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It is a Buyer's Market, have we bothered to tell our sellers?

By Kimberly Lang

Real Estate Agent with Keller Williams Fort Myers & The Islands

July 27, 2007 01:38 PM

We all know it is a buyers market, Katie Couric, a.k.a. CBS's Real Esate Guru, told me so on the CBS evening news a couple nights ago. So has every other media outlet. All the Realtors know and so do the Buyers, but has anyone bothererd to tell the sellers yet?

Obviously, the sellers also see the news on TV and in print so they "hear" it, but has anyone really told them what that means to them?

Have you sat down with your sellers and talked about assisting buyers with closing cost, paying for home warranty's or taking an offer even though it may not be the ideal, but it is nonetheless an offer? Have we told them their home is one of thousands to choose from and the buyers are looking? Do they understand that lending quidelines are tighter now and that an offer from a person who actually has a good enough credit score is nothing to shove out the front door because the thought of paying some extra's is out of the question?

I personally am working with 3 active buyers. They know the market, but seemingly the sellers are oblivious. My buyers are prequalified, ready to buy and KNOW there are less of them and many more sellers than there was 2 years ago.

My goal over the next few weeks is to have dialogue with every single seller and explain to them that if they are fortunate enough to have a person pick their home over the 20,000+ other available ones in my county, they should see that buyer as a friend, not a foe.

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FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com

Northern Virginia Homes - FRANKLY REAL ESTATE Inc - Arlington, VA

One of the problems is NAR's ads that say "Now is the time to Buy and Sell"

Kind of like Merrill Lynch saying. "Now is the time to buy and sell GE stock"

Jul 28, 2007 04:57 AM

Verity Mora

Century 21 Complete - Battle Ground, WA

2 of my listings are very aware of the buyers market. However, they are of the breed that still believe that their home is worth what it was 2 years ago. Here is how I have it handles, it may not work for all, but it has worked for me because these 2 people aren't in a particular hurry to move, but need to within the next few months because they have purchased other properties. Luckily, their time-lines gave me plenty of room to start!

I worked the market analysis and explained the "average listed" and the "average solds". It's ok to be in the ball park of average listed at first to test your footing, to find out if you will even show in that range. But if we sit on the market for a month or even 2 weeks, and no one calls, thats the indication that buyers are expecting a lot more "house" for their money. It's not an insult to you, or your home, its just what is happening right now.

My people, young or old, seem to understand the concept of testing the market, stretching their time-lines, and seeing for them selves what could happen. This way I am not telling them their home is over priced, the PUBLIC is telling them they are over priced!

In that respect, I have reduced both homes to have great "competitive edge". My premier home was set to reduce by 20k this week, and I would renew the listing with a new RMLS# to freshen it up. Looks like I don't have to though! I am expecting an offer this afternoon, and from what I understand it will not be too far under asking.

Jul 28, 2007 04:59 AM

Anonymous

Angelica Blatt

This is a great post! Maybe someone could email this post to all sellers.

Jul 28, 2007 05:39 AM

#31

Joe Sampson

Exit Realty Experts - Saint Augustine, FL

Great post - I know EXACTLY how you feel. Also, I do have these talks with my sellers and some of them simply refuse to listen. As long as their willing to let their home sit on the market for a while, that's fine. It's the ones that want it to sell TODAY, not reduce the price or offer any buyer incentives are the ones that have to be set free(aka cancelled)! :)

Jul 28, 2007 06:25 AM

Suburban Chicago Illinois Real Estate

Suburban Village Realty - Barrington, IL

I have to agree with Robert on this one. There are so many new home incentives in Las Vegas and Chicago right now, it's hard to even keep track -- especially if you don't use Salestraq.

With so many homes, you want to be priced in the bottom 1%. Our experience shows that buyers will not make it to the 12th highest priced home on the price range that meets their criteria. Incentives such as closing costs, etc.. will be negotiated by a capable buyers agent anyways.

Jul 28, 2007 08:04 AM

Debbie Cook

Long & Foster Real Estate, Inc - Silver Spring, MD

Silver Spring and Takoma Park Maryland Real Estate

I tell my sellers NOT to be INSULTED by ANY Offer, no matter what it is for. I tell them that it takes a lot of guts, is time consuming and even scary for a buyer to even WRITE an offer (our typical contracts and addenda are 50+ pages of legalese) I tell them to be glad someone wants their house enough to GO THROUGH ALL that writing a contract involves.

Jul 28, 2007 08:47 AM

Anonymous

Paul & Michelle...

There may be new home incentives but for the first time home buyer in my area under 200,000, they many times need help with closing costs. The sign of a capable agent negotiating can and has been stopped many times by an ill-informed/hard headed/delusional seller.

You can lead a horse to water, but you can't always make him drink...you may salt the oats and still he can be too hard headed to take a drink.

Jul 28, 2007 10:05 AM

#35

Anonymous

for paul & michelle

previous comment was for Paul & Michelle not from them

Jul 28, 2007 10:12 AM

#36

Teresa Bills

Signature Realty Associates - Riverview, FL

I love how the media experts continue to forecast the turnaround in real estate. Let's see, the first prognostication I remember hearing was for early 2007, then late 2007. Recently it has been early 2008 and in a few months, it will become late 2008. The same thing happened with the predictions of a bursting bubble for real estate a few years ago. Throw a dart, then another, until it happens. Anything to keep a story alive, I guess.

