After years in this business I can't help but reflect on a common theme I hear from buyers, sellers and my esteemed colleagues. The concept and often used terminology of "it's a buyer's market", or "it's a seller's market".
Sales managers love to pump up their real estate salespeople by encouraging them that there is no such thing as a good or a bad marketplace....it's either a buyer's or a seller's market, plain and simple. "Now go out there and sell, sell, sell! Server your clients with this wonderful knowledge! It's a buyer's market! Fight for your buyers!"
I feel compelled to throw a monkey wrench into the gears of this simplistic view of the real estate marketplace.
I believe it is a disservice to our clients to fill their heads with this simplistic viewpoint and pump them up to believing they will get the deal of a lifetime, and they should start with low ball offers simply because it is a "buyer's market". We all want our buyer clients to obtain a favorable deal, get some closing costs, some repairs and maybe even a home warranty in a "buyer's market". However, I believe that after we review the comps and educate our clients regarding the current fair market value, and consult with our clients regarding an intelligent initial offer to purchase, it is wise to embrace a mindset as follows:
Rather than fixate on whether it is a buyer's market or a seller's market, I believe there is a "buyer's motivation to buy" and a "seller's motivation to sell". Beyond that, assuming two parties come to an agreement, the purchase price can be subject to an appraised valuation (especially if a mortgage loan is involved).
I have had a number of listing clients over the years who would like to sell, but they don't "have to" sell. Likewise, they have no intention of giving their home away to someone who presents low-ball offers, who may be suffering from "buyer's market fever".
I've seen quite a few potential deals go nowhere fast, because the buyer's agent says "well, my clients won't overpay in a buyer's market!". I fear this mentality is harmful to the process at hand. If your buyer clients love, adore and must have a particular home because it is perfect for them, and if the seller's motivation to sell is not at all based upon desperation, and if both sides agree to a reasonable and fair price (which is subject to an appraisal), then what is the problem here?
We can best serve our clients if we take the time to first understand their wants, needs & objectives, and then make an honest effort to understand their true motivation to buy, or their true motivation to sell. By doing this, we can help to manage their expectations, and even our own expectations!
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