It's a Tough Market for Buyers

By
Real Estate Agent with Best Connections Realty, Inc. 3087750

IT'S A TOUGH MARKET FOR BUYERS

It's a tough market for buyers these days.  The real estate market over the past 18 months has certainly been crazy, but the past 6 months have been especially tough on buyers.   With virtually no inventory and too many buyers for each home that comes up, it has gotten hairy and downright ugly at times.

tough market for buyers 2022

 

DON'T GIVE UP

if you're a buyer looking for a home, don't give up.  There are always homes coming on the market - slowly, these days, I know - but they do come up.  And when they come up, you want to be ready. Let me rephrase that.  You must be ready, or you lose out.

Your agent will guide you as to what you need in this regard.

BE PREPARED

Be prepared to move and move fast.  Do your part.  If you're a cash buyer, have proof of funds.  If you're planning on financing your purchase, get yourself preapproved now.  If your preapproval is old, get it updated.  

Work with a buyer's agent.  Don't calling the listing agent!  They love when you call them.  Why not?  They collect a double commission,  But remember this - the listing agent has a contract with the seller to get them the highest price.  The listing agent is working for the seller.  They are NOT working for you.  Sure they'll handle the paperwork in many states (laws vary on this by state), but they're working for the seller.  Does that make sense?  Many people aren't aware of this.

WAIVING CONTINGENCIES

Work with a good buyer's agent who will explain the ins and outs of presenting a good offer in today's market.  Many buyers are just waiving some or all contingencies in their contracts to get the house.   That can be very risky.  If you're going to waive all contingencies, make sure you understand what you're doing first.

When it comes to inspection, it's not such a great idea.  You never know what you will find, unless you happen to be a contractor.  The house could have major problems that won't be discovered until later on.  Try shortening the inspection period to as short as you can make it, but, in my opinion, this is one contingency I wouldn't waive.

If you want to waive the appraisal contingency and you have extra cash, that's fine.  For example, if you buy a house for $ 625,000 but it appraises for $ 590,000. then you would need to come up with an extra $ 35,000 to satisfy the lender.   Waiving this contingency is okay as long as you have the extra cash.

Waiving the mortgage, assuming you're taking one, is risky unless you have the cash to back you up.  In other words, if you are buying a home for $ 750,000 and wrote the contract up as cash but then decide to take a mortgage (which is fine), that's okay as long as you have the cash to close in case the mortgage doesn't go through.  

OTHER CONSIDERATIONS

Your buyer's agent should speak with seller's agent to find out what the sellers are looking for, when they are looking to move, etc.  This will help when you prepare your offer.  Sellers may need an extended closing or a lease back or something else.  

Will the timing work for you?  Can you make it work?  Sellers ask for all sorts of things these days.  Some buyers are accommodating, some not.  If you want the house, it's best to be as accommodating to the seller's wishes as possible.

IN SUMMARY

Will these tips always work?  Sometimes yes, sometimes no.  Personally, I have found this to be a very unprofessional as well as crazy market.  You can do as much as you can do.  Sometimes it is out of our hands.   There is an old expression, If it's meant to be, it will be.  I believe that.  

I know it's been frustrating for many buyers.  Believe me, I feel your frustration.  It's frustrating for the agents as well.   

But if you need a home or a condo or a villa or a townhouse and it's time to buy, then go for it.  Give it a try.  Because in the end, life waits for no one.

 

 

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Comments (16)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Elyse Berman, PA several of my borrowers have lost out on homes they have offered well over the asking price.  This is the strongest Sellers Market I have lived through.

May 17, 2022 02:23 PM
Elyse Berman, PA

George Souto I had a cash buyer offer well over asking and lose out because someone walked in and waived the inspection.  Personally, I think this is a really bad idea.  If something happens down the road, you know where this is headed.  

May 30, 2022 04:00 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Elyse, it finally is getting a TAD better here in Denver, as our inventory has doubled.  (2,000 to 4,000)  Still not enough though.

May 17, 2022 05:33 PM
Elyse Berman, PA

Would you please send us some inventory Joan?  We could sure use it!


I'm glad it's doubled for you.

May 30, 2022 04:01 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Elyse... interesting that you said you've found this market to be unprofessional... I had that conversation with two clients just the other day. For different reasons they were asking me if the lack of communication we were seeing was the norm.

May 18, 2022 05:17 AM
Elyse Berman, PA

Good evening Nina,  I think it's more than a lack of communication - at least from what I've seen.  I'm taking the high road here and leaving it at unprofessional, but let's just say very unprofessional. 

May 30, 2022 04:03 PM
Kathy Streib
Cypress, TX
Retired Home Stager/Redesign

Hi Elyse- well said. This is a crazy market and the tips you offered are solid ones. While nothing is guaranteed, they are helpful information for the buyer. 

May 18, 2022 11:14 AM
Elyse Berman, PA

Thanks Kathy.  The market is crazy here.  I should send you some more articles!

May 30, 2022 04:03 PM
Kathy Streib
Cypress, TX
Retired Home Stager/Redesign

May 21, 2022 06:41 PM
Elyse Berman, PA

Thank you!!!😀

May 30, 2022 04:04 PM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Elyse. You must be patient in your ability to act quickly! Sounds goofy but it is correct. And in the end, if it is meant to be it is meant to be. Enjoy your day.

May 22, 2022 05:06 AM
Elyse Berman, PA

Good evening Wayne,  You are absolutely correct.  I had one agent tell me I needed to have an offer in in 20 minutes.  The buyer said, I can't pick tomatoes in 20 minutes!  I'm with you, if it's meant to be, it will be.  Have a good week.

