7 Things Buyers Need to Know Now That it’s Not a Seller’s Market Anymore
Now that the market is shifting to be more balanced, a weird psychological phenomenon will occur. Indecisiveness. You’re so burned as a buyer in this market from having only 4 seconds to decide on the biggest purchase of your lifetime that now you’ll be stuck, waiting for the catch. Is there one? What should you look out for? Also, stick around until the end of this one because I’m going to share the one thing buyers do that destroys their opportunity to get into the best house for them.
There are going to be so many choices now in some neighborhoods that if you’re buying a home you’re going to go through several steps, much like a grief process. As you come to grips with the fact that you no longer have to drop your toothbrush and run out the door in your pajamas to see a house that just got listed, so you can do a home inspection before writing up an offer where you give the seller an extra $200,000 and pay for their kids daycare, all for the pleasure of dealing with their decades of deferred maintenance and that family of raccoons living in the attic. This is the end-of-the-seller’s-market-buyer-grief-process.
- First, you will think something is wrong with the house.
- Then, you’ll realize you can actually have your choice and be able to breathe before making a decision, so you’ll want to sleep on it.
- Third, you will want to go back and take a second look.
- Fourth, another house will come on the market and you’ll want to see that one to compare it to the one you like.
- Fifth, you’ll wake up one day and realize you have a dozen choices and you’re suddenly worse at making a decision than those idiots on House Hunters.
Touring homes takes time. What’s a good strategy/mantra when it comes to deciding which homes to tour/see in person?
Let’s get back to basics.
- Definitely cast a wide net, but remember that Real Estate is all about location. Now that you can be pickier, focus on locations that work best for you and that are also desirable to others in the event you do have to sell. When buyers pick homes in 4 or 5 different towns, their search becomes unmanageable. You may not need to have your top choice and several backup locations. Think of it like applying to colleges. If less people are going, do you really need an army of safety schools?
- Before touring the inside of any home, scope out the neighborhoods in person and make sure that you would be happy there. You can find homes in any area that serve your needs, it’s the neighbors, the schools and the amenities that vary.
- Narrow down to two of the best locations for both your lifestyle and price point. I think having two locations is ideal, because it allows you to weigh different homes and really narrow down what’s important to you. Is the house that’s a 10 out of 10 in your 2nd choice neighborhood going to cut it or is being in your top choice neighborhood worth a compromise on house type.
- Make a list of must-have and nice-to-have features and eliminate anything that doesn’t include all your must-haves. You don’t need to negotiate against your own wishes anymore. I recently asked buyer clients what this house was on a scale of 1-10. I do this with all my clients but when they both said 9.5, I was like, “Let’s go write up the offer.” I’ve not heard anything above an 8.5 in the past several years.
- Look closely at the photos. Photos often look better than real life, so zoom in and look closely at details. Are those gorgeous new cabinets or can you see a sloppy paint job on old damaged cabinets when you zoom in? I always thought I was pretty good at looking at photos, but I’ve had clients who even blow my attention to detail away. They see things in corners and shadows that could be water damage that they walk right up to in person to investigate. I’m always impressed by their diligence. This is the best way to maximize your time because you completed the research prior to hitting the pavement.
- Strongly consider homes that need work. This is where some real value is going to show up. There are sellers who realize they missed the boat, and they still need to sell. They are going to be hesitant to make any updates for fear of either not getting an offer in the new market or because they still don’t believe it’s no longer a seller’s market. Don’t overlook these homes!
- Don’t be afraid to offer a list price on the first day a home is listed and ask for terms that are favorable to you. Even in DC which has been on fire for close to 2 decades, we’re seeing offers with home inspections and other contingencies getting through because sellers are worried. And if their agent has counseled them properly, they’ve been told that one good offer is worth working with instead of hoping for multiples and escalations. And if their agent hasn’t counseled them on that, then maybe your offer will do just that.
Finally, a bonus tip. I see this all the time, especially in times of market change and insecurity. Make sure you stay out of your own way. Don’t tell yourself the market is going to crash or prices will go down and convince yourself that you need to wait. Second guessing and trying to game and forecast the market will only result in more time lost. People always end up saying they should have bought x number of years ago. Get yourself into your dream house and start enjoying it.