyone doesn't buy a home with a mortgage. Some people pay 100% cash for homes, and unfortunately bidding wars over homes do still exist in certain keys. Don't believe me? Checkout this link.
CLIENT: I hear ya Amber...
Here is our FINAL exchange via email...
January 26, 2009
CLIENT: Hey Amber just checking in again. We've been looking at the listings you've sent. So how's your business going? Do you personally have many houses for sale besides the ones you sent us? Are any selling?
AMBER: Actually my business is going great...Thanks for asking! I currently have 11 homes being listed & marketed by me "for sale" and 4 homes "for rent." I just took 2 additional listings that will be listed for sale beginning Jan 29 & 30. One of the new listings is in KNOB HILL and the other is in LIGHTHOUSE BAY by the South Amboy waterfront. Of the 13 homes I have for sale, I have had multiple offers from buyers on 3 of them and I am currently negotiating new offers I received last week on 4 of the homes. On the sales side, I have a number of buyers I am representing, and a few closings lined up for February & March. Things are looking positive, and I am optimistic they will only get better. :)
CLIENT: Good for you. So what about the houses that are in the high 500's and up? When are those coming down in price?
AMBER: One thing we should always keep in mind is that a place to live is something no human being can do without. So there are ALWAYS going to be millions of people who have a need to buy or sell a home. In some cases more expensive homes may take a bit longer to sell than less expensive homes. The bottomline is that when any house is priced properly (no matter what it costs), and it's in GOOD condition, it will SELL...period!
CLIENT: So then why do I keep seeing prices dropping on various houses?
AMBER: Price reductions in today's real estate market are not an unusual thing, due to a variety of reasons. Here are a few:
- Sometimes a house could've been overpriced initially and finally the sellers get really motivated and decide to price their home to reflect the current market value...So they reduce their asking price.
- Sometimes a house was priced appropriately, but then one or two similar homes in the area sold for less than everyone anticipated, so it brought the value of any subsequent sales down a knotch....So they reduce their asking price.
- Sometimes a seller might have finally found their next home they want to move to and they can purchase it at a GREAT price, but may only qualify to purchase the new home once they have someone who's agreed to purchase their current home....So they reduce their asking price.
So you see, there are any number of reasons why a seller may decide to reduce the listing or asking price of their home. Keep in mind, the list I gave you doesn't even highlight every possible motivator for a price reduction on a home. Each homeowner is different.
CLIENT: Wow. You're making it hard for me to argue with you! What do have a real estate crystal ball or something? hahahaha
AMBER: Really? Hmmmm...that means my crystal ball really does work I guess :)
CLIENT: Ok so tell me this when is the real estate market going back up?
AMBER: All jokes aside....I am so glad you asked me this question today of all days. Here's some GREAT NEWS that just came out today! There is new evidence that the housing market is improving. Today (January 26, 2008, the National Association of Realtors (NAR) reported that existing-home sales posted an unexpected increase in December 2008 as buyers responded to improved affordability. According to NAR, sales of existing homes increased 6.5 percent in December 2008 compared to November 2008. In addition, the inventory of unsold homes fell nearly 12 percent to a 9.3-month supply, another encouraging sign. Need more proof? Take a look at the Trulia Local Real Estate Trends graph in yellow/orange on the right side of this blog page. If you click the link that says "PRICE" you'll notice the prices beginning to creep up in Manalapan and Freehold isn't far behind. Click the link that says "INVENTORY," and you'll notice that the # of homes to choose from is steadily decreasing. Both hold true for Marlboro and Old Bridge as well.
CLIENT: Really? I am surprised by those statistics.
AMBER: Are you? I actually thought you were going to say I sound like a "broken record" considering I've been emphasizing for the past few months that sales have been increasing...lol :)
CLIENT: Come to think of it you have been saying that over & over to us for a few months now. I thought you were just saying that as a realtor sales tactic. To be honest with my wife has been saying she agrees with you. I thought that was just because she's trying to convince me to buy her a new house now instead of later in 2009. But shhhhhh...don't tell her I said that. hahahaha
AMBER: No sales crazy tactics from me. Just the truth. Wow!!! So Gxxx has been acting as my "undercover" co-agent all this time??? lololol :) So does this information give you a more comfort and security to start looking for houses now? I know you two like the best of the best. I'd hate for you to wait too long then wind up competing with a bunch of other buyers in the Spring and not be able to get the best home for the best price.
CLIENT: I am going to talk to Gxxx to see if we can meet with you next week to see 3 or 4 of the houses you sent us. I doubt if she'll say no. hahahaha Thanks for giving me this information. I am not totally convinced that things won't drop a lot more but this has really helped me look at things in a different light.
AMBER: I had dental surgery today, so I will call you to confirm an appointment by Wednesday 12 noon once I'm a bit healed up and can talk. Thanks for keeping me on my toes! Speak with you soon.
Information courtesy of:
Weichert, Realtors (Marlboro ~ Manalapan office)
455 Route 9 South
Manalapan, NJ 07726
917-723-5645 - cell
732-536-4400, ext 199 - office
www.AmberLovesRealEstate.com
;)
;)
Amber,
Sounds like you are experiencing the same thing I am. Last night I just finished negotiating my 4th listing to go under contract in the past week! One had multiple offers. I am still negotiating an offer I made for my buyer on a relocation property last Thursday. Should see today if my buyer's offer stands. I have 3 new listings coming on in the next 7 days and already have an agent ready to see one early. It's like a "drip" campaign I have been practicing since December with my buyers..very similar to what you have been doing with your buyers. The buyers are sure the properties are going to all drop more in price. The statistics are proving that is not the case! Now they buyers out there want to make a purchase with the historic low interest rates and those with cash are hovering ready to make an offer! The market is changing and properties that look good & are market price are selling!