In the recent weeks, we have been writing a lot about the hot and heavy real estate market. In case you missed the news, it’s a full-blown seller’s market in the lower price range and inventory no matter the price is at historic lows.
Putting a home on the market and getting it under contract is not the hard part these days. My team is spending so much of their time, effort, and knowledge behind keeping deals together. You see, getting the deal is the easy part, getting it to close is the hard part. Now you may be saying to yourself, “Why would that be hard in this market?” Let’s meet two people called Emboldened and Entitled, and we’ll follow their story as it unfolds.
A buyer has written offers on three, five, or ten homes and did not win the bidding war on any of them. By the next go around, he and his agent structure the deal to make sure that they win this one, complete with over asking price, escalation clauses, post occupancy agreement and more. Congrats, they win! About a day or two after getting under contract, the buyer wakes up one morning and says, “What have I just done?” It’s also known as buyer’s remorse. In some cases, they terminate the deal on the first few days. If they stay in the deal, they turn their attention on the upcoming inspection. Once they get the inspection report, they turn in their inspection objection to the sellers that reads as long as War and Peace. The buyer feels like they gave the seller everything the seller wanted and more including over asking price… so the buyer feels that they are ENTITLED to get everything they want fixed on the inspection objection.
The seller looks at the inspection objection and says, “I am not going to fix any of this… if they don’t want the house, tell them to terminate; there are five other people waiting in line.” In some cases, the seller is right, and many times that seller is holding a back up offer. This seller feels EMBOLDENED! In some cases the buyer terminates, and the seller doesn’t get that other offer right away, and even if he does those inspection items don’t go away.
Thus, I have described the pinnacle of where we are at in many deals in the Denver market. The real estate agent is in the middle, trying to play nice with all parties, trying to impart the meaning of compromise, but more importantly trying to save a deal.
I think the buyers forgot about 2008, ‘09, ‘10, and ‘11 when they had all the leverage and beat up sellers. I can assure you that the sellers did not forget those years. In closing, it’s not good when it’s a full-blown buyer’s market or a full-blown seller’s market. It’s good for everyone when it’s a balanced market. Until that time, it might be good to remember how the other party feels in the transaction because someday you may be on wrong side of that real estate market.
Dan Polimino is a Broker/Owner with the Colorado Dream House Team, Keller Williams Realty DTC. Contact the Colorado Dream House Team at 720-446-6325, Follow us on Twitter, Like us on Facebook, Watch us on YouTube, Questions?
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