Buyers must be ready to act fast when they find right house
We have friends who lived in the neighborhood for more than a decade then moved away to take jobs overseas. Now, they are planning to return and asked that we keep our eyes and ears open “for something we might like.”
They obviously take for granted that we know the style and size of a home they would consider buying. That often can be a dangerous assumption but it also sparked more than a cursory interest in weekend open house signs.
(“Oh, it’s THAT house. Needs a roof. Wasn’t it on the market two years ago?”)
Last Sunday, I noticed a sign while returning from my weekly radio show. The house was in a very desirable area with a super view, interesting driveway and near the end of a dead-end street. I went home, checked the Internet and told my wife about the house I’d viewed from the street.
“There’s no reason to go down there if it’s too small,” she said. “And, they are not going to like something that’s really chopped up.”
“I can’t find it online,’’ I said. “Let’s just pop on down there and check it out.’’
The home was sited at the east end of a dynamite lot, on a hill overlooking a greenbelt. The long driveway skirted a neighbor’s house before ending at a two-car garage. The area could serve as an adequate play area for kids. It was not far from the back door and a safe distance from the street.
The three-hour open house was about 15 minutes from being closed. About four seemingly interested persons were still perusing the two-story wood home whose style now is known in the realty vernacular as “Craftsman.”
We thought the house probably was not ideal for our friends, but the lot was definitely one of the better ones in the neighborhood. We could see how the place could easily work its way into a lot of buyers’ dreams. It was priced right and the persons going through the home were already talking about remodeling interest rates and lenders.
“Bet you had a couple of offers on this one,” I said.
“It was officially listed Wednesday and we had an offer Thursday,” the agent said. “We had so much interest just in our office before the home even hit the computer. We now have that offer and at least two back-up offers, probably four.”
This situation – now common in many Puget Sound neighborhoods – sometimes brings up several questions for buyers and sellers.
• Should the seller have asked more for the house?
• Are too many buyers now chasing too few homes?
• Would prospective buyers be well-advised to wait until things cool off?
Just because the seller gets the asking price doesn’t mean the price is too low. On the contrary, the seller and agent usually have found the fair-market value and the public is responding accordingly. If you don’t like the selling price, raise it but be prepared to wait longer to sell. A good deal has to be good for all parties involved, not just the seller. It is not a time for greed to set in, although human nature always tweaks the sellers with “What if?”
If the sellers balk at closing the deal, they might be stricken with a case of “seller’s remorse.” (Buyers are sometimes hit with “buyer’s remorse” – paid too much for the house, don’t want to move, etc.)
There are two common cures to seller’s remorse. One is to have the realty agent go over the advantages of the sale with the seller. The agent should be prepared with evidence of recent neighborhood sales prices of comparable homes.
The other remedy is the thought of paying the agents a commission for providing a buyer “ready, willing and able” to purchase the property. If the seller can’t be persuaded to complete the sale and if the earnest-money agreement is well-written with no loopholes, the seller is technically on the hook for the commission.
Buyers are increasingly sophisticated in their selection process. The people who have done their housing homework are willing to compete for homes that are well-located and in decent shape. While for-sale inventories will gradually climb, serious buyers shouldn’t wait until things cool off. If you know the type of house you want, continue to look and be prepared to sign if the deal is right.
You might be able to do your friends’ research, but you can’t reduce the competition.