Right now I am working with a bevy of buyers. I have ten of them actively looking.
None of them are writing.
They might want to start. Not because it's testing my patience. But their negotiating strength is about to lessen.
Whether I'm working with buyers or sellers, as an agent, I have the responsibility to put my customer in the best negotiating position possible.
What I do with sellers obviously helps: pre-listing home inspection, receipts for the repairs, home warranty, professional staging, professional photography and web-optimization. No one else does all that as "standard." Buyers have few reasons to walk away after I've put the same property through my pricing regime.
For buyers, it is laying out and executing a planned strategy with logical tactics.
How do we do that?
1.)
Offer with a full pre-approval. An offer that says: Mr. &
Mrs. Seller, your home must inspect and appraise and we have a closing is much
stronger than one that says “if I get my loan, and if what I told the
lender is true, than we can move forward with inspecting and appraising.”
The full approval and the $1000 in hand do that.
2.) No promissory notes, no reasons to give the seller any doubts. Offer their requested earnest money and have a personal check in hard copy ready to go with the offer and the lender letter staring at them in the face. This old-fashioned technique has never worked better.
3.)
Look when no one else looks. Weekend showings are fraught with
anticipation from sellers. They think every weekend showing will sell their
home. Shoot, as an agent I'm guilty of this. Not so showings that happen when sellers are at work or already not
home. Two, the time of year matters. February is awesome as is early March. Late
March through May: not fun. You and everyone else are looking. Yes, there will
be a more inventory in March. But how much? We don’t know what
rates will be (6% rates reduce your buying power by $17K). But we also know that
there will be more purchasing demand then, as that is relocation season and when
the military brings people into the area. I don't think we'll sell homes to each of the net 11,000 troops we're supposed to gain in Colorado Springs... THIS YEAR. But convince me that won't have a trickle-up impact? Military relocation usually begins in the next 10
days.
4.)
Know the market. Know what’s a good value relative to
other values.
5.)
Be willing to walk away from the deal if it doesn’t all
add up.
Remember, sellers most recent news flash is this: 413 sales in
January. I run the numbers better than anyone in this city (rare statement of
my arrogance speaking out loud). I went back through 1993. I couldn’t
find a single month with that small of a number of transactions. Not one. That
freaks out sellers to be more needy than usual. The Gazette and media are right to pontificate about that bloodbath just as they are right to talk about near 8% unemployment and every other bleak economic statistic.
So it’s a bad time to buy, right?
Couldn’t be further from the truth.
Why?
1.)
There are fewer homes for sale this month than there were last
month. That totally defies conventional wisdom. January is usually the largest percentage inventory build month of the
year when compared to the previous month. For the first time in over a decade, February started with fewer
homes for sale than January. The smallest number of sales in 15 years and...INVENTORY IS GOING DOWN?
2.)
Where is it going? Some went to rent first of the year. They had
no problem getting renters.I tried unsuccessfully to convince seller to rent for six months. They finally did January 2nd. They were rented January 13th. Looked for a rental that's 1998 and newer with 4 bedrooms near Fort Carson? Keep looking.
3.)
Where is it going B? A bunch were purchased. There are 1050
under-contract and pending home sales in the MLS right now. That’s more
than this time last year. People assume investors are buying up the short sales
and bank-owned. They’re not. They’re not in this market at all. If you're looking to buy a home, you're probably in one of these categories: married or divorced in the last 3 years, had or are expecting children in the last 3 years, have a lousy commute, have a new job, are downsizing, have family moving in. Uh... none of those sound like investors. This is not late 2006 when 40% of the market was speculators, er, investors buying homes.
I showed another home today on Butterfield in Wagon Trails. About 1400 finished, 1800+ total, 2001 year of
build, across the street from the elementary school and it had two FULL Baths
up. $169,900 on an approved short-sale (meaning one day turn-around and that
price takes the house). Buyers had paid $220,000 for it three years ago.
It was bombed beyond belief. The
toilets probably had not been cleaned in three months. Not a joke. Gross
carpet, lots of smoke, far from move-in.
I was one of 6 scheduled
showings between today and tomorrow. There were two agents waiting outside to
show it when I was done. Both of them had families.
Here is my point:
If you can afford this price
range now, it is not likely going to get more affordable. It seems that every ten days the market disappears in $5000 increments. Right now, I think my listing at 1519 Happiness is close to next in line, because it now has scant competition under $150,000 in EAS.
The liquidation of
properties is happening now.
The rates are on sale.
The demand is strictly
local.
If you're qualified to $200,000 on today's rates...
Change one of those things:
and you’re almost certainly out of luck.
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