May 30, 2022 04:05 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Elysie - in New York my daughter has several friends that moved back from NYC and lost one bid after another.  They are now living with parents.  This is a new reason why Millennials are living with parents although it is temporary.

May 22, 2022 05:47 AM
Elyse Berman, PA

Hi Grant,  I believe it.  It's really crazy, like nothing we've ever seen.  I don't mind the craziness so much as I mind the unprofessionalism I see pretty much on a daily basis.  


Your daughter's friends will find places to live in time.  It has begun to slow a big here.


 

May 30, 2022 04:07 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Ese,

Love your post, so well written and informative. I have to admit its the strongest sellers market I've seen in the 31 years I've been in real estate! Its tough for buyers and their buyer agents! I'm so glad Kathy Streib featured your post in her "Ah-ha" moments for the week!

May 22, 2022 07:53 AM
Elyse Berman, PA

Good evening Dorie Dillard Austin TX ,


Thank you!  It's the strongest seller's market I've seen in 28 years I've been in south Florida.  It is tough - I don't mind that as much as I mind the unprofessionalism I see pretty much on a daily basis.  That bothers me more.  


I'm late in answering the comments and was stunned to see Kathy featured me!

May 30, 2022 04:10 PM
Mike Cooper, Broker VA,WV, MD
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Excellent advice, Elyse. This is a brutal buyer's market. I feel bad for the first-timers, but the ones I've worked with get smart and savvy pretty quick. Of course, that's always after a few false starts. 🤣

May 22, 2022 08:12 AM
Elyse Berman, PA

Thanks Mike Cooper, Broker VA,WV, MD Agreed.  It is brutal for first timers and even for other buyers.  Hopefully it will get better soon.  We are starting to see a slowdown with some price drops.  I'm not getting my hopes up too fast though.

May 30, 2022 04:12 PM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Elyse Berman, PA  great points sellers do have the upper hand but buyer beware does apply here doesn't it?  Like you say and like I tell buyers if you lose the house and you did your best it just wasn't meant to be. Be patient and another house is screaming wait for me!

so glad Kathy Streib featured this  

May 22, 2022 08:15 AM
Elyse Berman, PA

Hannah Williams I'm not an attorney so I don't know if buyer beware applies, but as a retired court reporter, I don't want to find out.  If something major goes wrong down the road.  I'm with you, if it's meant to be, it will be.


I'm late in answering these and had no idea Kathy Streib featured it!!!

May 30, 2022 04:16 PM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

The numbers do not look as bad as interest rate increase.  Mortgage for $1.5M borrowing is at $8800 at 5.8% and was 6736 at 3.5%.   The difference is at 3.5% interest rate the houses were a lot more affordable often 30% less.  Who told the buyers to wait so long?    

May 22, 2022 08:32 AM
Elyse Berman, PA

Many didn't wait Sam.  They were even cash buyers who tried and tried and failed to buy a house.

May 30, 2022 04:17 PM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Elyse,
A great summary of how to work the crazy market. I so agree about NOT waiving the inspection contingency. That protects BOTH parties from future grief.

May 22, 2022 11:05 AM
Anna Banana Kruchten CRS, Phoenix Broker

Exactly my thoughts on inspections Carol Williams !

May 22, 2022 11:56 AM
Elyse Berman, PA

Thank you Carol Williams and Anna Banana Kruchten CRS, Phoenix Broker .  I had this discussion with someone recently.  Maybe it was because I was a court reporter and only saw the worst when it came down the pike, but as Carol says, "protects both parties from future grief."

May 30, 2022 04:19 PM
Anna Banana Kruchten CRS, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

Hi Elyse this is a really good post!  You're spot on!  As a listing agent I actually don't want buyers calls and let them know it's best to get their own represenation (albeit it is lawful here in AZ if disclosed as a dual agent up front).  I work for the seller and want to represent their best interests only.  My choice.  I also recommend inspections and  quite frankly our home owners have already had an inspection before going to market so we know if there 'were'' issues and got them handled if necessary.  Waiving inspections is fraught with potential legal conflicts for both parties - especially in a crazy hot market.

May 22, 2022 11:55 AM
Elyse Berman, PA

Exactly Anna Banana Kruchten CRS, Phoenix Broker .  We don't have dual agency in Florida.  We work as transaction brokers but can handle both sides with limited confidentiality.  I prefer not to do this.  I've written about exactly what you said - seller's agent works for the seller.  Builder's agent works for the builder - not you, the buyer.  But people think they will get a deal or I don't know what.  I've lost deals because of not waiving an inspection.  You know what - it's okay.  I'd rather offer a short inspection period than waive it.  Like you, I think it's crazy and dangerous.

May 30, 2022 04:23 PM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

This market is tough for buyers and those that are serious need to be working with a qualified real estate agent if they want to get a home. Very well written post

May 22, 2022 06:41 PM
Elyse Berman, PA

Thank you Ed Silva .  That's the truth.  But many are really burned out from the past 6-8 months.  

May 30, 2022 03:49 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Elyse:

It certainly is a challenging market for buyers, and all the more reason to work with a well-qualified buyer's agent who knows and understands the market conditions and how they impact buyers, and sellers. You've certainly covered all the key issues to be concerned about.

Jeff

May 22, 2022 08:44 PM
Elyse Berman, PA

Thanks Jeff Dowler, CRS .  It helps, but don't you just love it when they say, oh, my friend's mother's son has his license...you know where this is going.

May 30, 2022 04:24 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Sometimes we have to be up for the challenge and just let it be what it is and do are best

May 23, 2022 08:32 PM
Elyse Berman, PA

Well said Laura Cerrano .  You did a great job summing it up!

May 30, 2022 04:25 PM