Jul 28, 2007 10:49 AM

Kimberly Lang

Keller Williams Fort Myers & The Islands - Fort Myers, FL

I can only speak for MY area & MY opinion...

I see it staying this way around here (sw Florida) until 2010......Now I'm sure to get reaction out of that, I am simply basing that on the following factors....inventory, length of time to absorb said inventory, new home competition, rates, prices, the economy in general , global warming, Lyndsey Lohan's trial date and last but certainly not least...Who shot J.R.

Oh wait, I already know that outcome.

Jul 28, 2007 11:02 AM

Tina Abraham

Coldwell Banker Seacoast Realty - Wilmington, NC

Broker, SRS, Realtor, Wilmington NC Luxury Real Estate

It has taken awhile for this to sink in. But finally they have decided to believe me and with some persuasion have dropped their prices....and to only realize their home sold.

Jul 28, 2007 11:05 AM

Jennifer Monroe

Indigo Home Team powered by Compass - Charlotte, NC

Real Estate REALTOR®/Broker/Designer

Denial is the word of the month in my practice. Sellers believe the reason their home hasn't sold is everyone's fault but their own. I maintain the simple notion that wherever the problem may lie - buyer's market, poor location, too much inventory - it can all be cured by price.

Wake up sellers! Lower your price, consider concessions and the buyers WILL come.

Jul 28, 2007 11:12 AM

Julie Olsen - Park City Utah Realtor

Equity Real Estate Luxury Group - Park City, UT

If I can I've been trying to present my buyer client's offers to the seller and their list agent in person to help explain the situation that exists with higher inventory levels of property for sale and fewer buyers. Sometimes the list agent may not be comfortable.

Jul 28, 2007 04:22 PM

Robert Kerr

Kerr Financial - Warwick, RI

Plasma TV's may be a "gimmick" however, closing costs for the first time homebuyer is as real as it gets to me.

Price reductions are as real as it gets. If the seller's willing to pay $20K in closing costs, have them reduce the price by $20K instead. You'll get a lot more traffic.

If a buyer doesn't have closing costs, that's a big red flag that they're deadbeats. And if the seller is paying the buyer's closing costs without telling the lender, you are all on thin ice. That's arguably mortgage fraud.

Jul 28, 2007 04:46 PM

Doug Lindstrom

eXp Realty - Loveland, CO

All great points but the buyer's do have a tendency to hold anything and evrything over the seller's head. Oohhh, that's right, the seller's had their turn already. The situation we are in now gives new meaning to the phrase, "buy low and sell high".

Jul 28, 2007 04:57 PM

Kimberly Lang

Keller Williams Fort Myers & The Islands - Fort Myers, FL

Robert....

Who said anything about NOT telling the lender? I am on NO thin ice. I completely disclose and with the programs I am using the sellers can contribute up to 3% of the price of the home for closing costs.

Make no mistake about it... I am an honest Realtor, and value my license! I do not partner with mortgage people who break the rules.

Perhaps in your neck of the woods first time home buyers have 7,000 for closing costs. In my county the young recently married couple has not saved that up yet. I am certainly not going to turn away a buyer based on that and don't consider them deadbeats or a big red flag.

Somep buyers maybe "holding it over their heads" that is the nature of people, the market is cyclical. The Realtor should step up to the plate and negotiate without strong arming.

Jul 29, 2007 02:06 PM

Robert Kerr

Kerr Financial - Warwick, RI

Perhaps in your neck of the woods first time home buyers have 7,000 for closing costs.

A buyer without closing costs to cover the transaction should not be buying a house. If they can't afford $7K for closing. how on Earth can they afford property taxes, insurance, repairs, upkeep? What happens when the roof needs repairs?

As an ethical realtor, which you appear to be, you should be asking these questions. Why are you trying to put deadbeats who can't even pay closing costs into houses? Tell them to save their money and come back in 6-12 months. Prices aren't going up in Ft. Myers. That $300K home will be $260K-$270K this time next year. Wouldn't yuo feel better if they came back next year, better qualified and then bought?

Don't be "that Realtor" who places closing the deal above morals. We already have too many of them.

Jul 29, 2007 03:31 PM

Kimberly Lang

Keller Williams Fort Myers & The Islands - Fort Myers, FL

With all due respect, you run your business up North and I'll run mine.

To cut to the chase, I don't need you telling me not to be "that Realtor", I rest well at night with my morals, it is well with my soul, and in this market (remember the posting..."It's a buyers market have we told our sellers" Perhaps I should have included " And a few Realtors" as well.

Jul 30, 2007 01:37 AM

James Gordon

Sibcy Cline Realtors® - Cincinnati, OH

REALTOR, PBD SFR SRS

It never hurts to tell your sellers about builder incentives in the area.

Jul 31, 2007 12:31 AM

Danielle V. Lewis

DDR Realty - Newburgh, NY

DDR Realty

I agree with you...People only tend to remember the positives of something; it's human nature. Buyers usually don't want to hear that things currently aren't in their favor. By educating them of the changes and why they've occured, we have better chances of ensuring smoother transactions.

Jul 31, 2007 12:58 AM